In December 2010, Insight Labs convened a group of thinkers to meet with the leadership of the Illinois Commerce Commission and develop new ways to get consumers to participate in energy-saving programs. The big idea that emerged was a way of presenting improved energy choices as part of an employee benefit package, on the theory that consumers were more likely to respond to relationships with their employer than with their utility company or the government. The conversation also produced useful insights into how to encourage consumers to act on their long-term interests rather than for immediate gain.
Representing the ICC was former Chicago alderman Manny Flores, then the body’s director. Flores has since moved on to the Illinois Department of Financial & Professional Regulation, but he was happy to reflect on his experience with Insight Labs Content Director Andrew Benedict-Nelson. In their conversation below, they further explore the discussion in the Lab with the ICC and consider how to bring similar innovation to governments everywhere.
Andrew Benedict-Nelson: Tell me about what happened in the Lab with the Illinois Commerce Commission.
Manny Flores: We presented a problem to a group of individuals from different backgrounds – individuals who were both from the private sector and non-profit sector. They tended to be executive-level individuals. We presented a narrow problem: how to expand energy efficiency through the ICC’s jurisdiction, but in a creative way that would expand participation. We also provided the context of the current state of affairs in Illinois and nationally in terms of energy efficiency programs and how effective they are currently.
It was a really neat process where folks analyzed the problem and evaluated the context provided, then came up with a roadmap on how to enhance energy efficiency in a way that the ICC or other traditional, incumbent stakeholders could do. We looked at some of the inhibitors for expanding energy efficiency, taking a look at how we currently engage people, and through that process developed an alternative model. The approach provided for a “macro” and “micro” perspective on how to solve the problem.
I’ll give you an example. For our group, we came up with a plan that would include employers, developing new relationships between the utility and consumers. The idea was to get increased consumer buy-in by relying on a third party that perhaps had a better relationship with the consumer.
Frankly, there is a tension between utility companies and their consumers, where there may be a better relationship that exists between employers and employees. We looked at the model of employee-based benefits, then looked at how we could create an energy efficiency program that would become something like a benefit. That led to a higher-level, “macro” analysis of how we use different connectors to bring about better outcomes.
ABN: Could you tell me a little bit more about how you arrived at that conclusion?
MF: When I first described the problem, the participants asked me questions, pushing me to describe the problem in a way that was not so technical, in a way that a layperson would understand and relate to. That is not something unique to the topic of energy. That speaks to any complex issue.
We live in a complex world and a complex society. So one of the benefits I got from the session was thinking about how to better communicate a challenge – not just one that affected the ICC, but a global challenge. How can we be better stewards of the environment? How can we better deploy energy? How do we communicate these topics in a way that inspires and gets people more engaged, especially in a time when you have many complex issues that are important to people’s lives? This group process led us to simply and communicate our message in a way that would be understood by a larger group of constituencies. That was in fact what laid the foundation for getting the group to really look at the problem and come up with a creative alternative.
ABN: I can’t tell you how many times I’ve heard from non-profit or government leaders that they spent a good third of the session just explaining their problem – and they’re grateful for that. Once the problem is well-defined, it isn’t so difficult to solve. It makes you wonder how many other policy problem are like that.
MF: I don’t know if it’s simply explaining it. The issue is how you get to a point where everyone is using the same language to talk to each other.
ABN: Right – it’s not just a matter of picking the best words in your policy pitch. It’s a process of give and take.
MF: In these forums, there is a dialogue where everyone is engaged. Through that series of questions, they synthesize the information. Engaging in that process gets everyone to the same communication platform. That’s an important process. I think if you don’t start with that process and really engage in it, you’re not going to get to an optimal solution, or alternative. You don’t really know if it’s the optimal solution until you implement it.
ABN: Was the ICC able to implement this program in the end?
MF: I had started to talk to some of our retail energy staff for the purposes of convening meetings with members of the Chicagoland Chamber of Commerce who were already involved in purchasing their energy from retail suppliers – companies other than ComEd or Ameren – with an eye toward asking them what they were doing in the area of promoting energy efficiency. Almost all of these companies are engaged in energy saving programs of some kind. Unfortunately we were not really able to implement the idea.
ABN: Even though this proposal did not come to fruition, would you say that the ideas and the process that generated them still have value?
MF: Absolutely. If you are the company or entity using Insight Labs to come up with an alternative or solution to a problem, you are tapping into creativity and skill sets and know-how from a number of different experts who are dynamic in their respective fields. So getting a new perspective is one clear benefit. But you also learn the value of convening groups to analyze problems and get from point A to point B to a workable point C that will be effective. You have to figure out what kind of problem is worth bringing those people together to come up with that sort of solution. The various actors come up with a common communication framework that lets them all tap into their different backgrounds and come up with a viable solution or alternative.
We didn’t treat Insight Labs as the only tool in the box, but we thought it was a pretty cool tool.
ABN: It’s interesting, how much emphasis you place on that communications framework. I think you’re right that it takes a significant amount of work. But when you look at most problems facing government today, there doesn’t really seem to be any effort at it. It feels as if only rarely do our representatives actually sit in a room with a common vision of what the problem is, much less the solution.
MF: I don’t think it’s just in government. I think it’s in any organization. That might be the difference between good, functioning organizations and those that don’t do very well. That may be a hypothesis you guys should test.
ABN: I wonder if we could apply this logic to the ongoing debt and budget wrangling. I mean, these guys are spending a lot more than three hours on this problem, but it seems to me that there’s not even agreement about what they’re hoping to solve for.
MF: Yes, but remember one thing – you’re pre-supposing that they want to solve the problem. What if they don’t really want to solve the problem? An Insight Lab works because you have willing participants. People agree to be in the room with an eye toward coming up with a solution or alternative that will actually be implemented – it’s not a negotiation.
ABN: But if one were to develop a five-point test for picking legislators, surely that would be an item on the list – “Genuinely dedicated to solving problems.” How do you get people in government who are interested in that first?
MF: Well, in a negotiation, you immediately go in with lines in the sand. I’m on this side, you’re on that side. Perhaps the framework that is used by our leaders is the problem. In the Lab, we did not go in with the perspective that we could only do “X.” The dynamic would be different if we had an opponent of energy efficiency in the room. So perhaps something to test would be to use the Insight Labs concept with two competing groups.
ABN: Almost a conflict-resolution Lab.
MF: Imagine taking Speaker Boehner and President Obama, then having a third party like Jeff Leitner choose people from a variety of backgrounds with no skin in the game, to get both of them to identify what the real problems are and then to come up with a framework with which they would approach it.
ABN: Do you think that kind of process would lead to better results than, say, the budget supercommittee?
MF: I don’t know. That’s something of a different animal. The supercommittee could be good if they do it right, but they also sound like they’ve already drawn those lines in the sand. You have to go into these things with an open mind, setting your pre-conceived notions aside.
ABN: Another assumption of the Insight Labs process, besides the idea that no one brings a prior commitment to a particular solution, is that by the end of the session something is going to emerge that no one person could have thought of on their own. The idea of, say, a 60 percent Democrat, 40 percent Republican solution would be ridiculous. There’s just one big new idea. I don’t know if that is happening in the discussions between Congress and the White House. I don’t know if it’s even considered a possibility.
MF: Yes, the environment is really toxic.
ABN: So I think that when you look at critics of government now, you hear two points of view. One says that we have a lack of good ideas to address our most pressing problems. The other would say that there are plenty of good ideas out there, but we don’t have the collective will to execute them. Where would you fall?
MF: I would say it’s the lack of execution. There’s political paralysis. Folks are focused too much on the political gain rather than what’s in the best interest of our country. You will always have competing ideas, but we have to get away from the belief that someone has a monopoly on the best ideas. The environment ought to be such that we are not afraid to try out new ideas.
I understand that people have political convictions and firm ideas that things ought to go a certain way. But if you become a zealot, you run the risk of forgoing better ideas and solutions to address the problem. We can either approach things from an ideological perspective or from a problem-solving perspective. When you become too ideological you focus on the label – “I am a conservative and therefore I must think that conservative orthodoxy is the best way of solving the economy’s problems.” But then maybe the conservative orthodoxy doesn’t work anymore. Recognizing that doesn’t mean you are losing your sense of conviction. It is recognizing that maybe we live in different times and need new solutions for the challenges we’re confronting.
ABN: What do you think you learned from this Lab that could be adapted to other people in government trying to solve problems of consumer behavior?
MF: I think it was that you should talk to folks who were not so entrenched within the problem. Sometimes when you have been working on a problem for such a long time, and you have been working on solving that problem with the same group of folks, you may be foregoing other ideas that other groups of folks could bring to the table. It might seem obvious, but we really benefited from a fresh set of eyes and a fresh set of brains.
ABN: I think there’s a spectrum of thought when it comes to government acting to change consumer behavior. A libertarian might say it’s never appropriate; someone on the other side of the spectrum might say that it’s justified whenever people’s overall health or welfare can be improved. What do you think is a reasonable standard for these kinds of government actions?
MF: I think it depends on what it is that you’re trying to do. There is a difference between a campaign selling a product versus a campaign that would get people to reduce gun violence. I wouldn’t even call it a campaign, because government would do other things besides marketing to try to get people to do something.
ABN: Let’s look at the energy question, then. The libertarian might say, “Look, why is it government’s place to do this? Right now people are perfectly free to join energy-saving programs. They’re perfectly free to make donations to decrease their carbon footprint. Why does the government need to intervene in the market in order to produce some result?”
MF: In our case it was in order to fulfill a mandate that already exists more effectively. The State of Illinois utility companies have to achieve a certain level of energy efficiency. There is a program they have to develop, and it has to be approved by the Illinois Commerce Commission. But a concern that many have in the energy-efficiency space is how effective and sustainable these programs will be in the long term. We have a general sense of what the level of participation will be through modeling of the data we have so far, and we think there could be a better way. What we were looking for were new, creative ideas to enhance or improve existing energy efficiency programs that were already required by law.
So in this instance, you already have the mandate. Then the question is, what is the best vehicle or set of vehicles to increase energy efficiency?
ABN: It seems to me that what you’re saying is that there is a better approach than throwing a mandate on utilities and then just telling them, “Try harder!”
MF: Right. We were looking at different alternatives. The existing alternative is based on utility companies having a direct relationship with their consumer. We were wondering if there were a better way. We wanted a better way of incentivizing energy efficiency for the everyday consumer. Tying it to another set of employee benefits would make it easier for consumers to opt in to energy efficiency programs.
ABN: So much of the way we normally talk about changing consumer behavior seems to revolve around negatives – “we’ll tax cigarettes so people will smoke less.” But what the Lab actually suggested was the creation of a new option for consumers, something that they might not have been able to do without government.
MF: I don’t know that you necessarily need government. The utility companies could have devised it themselves. And there are some creative programs out there, though there is nothing quite like what the Lab came up with. I think it was a function of bringing folks in who were not a bunch of energy policy wonks. We benefited from that.
ABN: It makes you wonder if that could be an additional role for government – bringing together new groups of people to come up with solutions, even if those solutions don’t end up being actions taken by the state.
Still, I’m interested by the fact that you say it wouldn’t have to be government. At what point do you think it does have to be? At what point do you think government is the only actor that can make something like this happen?
MF: I think it depends on who initiates the mandate. Then it’s going to be based on who has the greatest level of motivation to make something work really well. The utility companies aren’t going to go to the state and say, “We want another two percent mandate.” It’s the policymakers and other stakeholders who come together and say, “We need more energy efficiency.” And they’re also the drivers to say the mandate is not working as well as it should. Who’s motivated to change and what’s behind the motivation?
ABN: So let’s say that starting in 2012, it is mandated that every government body in the country have an Insight Lab once a year. What do you think the world would look like?
MF: I think you would see an improvement in the way that things are run. They would see they could develop better processes for reaching decisions. Government is a structure by which certain policies are adopted and implemented. But in order to do that you need a good framework whereby you can get buy-in. In the end these policies become laws, and you need buy-in for the rule of law. To some extent, people have to voluntarily follow the rules. They can decide not to follow them and they’ll be sanctioned, but there would still be harms. You can never fully compensate for that harm.
So at the end of the day, you really do need to get the overwhelming majority of people in society to follow the rules, and to do that you need buy-in. That to me is why the process is so critical. That’s part of why we have the problems we do today – you have some folks who feel like they’re not part of the process. The anger and the vitriol you see out there reflects a disconnect between what government is doing and how people are impacted by the decisions our elected officials are making and the way government functions – it’s not just elected officials, since you have agencies and others who are a part of that network.
ABN: I’ve read that you are no longer with the ICC – what are you up to these days?
MF: I’m now the Director of the Illinois Department of Financial & Professional Regulation. We regulate the state-chartered banks and mortgage brokers and loan originators.
ABN: Do you feel like there are principles from the Insight Labs you can apply in your new position?
MF: It’s just how you can organize people to get them to think differently, to come up with new ideas. This is also an area where we’ve had some of the same challenges for a long time, and if you’re not making any progress, maybe it’s time to overhaul the tools you’ve been using to fix them. We’re dealing with a foreclosure crisis, mortgage fraud, banks closing, constituency groups who feel like they’re not being valued in our economy – you have all these different dynamics – so I think that what I learned from the Insight Lab experience will be very helpful.
Image courtesy Tmontg1, Wikimedia Commons.
