1:28 Introduction
So my name is Matthew Griffin. I'm the founder of the 311 Institute, a global futures and deep futures think tank, working up to 50 years out. We're all finding the world that we live in today confusing enough, let alone the future. I don't think that I've met a leadership team on any continent in any sector that really thinks that they've actually got it nailed, that they know what they're doing and how to do it and how to execute it. So in this particular presentation, what I want to do is I want to take you through a variety of different topics.
So I've got these kind of six chapters that I've put out for you.
2:59 The future of energy
So I've got a brief introduction. We're going to have a look at the future of energy. Now the reason we're going to have a little bit of a look at the future of energy is because I think I see some things that you might not necessarily have seen yourselves or appreciate. But that's appreciate basically in the diplomatic way in terms of some of the changes that we actually see the AI dilemma because let's face it basically when we actually have a look at the number of new AI data centres going on being built around the United States just in Utah alone there's 15 gigawatts of new data centres going up and when we have a look at Virginia and so on and so forth basically we see that pattern as well and I think when we actually have a look at the future of artificial intelligence and energy consumption I don't think it's as straightforward as some of the large foundational companies are actually making out. Bearing in mind that it's not straightforward at all.
Anyway, I'm going to simplify the world. So, how do we actually de-noise the world? How do we figure out what the north stars are? VUCA leadership. And then a quick summary. So in the 1970s, the United States coined this phrase VUCA, which stood for volatile, uncertain, increasingly chaotic, but complex and ambiguous. Now though we have this sort of max acronym that we've added to it because increasingly the changes that we are seeing are massive. They are system level. They are global in nature. If you have a look at the tug-of-war between the United States and China from a geopolitical perspective, that's global.
When we have a look at how the economy globally is starting to actually split into two, that's another macro change. When we have a look at the environment, that's global. When we have a look at the changes in societal behaviours, that's happening at a global level as well. And when we have a look at technology, increasingly the vast majority of continental blocks and countries are all in a race with one another to dominate the future of technology.
So a lot of the changes that we are seeing are global and this affects you whether you see it or not and I'll talk through some of those. It's also accelerating. Now, even though we saw generative artificial intelligence emerging in 2016, in 2022 from a leadership perspective, 99.9% of leaders hadn't seen it. So, they weren't prepared for it. And increasingly, when we think about the pace of change, we can disrupt a global industry now much faster than we ever could.
And then change is also exponential because on the one hand we're now trying to deal with exponential technologies like artificial intelligence where we see the amount of compute power the amount of global compute power being used for AI is doubling every 3 months but also exponential disruption and you'll see that within your own businesses and utilities. There's nothing simple about any part of what you do any longer.
It was already difficult but now it's even more difficult, complex and confusing and everything else. So I work with leadership teams around the world and I would suggest that the vast majority of you only see 30% of the future which means basically if you're missing 70% of what's happening whether that's regionally whether that's nationally or whether that's globally you can't plan for it which means you have strategic drift. So consider this.
We live in very very complex and confusing times. But if you could all predict the future with 100% accuracy, would it be confusing? Would your plans be wrong? So ultimately what we're trying to do is we're trying to understand what the future looks like when all of the variables are infinite. And then we're trying to figure out if this happens, what do we do? If this happens, what do we do? If this happens, what do we do? And if all these things happen, what's the other thing that we have to do?
7:28 Strategic energy challenges
Now, the president in his first term went on the record and then he reiterated this when he came back into office. He said cheap energy is a strategic advantage. This is partly basically where the drill baby drill sort of mantra came from and the opening up of the shale fields and so on and so forth. Now 193 countries in the world rely on other countries for their energy. So 193 countries import their primary energy from other countries.
And so let's face it, it's not as simple as cheap energy is a strategic advantage. You all know this. That energy basically has to be reliable. It has to be there when you want it, when you need it. It's got to be secure. So when we think about critical national infrastructure, when we think about cyber and so on and so forth, it's got to be secure. And it's also ideally got to be sovereign because in an increasingly fragmented world, the people that you thought you might be able to rely on or the countries that you thought you might be able to rely on might not be as reliable as they used to be.
And so this is ultimately what we are trying to build. We are looking at how do we actually ensure that we have cheap, reliable, secure and then ideally sovereign energy and that's a different strategy. Now what we've sort of found through the ages is for every 10% increase in the base cost of energy yeah from wherever it comes from we've seen a 0.15% decrease in GDP. So if we think about for example the increasing oil prices that we see at the moment that's going to have a drag on US GDP.
So expensive energy destroys growth. Now when we think about the current conflict in Iran with whipsawing oil prices we've seen the cost of jet fuel increase by 105%. And so Delta, that's now added an extra $2 billion to their fuel bills, which means that we see an increase in inflation sort of coming through. And Spirit Airlines recently went under because the cost of energy just broke their back.
Now, from a VUCA perspective, you are living in probably one of the most sort of VUCA sectors that I cover. From a volatile perspective, you're having to ultimately try to deal with extreme weather events, fuel price spikes basically in LNG or oil or wherever it happens to be you get your energy from, supply chain shocks. When we think about uncertainty, you're trying to grapple with new consumer shifts, policy whipsaws, you know, under one government, basically it's renewables all the way.
Under another government, it's a different direction and you're sort of caught in the middle. And then when we think about uncertainty, there are new technology breakthroughs and those can come through very quickly. But then we don't necessarily understand how fast some of these technologies can mature. And in fact, just because we have a new technology on the board doesn't necessarily mean that it's ever going to come to maturity. But you still have to think about putting it into your plans and your strategy. When we think about complexity, increasingly cyber security is going to be a mess. And I'll cover that.
When you think about all of the different generations of assets that you actually have within your businesses, you have some assets that even today basically are probably 50 years old and you're sort of trying to bring online new assets and you're trying to get all these to work with one another in an increasingly complex system. We have grid decentralisation and DER and in fact basically from a utility perspective when you have a look at things like grid decentralisation this also starts getting us to question what is a utility anyway is my house or my community a utility because I can run a virtual power plant is a company like Hyundai a utility which I'll come to and then when we think about ambiguous.
You're also trying to deal but with an ambiguous future because on the one hand you've got a lot of artificial intelligence companies and investors saying we're going to build a new AI factory in Virginia or wherever it happens to be and we want grid connectivity. Then you say well when do you want grid connectivity and they go now. You go. And so the speed of all of this is actually accelerating as well. You don't have 15 years to plan basically for future connectivity or future generation. Increasingly you've got a very large industry that is wanting everything now and just trying to stand up a 300 megawatt grid connection basically is quite difficult. We've got ESG whipsaws one minute, when we have a look at the EPA basically you've got to do certain reporting then the next minute you haven't. And then when we think about load growth So load growth is challenging. When we think about new energy retailers, Tesla is an energy broker and energy retailer in Europe. BYD is an energy retailer and an energy broker. So you've also got new, should we say, partners coming into the mix.
Yeah. When we think about electric vehicles over time, we think that electric vehicles and [grid-tied] storage could actually account for up to 30% of all new grid-scale storage. And so do we need to buy as many lithium ion packs basically as we think we need? And then Tesla in California is also a virtual power plant company. British Petroleum in New York is a virtual power plant company.
14:24 Innovations in energy
And we haven't even started yet. Now when we think about the future of energy itself, this is kind of a dilemma that we actually have because when we have a look at the fundamental unit economics basically of generating for example a megawatt it's changing significantly. Now if we go back a hundred years the average sort of energy density of diesel for example is about 45 to 55 megajoules per kilogram.
The energy density of fossil fuels has changed by 3% in 100 years. Meanwhile, the energy efficiency of generating electricity from solar in the past 20 years has improved by 40,000%. When we think about the generation we can get from wind and wind turbines in the past 20 years, that has improved by 1,000%. When we think about batteries, so things like lithium-ion batteries, we can 3D print a lithium-ion battery. We've got sulphur air batteries. We've got all sorts of different battery technologies coming through. But the capacities, the energy density in a lithium ion battery is improved by about 700%. And then when we think about things like biofuels, especially things like sustainable aviation fuels, we have new genetic engineering technology, which means that we are very close to seeing sustainable aviation fuels as well as other biofuels being more energy dense than traditional fossil fuels. And we haven't started yet.
16:13 Emerging energy technologies
Now from a grid perspective increasingly you're sort of being thrown lots of different technologies fusion you know when we have a look at fusion Google just bought 200 megawatts of fusion basically from Commonwealth Fusion I don't really expect the first fusion reactors to be going online until 2040 you know the Chinese basically with their EAST fusion reactor managed to sustain fusion for 16 minutes But we are still decades away from putting a fusion reactor into the grid.
16:49 Geothermal potential
When we think about geothermal, increasingly we're able to drill hydrothermal wells 10 times faster, 10 times cheaper. So when we have a look at geothermal, geothermal is an increasingly interesting sort of energy generation technology.
17:19 Hydrogen advancements
When we think about hydrogen, we've been using artificial intelligence to produce single-step catalysts. So when we think about the cost difference between grey hydrogen, blue hydrogen or green hydrogen, the cost of green hydrogen is now coming down, especially in the Middle East.
17:38 Nuclear and solar evolution
When we think about nuclear, yes, we've got mini SMRs and we've got new travelling wave reactors. In China, basically, we've got new thorium reactors basically in the desert. So, thorium reactors don't need water for cooling. But in Europe, we've been developing floating nuclear reactors. We put a nuclear reactor on a ship. And on the one hand, it seems a little bit strange, but on the other hand, it makes perfect sense because you can just plug in a nuclear ship at a port. You don't need planning permission like we see basically for traditional nuclear reactors. Bear in mind when we have a look at nuclear reactors in the US today, that's typically a 10-year planning cycle.
When we think about oceanic, we're able to pull hydrocarbons out of seawater and we can produce green diesel which replaces things like bunker fuel. In Japan, we've got osmotic plants. So these just use the pressurisation under sea to extract energy in Japan. Again, Japan basically are using deep sea tidal. Now a deep sea tidal sort of system literally sits on the seabed and the Japanese think that they can produce 200 gigawatts of energy from the seabed except for the problem that these things are rusting and so they're trying to sort out basically with companies like Hitachi and Mitsubishi they're trying to sort out the reliability when we think about solar you know how many of you have sort of heard the reason why renewables don't work is because the wind stops.
The wind doesn't stop if you're in the deep sea and the sun goes in. Well, today's silicon solar panels are about 20% energy efficient. A perovskite solar panel is 32% energy efficient. If you put bacteria, synthetic bacteria into a solar panel, they're 48% energy efficient. If you use carbon nanotubes to extract heat from a solar panel, it's 80% efficient. So now we kind of have solar is an interesting technology. It's an exponential technology. If you put graphene on a solar panel, it generates electricity from rain and snow.
We've got solar panels that have been developed by Stanford University that generate electricity at night from moonlight and ambient light.
20:25 Future energy generation
So when we actually have a look at solar, when we have a look at how we stack solar cells and everything else, when we have a look at how we actually develop solar based materials, solar at the moment in China is generating electricity at about $20 per megawatt hour. Ultimately using a variety of different technologies like nanophotonic technologies which capture all the smallest wavelengths of light. We think we can see a time where solar the cost of generating electricity from solar almost hits zero.
You've still got to transmit it. You've got all those costs there. But from a generation perspective, solar is only just starting to take off in terms of what it can do.
21:11 Space-based solar energy
And then basically we've got guys like Elon Musk and we've got different governments around the world that are trying to sort of put solar panels and everything else and solar power plants in space. And we're actually at the moment basically trying to figure out how you build a multi-kilometre 6 gigawatt array in space. And this is sort of where when we have a look at SpaceX's IPO this year, there's a lot that's getting hinged to this, but this is still a decades' play.
21:38 Wind power advancements
And then when we think about wind, increasingly we're moving into free floating wind turbines in the deep sea nearshore. And the Chinese have just developed a double header wind turbine which is a 50 megawatt monster. And so again, when we think about the cost of generating electricity from wind, it drops. However, when we look at wind turbines at the moment, the general consensus is that globally we can't really push them to be any bigger. The biggest problem we're having with wind turbines, the giant wind turbines that are sort of 70 storeys tall at the moment, is that the blades go hypersonic.
So, wind turbine technologies starting to reach some of the limits of what it can do.
22:24 Energy market transition
And then when we have a look at sort of some of the futures basically in the space, if you take a traditional concrete and you put a technology called carbon nanotubes, which is sort of a type of tiny carbon into concrete, then we think that we can actually turn a 50-storey skyscraper into a 100 megawatt grid-scale storage product because the concrete itself stores energy. So when we have a look at all of these different technologies that are coming through the energy sector from an innovation perspective is the busiest sector on earth. It beats biotech. You are all basically in the most innovative sector on earth by far.
But unlike artificial intelligence where we are focusing all of our efforts on a couple of things, couple of new training methodologies in the energy space it is very very broad. Now last year we invested $3.3 trillion globally in energy, energy infrastructure and so on and so forth. $2.2 trillion of that was in renewables and nuclear and grid and then 1.1 trillion of that basically was in oil and gas.
When we have a look at primary energy, so this is global primary energy. 80% of the world's global primary energy comes from oil still. Last year this was 81% so it's dropped down a percent. And 20% comes from nuclear and renewables. So oil is still by far the dominant primary energy source on earth and it's going to take a very long time basically to sort of unseat it.
However, when we have a look at energy generation, electricity generation 57% of the world's electricity is generated by coal, oil and gas and 43% by renewables and nuclear. So about 10% is nuclear now and we're going through a nuclear renaissance. But the change here is 3%. So last year 60% of all of the world's electricity was generated using fossil fuels. Now basically it's 57%. So we're seeing an acceleration globally of a move away basically from fossil fuels basically for electricity generation.
Now last year we also saw a major milestone. We saw 110 gigawatts of grid-scale storage being implemented. We saw 692 gigawatts basically of renewable energy being implemented. 440 of that was in China. But the reason why this is significant is last year we also saw 84 gigawatts of new fossil fuel-based energy generation plants coming online.
25:27 The AI energy paradox
But for the first time ever from a capacity perspective, maybe not what we're generating but from a capacity perspective, last year was the first year where energy generation capacity from renewables hit 50%. So from here on in the world is moving to renewables but we have that mix now to underpin the global energy transition which is a 92 trillion energy transition in the United States we need about 500,000 kilometres of new transmission lines globally we need 80 million kilometres of new transmission lines which means we see problems basically for example with copper And increasingly energy generation is one problem to solve. As you guys know, TSOs basically in transmission that's a whole other problem to solve. And all of this is coming at you pretty much at the same time. And on top of that, when we actually have a look at the availability of things like copper as a commodity, supply chain issues and so on and so forth, national security priorities, it just doesn't make anything easy for you.
Now from an AI perspective, this is where we are with AI. And again, this is kind of giving you an issue. Since the 1990s, companies like Verizon, AT&T, T-Mobile, all those guys have invested about 2.2 trillion building out the US 4G, 5G networks and the broadband networks. 2.2 trillion. From 1956 to 1992, the United States spent $620 billion building the highway system that you know and love.
But within the space of five to seven years, the US alone basically has now committed $2.7 trillion to the buildout of artificial intelligence. And by 2030, we expect this number to be between 6 to 8 trillion. You've never seen so much money going into one sector globally, not just in the US, ever, but you've also never seen it at this speed. But then, do you know the stats on the AIs that you're using?
ChatGPT has a verbal IQ of 155. Google Gemini 2.5 has an IQ of 136. They have 4,000 times more general knowledge than any human. So when you're thinking about embedding artificial intelligence within your operations, increasingly you're embedding a technology that is running at post-PhD levels that you can access for $10. So this is really what the tech bros in California are fighting over. They're trying to achieve artificial general intelligence, which we think will have an IQ of about 1,600 by 2032.
So AI as a technology is incredibly powerful both in terms of helping us create new materials, new energy generation technologies, helping us connect to the grid faster with platforms like Google Tapestry and so on and so forth. But here's the dilemma.
29:07 Simplifying the world
We expect the amount of electricity that the United States needs by 2030 to triple. So in the next four years, we're expecting the amount of power consumption that's deployed for AI to triple. And so when people are coming to you basically with their plans and they're saying we're going to build a 2 gigawatt data centre in Virginia, we're going to build a 5 gigawatt data centre in Utah or wherever we are. They're basing all of those statistics on US AI energy consumption.
So, when we actually have a look at China, China's AI models are much much more energy efficient, significantly more energy efficient. And so, what you have is you've got the cost per AI token, which is the character. So if you type anything into say ChatGPT every single character is the equivalent of what we call an AI token. When you have a look at the amount of energy that we are using to generate one AI token, it has fallen by over 99% in 10 years. So from an energy efficiency perspective, we fast forward to 2013. We just keep it see it doing this.
But as more people use artificial intelligence, even as it gets more energy efficient, energy use increases. If you give an AI a basic prompt, then it's using about 0.3 watt hours. But if you're giving it a complex thing to do, as you can see, an American model, it can be 120 watt hours because AIs when they're doing reasoning, they use a lot more AI tokens. They use a lot more energy.
And so this is kind of the ambiguity. This is the uncertainty that you face. You've got all sorts of investors saying, "We need this kind of data centre to do this kind of thing." And that's going into your plans. But realistically we expect how we train AI basically to actually change because energy consumption is the critical factor at the moment. Energy is scarce as far as AI companies are going.
31:47 VUCA leadership pillars
Now when we have a look at trying to simplify the world I look at something called anchoring constants. So these are the innate behaviours of systems that are always true under almost all circumstances that persist across time. So a very simple example of this is if we go forward a hundred years, do we think we're going to need more energy or less? We'll need more. That's a constant. What the energy is, what the energy mix is, etc., etc. How it's delivered, where it's delivered from, that's challenging.
So when we have a look at economics, the reason basically why a lot of governments do what they do, including the US government, is because we're trying to balance trade. So when you have a look at a lot of the US government's policies and regulations at the moment and behaviours, they're trying to balance trade. How they balance trade, the policies that they put in place, we might not necessarily know that. When we think about price stability, that will be important in the future. When we think about profit and productivity, that will be important in the future as well. When we think about things from a geopolitical perspective, debt sustainability basically is important.
So for example, what is the US government doing to ensure basically that the debt is sustainable and if you want to pay down basically the almost $40 trillion worth of US debt ideally you need high inflation low interest rates GDP growth at the moment basically the US government basically is pushing for 5% GDP growth that's it so GDP growth will be important next year it'll be important in 10 years time so what are the policies that support that national security will be important and we've seen national security becoming especially prevalent in the kind of generation technologies that you can use.
So you have all these different things and then technology. Increasingly you'll be using more technology in the future not less. That technology will not be automated. Increasingly the technologies that you use in grid operations will be autonomous. They'll have their own agency. The cost performance of technology as we've seen will continue to fall. The utility and usefulness of technology will continue to improve. But what AI model you use basically during planning and operations that could change.
And then finally basically when we actually have a look at leadership you're also dealing basically with other challenges as well.
34:38 Adapting to VUCA speeds
So you've got the markets, the external markets that are behaving at one speed. So consumer behaviours can change in days, months or years. And so basically when you're doing your planning and strategising, you're having to think what's going to happen basically to the markets in the future. When you think about governments, governments used to take years to plan things and now they can change on a dime or they can never do stuff or they can reverse things.
So as a leadership team, you are now trying to figure out how do you manage just these two different sets of speeds. But on top of that, with nuclear power stations, one of the biggest questions is if we're building a nuclear power station and it's got a useful life asset of 50 years, what does the cyber security for a power station look like in the year 2075?
So you've got infrastructure which acts from a years or decades perspective. You've got employees where as we see the pace of change accelerating, you see some employees that are saying, "I'm on that. If you want me to do something in a different way, I'm fine with that." And then you've got other employees that just go, "I'm not changing at all." But then from a technology perspective, every time a new artificial intelligence model is released, it is available to 4 and a half billion people on the planet in 69 milliseconds.
So increasingly you are trying to deal with all these different things that are running at different speeds, markets, government, people, infrastructure and then digital technologies. So ultimately what you're now trying to do is you're now trying to figure out how do you change the physical assets of the organisation at the right pace, the people in the organisation at the right pace while also trying to deal with a technology that can literally change your entire operating model, your critical national sort of infrastructure cyber model in seconds.
As the world accelerates, basically 10 years is now five years and five years is now three. So if the world is accelerating, so if we think we're going to be moving faster in the future, not slower, then your five-year plan in reality on the ground is a three-year plan. So you need to get out of this sort of concept of linear thinking. From a strategy perspective, your strategies should now be dynamic. You should be able to update your strategy pretty much every month or every quarter.
You need to learn how to switch gears because your decision cycles for physical infrastructure are going to be much longer than the decision cycles that you make when it comes to technology. So you cannot make a decision when it comes to technology in the same length of time that it takes you to decide, you know, what new infrastructure you're going to be using. So you've got to be able to switch gears.
So you go for one speed when you're thinking about infrastructure, you go for another decision-making speed when you're thinking about digital technologies, employees, and so on so forth. And then you also need to increase decision speeds. So delegate more decisions to the edge of the organisation. And if I said to you where are the decision bottlenecks within your organisations at the moment, I guarantee you all know basically where your decision bottlenecks are.
But they're slowing you down. They're costing you time. They're costing you resource. They're slowing down basically your ability to be agile.
39:37 Data-driven response
You also need to think about how you respond to things. The vast majority of leadership teams that I work with basically they'll be looking at a headline and then they'll be doing a knee-jerk reaction to that headline. So if headlines matter to you then delegate the response to headlines to middle management. Senior leadership teams should be thinking about the long-term strategy. So when something happens, don't just react. You've got to take time and you've got to think about it. You've got to respond. But you've also got to be able to find the facts because in today's fast-paced world, one of the biggest challenges that you all have is actually determining what's true and what isn't true.
So find the facts. This is how we deal with ambiguity. If you want to know how to deal with ambiguity, you find the facts.
40:33 Human judgement in the AI age
Judgement becomes increasingly critical in today's world. So this is kind of that gut feel. Judgement is a distinctly human skill that artificial intelligence cannot mimic. AI can give you the data. It can craft a plan. It can make everything look sensible. But you'll know basically for the utilities that you run, that you operate, the partners that you actually work with whether or not something is right for you.
41:05 Organisational execution
You also need a radical clarity of mission. So what's your purpose? What's your vision? What are your values as an organisation? The reason for this is if you don't have a clear mission, then your strategy is going to be all over the place. But in addition to that, your staff basically will not necessarily know what they're really there to do. So you've got to actually have a proper mission, but you've also got to be able to communicate it effectively. And also don't get distracted.
Yeah, when we have a look at sort of Siemens for example, we saw the president putting new tariffs on Europe on the Friday and on the Monday everyone within Siemens was thinking how does this affect all of our exports. They were always reacting. They were always getting distracted basically by the headlines. And so if you went back to the company a year later and you said, "Right, how much have you progressed the company? What things have you accomplished?" The answer in that scenario would be nothing. Because if you're always distracted by headlines, if you don't know what your purpose or your mission is, then in a year's time, yes, you'll have put out a lot of different fires, but you won't have moved. You won't have moved the utilities ahead. You'll still be where you were, but you're now going to be more stressed. You'll have lost time. You'll have lost momentum.
This is very difficult to do within the sector. Try to simplify everything as much as possible. The reason for this is if you need to make a single change to your systems, whatever those systems are, if everything is complicated and confusing, do you think it's easy to change a complicated and confusing system or do you think it's easier to change a simple system? So think about relentless simplification because again the world is moving faster.
There's a lot of ambiguity. You're being pulled in all sorts of different directions. If everything you do is complex and complicated because of the people, processes, technologies, the systems that you've put in place, your ability to respond is going to take longer. And it's also going to take more people. And it's going to take more time. So simplify everything as much as you can without compromising reliability, security and so on so forth.
There's also Elon Musk is kind of good at this. Exnovation. If you have a look at your businesses and I say what different things within your business are holding you back, you know what they are. You'll have loads of ideas. You know basically what's holding back your decision making, your investment choices, you know, your hiring processes, whatever it happens to be. The process of exnovation is the idea that you take parts of your business that are costing you a lot of time, effort and money to manage or to keep running but offer very little value to the organisation.
You know in the technology world these are sort of things like the mainframes and everything else very high cost to maintain but the value to the organisation is relatively low. The more time you spend on managing things like legacy systems or things that add very little value to the company, the less time you're giving to the big picture for the company. You've also got to think about dialogue.
If we live in an increasingly VUCA world, volatile, uncertain, complex, and ambiguous, you've got to be able to have a conversation with everyone in the company. That means talking about everything. I mean, so for example, if there was a problem in the future, would you want to know what that problem was? Even though basically the topic itself might not be PC, you've got to be able to honestly and openly talk about any and every issue because if you don't then people will hide issues and if you are hiding issues then you know that they're an issue when it's an issue.
So encourage lots and lots of internal dialogue and debate. And you've got to be able to trust one another. You also need to communicate often. We live in very very uncertain times. And what we've actually found is if we're going through a huge sector change, if the leadership teams are quiet, what are you all starting to think? You're listening to the news. You're listening to the rumours.
Over time, if the leadership teams basically are constantly quiet, people within the organisation are now starting to get anxious. They're starting to make up rumours. They're getting worried. So in VUCA times, you actually have to overcommunicate. This is what we're doing. This is how things are going. Just to let you know. And then ideally open and honest communication because trust within organisations matter more now than ever before.
You also need to try to identify bottlenecks, inflection points, and trends early. A reason for this is if you knew with perfect clarity what next year held for you, you could develop the perfect plan probably and you could execute against that plan. The reason why everything is so confusing and confounding basically and the reason basically why you're being pulled in so many different directions many of them which are wrong you know but only you only find that out with hindsight is because you can't see things happening early.
The more you see it comes back to that 30% statement. If you're only seeing 30% of the future, then the other 70% of the future is going to be the stuff that smacks you in the face, that you didn't have a plan for, that you don't have resources to respond to. The more you can see, the more you can discuss, the more you can debate, and the better your point of view. And then you can say, well, we've seen this. Do we think this is going to be real? Yes. No.
What do we think the impact of this thing is going to be? Is it going to be high impact to us or is it going to be low impact or no impact? The more things that you can see, the better prepared you can be. And then you also need to try to increase execution speeds. So a lot of the companies I work with basically they say that they're very very quick at making decisions and then you sort of say to them right okay go and make a decision on X Y and Z and they come back two months later and go we still haven't decided.
So when we think about execution speeds, this comes down to you've got to simplify the organisation, you've got to cut out waste, kind of got to be a lean operating machine. But this is also things like flatter organisations, local supply chains. So if you think about for example upgrading transmission lines, if you're getting all of your transformers and UHVDC products basically from abroad and there's a supply chain shock, then you're going to be stuck.
So this is where China do very very well. All of China's supply chains are typically in the same city for everything. In China, you don't pick a company that you want to work with. You pick a city that you want to work with. And this is where we're trying to create what we call a zero delay organisation. There are lots of different lessons we can sort of take from everywhere.
But how quickly can you execute? Execution at the moment basically is one of the biggest challenges because it's going to take you time to get the budgets and the capital that you need. It's going to take you time to get the people that you need, which is a learning and development problem generally. It's going to take you time to get planning permits. If you think about planning permits and everything else, again, what we actually see, and I'll use China as an example, but simply because I think sometimes they're interesting. If you think about planning, the reason why China is able to build out grid capacity four times faster than any other country on Earth is because they have central dashboards, they have real-time feeds, and all of their investment actually comes from state banks.
So if you think about things like the planning process, you know, Google Tapestry is trying to accelerate basically the planning process and grid connections. And then finally, shorten feedback loops. How quickly can the whole organisation tell you what's going on? So these could be things like digital dashboards, which you'll already have. These can be things like digital twins and digital operating systems. So how quickly when something happens, when there's a new piece of information, when something works, but also when something doesn't work, how quickly can people feed all this information back to you?
So the things that I've talked about here don't solve every problem. But if you can see things coming, then you're going to be in a better position to not be surprised. You're going to be able to plan more efficiently, whether that's capital, people, or whatever it happens to be. As the world gets increasingly sort of VUCA, if you have an organisation that is simpler by design, then you're going to be more agile because it's not going to take you as long to pivot from one way of working to another.
When you think about basically the definition of utilities, increasingly we're going to see DER sort of coming through. We're going to end up with more supply chain shocks and everything else. So a lot of the things you do they should be built into your DNA. Communicate often, build trust, respond to things, don't react, and you'll do just fine. So thank you very much for listening and I hope that was useful for you.
