Innovation Impact: How Southern Company Turned An Employee Idea Challenge Into An Innovation Center

Southern Company Innovation Center

For Southern Company, innovation wasn’t a choice — the umbrella company of more than a dozen electric and natural gas utilities and energy businesses, the energy giant realized that the future of how consumers consume energy is changing, sooner rather than later. Rather than taking a “wait-and-see” approach or bringing in outside consultants less familiar with the industry, the company turned to its own experts — its employees.

In 2014, Southern Company CEO Tom Fanning announced the SO Prize, a company-wide competition that called for innovative ideas to improve the business and prepare them to be competitive in the 2020 decade. Fanning asked employees to, “look around the corners of the future.”

“In an industry that hasn’t changed a lot in 100 years, but now is changing a lot — driven by customers expectations, by technology enhancements — all of those things are driving us to evolve,” says Julie Pigott, who helped run the SO Prize competition. 

Pigott says they expected to receive a few hundred ideas and for about 10 percent of employees to even engage in the competition — reading the ideas, voting, etc. Instead, almost 1,000 ideas poured in, with 40 percent of Southern Company employees across all divisions participating in the process.

The team selected about 300 of the ideas to evaluate. Following reviews, employee voting and evaluation by judges, six were chosen as winners. The teams won a cash prize, but more importantly, the opportunity to move their project forward towards commercialization.

Then, however, things got a little more complicated. While three of the SO Prize winning ideas had what Pigott calls “a natural home to be incubated within the company,” three of them did not.

Southern Company executives had already been toying with the idea of establishing an offsite center to help with commercialization of next-gen projects — one step ahead of the company’s internal R&D team but looking at things at a higher level than a team within a subsidiary company. The SO Prize provided an additional impetus, and in 2015 Southern Company took the next step and opened one of the first corporate innovation centers in Midtown Atlanta’s Tech Square.

Pigott, who now serves as Director of Innovation Support at the Energy Innovation Center, helped establish its three areas of focus: empowering a culture of innovation, helping evolve new business models and helping to develop new products and services.

The SO Prize ideas fall under all three of those categories. Since 2014, the winning ideas that went into the Innovation Center have turned into an online marketplace for customers to buy and receive rebates on energy-efficient products, an education platform for educating customers  about electric resources and a new rate structure where customers can see simplified pricing, similar to a cell phone bill, to understand how they’re consuming energy.

“This isn’t rocket science for a lot of industries, but this is pretty new for us,” says Pigott. 

Michael Britt, Vice President of the Energy Innovation Center, echoes the importance of the Center in getting ideas of the ground and putting them to work.

“Innovation isn’t innovation until an idea turns into a solution for a customer,” Britt says. “Until we’ve made a customer’s life better, until we’ve made a process more effective, more efficient, somehow made our delivery of our products better, we haven’t innovated.”

“Innovation is activating ideas,” he says.

That’s why the Center works so closely with that R&D group, explains Britt, often receiving projects in their earliest stages and doing the work to connect with partners, identify a team or finding the budget to make sure it happens. Though the Center isn’t large — with less than a dozen full-time employees, plus interns and entrepreneurs-in-residence — their ability to move quickly and see how a project will have to transition to get from start to finish is their strength.

“And then over time, you’ll see our role ramp down and the role of our operating companies ramping up,” says Britt.

One example of this process in action is a Smart Neighborhood project recently unveiled in Alabama and soon to break ground in Georgia. The idea was another that came out of SO Prize — though not selected as a winner, it received attention internally and has now come to fruition. 

In a collaborative process between R&D, the Innovation Center, Georgia and Alabama Power and other external partners, 62 single-family homes in Birmingham and an unannounced number of townhouses in Atlanta have gone into development. The homes use alternative energy sources like solar and battery and incorporate smart home appliances.

“We’ve got to make decisions about energy consumption 20 or 30 years out with the limited data that we have right now,” explains Pigott. “So constructing this neighborhood of the future, using as much energy-efficient materials as possible, installing energy-efficient devices, smart home technology, things that might not be super prevalent now but we think the penetration will increase, this allows us to make smarter decisions.” 

In these types of projects, the Center not only connects the dots, but speeds the process, says Britt.

“We would have built the neighborhood of the future, no doubt. But the role we play, accelerating it, making it happen on the builder’s schedule, helped the sell these homes more quickly than any homes they’ve ever built,” he says.

In addition to projects that affect the products, services and business of Southern Company, Pigott also focuses a lot of her time on the employee education portion of the Center’s mission. Teaching employees to be more innovative in their day-to-day roles has a huge effect for the overall company, she says.

“We’re helping them understand that innovation doesn’t necessarily need to be coming up with the next company changing idea. If you can improve your processes and work, that can be of great benefit to the company overall,” says Pigott. They do that through an internal education website and workshops that tech design thinking and agile processes.

“Because of our scale, everyone working incrementally better every day makes such a difference,” says Britt.

Photos provided by Southern Company