AGL calls on former Telstra guru for the future
AGL Energy is hoping a former Telstra executive might help the power giant land the next big thing.
AGL Energy is hoping a former Telstra executive might help the power giant land the next big thing.
John Chambers, who ran Telstra’s $10bn mobile business, was hired by AGL chief executive Brett Redman to set up an ideas lab spanning energy, telecoms and tech start-ups as the utility looks to move beyond its core electricity base.
Redman’s decision to tap the former Telstra guru underlines AGL’s plan to accelerate a move into mobiles, data, broadband and electric vehicles at a time when Telstra is plotting its own shift into the energy and health sectors.
After exiting Telstra in October 2017, Chambers took a break from the corporate world to set up his own advisory business. AGL became one of his first clients, with Chambers “fascinated” by the challenge of developing a future business model for one of Australia’s oldest companies.
“Genuine innovation and future business roles can be heartbreaking because you’re away from the core business and you need to be prepared to both work on the edges but also bring those ideas to the core,” Chambers tells The Australian.
“Ultimately a dollar of capital is going to be in the core because my horizon is a lot longer so you need to be nimble and think on your feet.”
A chat with Redman got a deal over the line. The AGL chief had sketched out a vision combining future growth in batteries, smart appliances, virtual power plants and electric vehicles, paired with its extensive customer network across electricity and gas that it could bundle together with mobile and broadband offerings.
Chambers — officially in charge of future business and technology — was handed control of the entire 500 people-strong technology function along with its AGL Next innovation arm, which comprises two dozen staff testing tech ideas that could be folded into the existing business or spun out as new products.
“Brett’s ambition to me was really clear from the start,” Chambers says. “He believes you can never turn this tap off, you need to keep innovating and keep learning from it.
“You don’t have to spend hundreds of millions, but you’ve got to build this muscle and try new things. The whole core of energy is changing, everyone can see that, so we’re looking to understand and solve problems and really add value for customers.”
AGL launched its own mobile phone division on Monday, offering plans with discounts for customers who combine services with their energy contracts. The move comes 18 months after the utility walked away from a $3bn takeover of telco Vocus as Redman seeks to offset falling earnings from its mainstay business.
The company issued a steep profit downgrade for the 2021 financial year just days before Christmas, and also warned of a deteriorating 2022 with a “material step down” in wholesale electricity earnings.
Chambers says there is little ducking the tough outlook and pushing into new product streams is sensible, just as his former employer Telstra seeks to do.
“It is a juggling act and certainly the electricity market pricing is genuinely challenging,” Chambers says.
“I think you’ll see us more and more look for new revenue streams and scale.
“Brett is very passionate that we move more quickly into the transition now. COVID has accelerated that and government policy has also accelerated that. So the energy around deploying new energy at scale is phenomenal and moving very quickly. But the headwinds are real. And if I’m honest, that was one thing I didn’t fully understand until I got here.”
Chambers and his team at AGL Next will be given breathing room to test the market for new concepts, including an electric vehicle subscription service with hopes to become the Netflix of electric cars, waste-to-energy innovation, and a new solar monitoring service that could mine data from rooftop panels to boost efficiencies and the flow of energy.
Talks have also been held with airlines and brands such as Bunnings and Wilson Parking over potential ventures in electric mobility.
“Some of these technologies are really only a few years away and you have this exponential electrification coming down the line which is what we are preparing for at scale,” Chambers says.
“That’s when you come back to having that muscle in place, because change is happening very quickly.”
However, the 20-year Telstra veteran knows that some ideas may fail to fly. “It’s one thing to live on a corporate salary and talk entrepreneurialism, but ultimately it’s a very different hustle for someone who’s trying to solve a problem,” he says.
“One of the big challenges in a corporate is when you come up against the risk and brand and those sorts of issues while still being an experimental place where we try new things.
“Picking winners is really hard and picking a winner out of nowhere doesn’t really happen.”
AGL Next plans to work collaboratively, tapping into a huge network of start-ups that could just be the next big thing.
“We define areas where we know problems need to be solved. Then we run our own experiments with a team focused on a funnel of scanning dozens of opportunities and then running short, sharp experiments with customers to solve those problems. We choose a handful a quarter to progress,” Chambers says.
“What we’re really trying to do is understand and solve problems and leverage those 4 million-plus customers we have into a better, simpler experience.”