By Heather A. Campbell, P.Eng.
FAIL-FAST, KILL ZOMBIES, AND BE HARSH: HOW TO FULLY EXPLOIT CANADA’S ENERGY INNOVATION ECOSYSTEM POTENTIAL
Business schools often teach failing fast, an entrepreneurial skill and a strategy that focuses on quick experimentation and iterative ideation to learn quickly from errors and only dedicate minimal time to product or technology perfection prior to launching a business or a technology solution. In theory, when fail-fast approaches are used businesses maximize resource efficiency, develop viable products and solutions through quick decision-making, and shrewdly pivot to increase productivity.
The Canadian energy innovation ecosystem talks a good game about failing fast and consistently appeals for agility, resiliency, and recovery from failure. These are all excellent for a thriving entrepreneurial system, appropriate for Canada’s energy resources, and helpful to Canada’s energy innovation ecosystem.
Does Canada fail companies fast in practice? If Canada were failing companies fast in practice, Canada wouldn’t have a prolific number of zombie firms. Fail-fast approaches and zombie firms are connected. The Canadian energy innovation ecosystem must actively address zombie firms and simultaneously apply fail-fast approaches to stimulate productivity and performance in Canada’s energy innovation ecosystem.
Technical calculations aside, zombie firms are economically underperforming businesses which are often kept alive by government intervention, bank loans, and fluctuations in commodity prices. These are firms which perform poorly over a long period of time without folding, and drag down Canada’s productivity, performance, and economic potential. Statistics Canada (Amundsen, Lafrance-Cooke, & Leung, 2023) reported that: “Zombies were prevalent in all industries, but the share was highest (10.6%) in mining, quarrying, and oil, and gas extraction in 2019. Among publicly traded firms, the zombie share in mining, quarrying, and oil and gas extraction reached upwards of 50%.” This is completely counter to the fail-fast principles the energy innovation ecosystem hypes that it readily deploys.
The good and talented people embedded in various innovation and research bodies are quintessentially Canadian: they’re nice, to a fault. They are the folks who will try multiple solutions and seek out myriad opportunities to assist a project, a small-medium enterprise (SME), a burgeoning startup, or other Canadian company to be successful with their energy innovation. These folks are Canada’s helpers – abundantly understanding and empathetic people. A cultural shift in their approach to their oversight of energy innovation ecosystem initiatives is required to allow companies, technologies, and projects in the energy innovation sector to fail fast. The drain on government resources that results from talented government and government agency team members working to help zombie firms survive must be stemmed. Weak firms and weak solutions need to exit the market and stop consuming government investment capacity, hoarding innovation talent, and taking up limelight and visibility. To address zombie firms and enable innovative Canadian energy firms to efficiently thrive, Canada needs to deliberately take action to ensure unsuccessful ideas, weak firms, and unviable technologies fail fast.
This deliberate action could take shape by attaching each energy technology innovation investment to a mandatory key metric and deliverable that assesses and calculates fast failure. The deliverable is either met or exceeded, or the project is cancelled, the technology is buried, and the company is folded. This approach will seem harsh to Canadian firms, startups, SMEs, and developers who are accustomed to an energy technology innovation ecosystem that is caring, empathetic, and highly supportive of their business needs. A fast failure mindset however may need to be presented as a kindness and a critical need to accelerate the efficiency of the energy technology innovation ecosystem in Canada. Those nice people in Canada’s innovation and research bodies may need to learn to be ruthless.
Getting rid of zombies is hard, at least it was on ‘The Walking Dead’. To disrupt the comfort and proliferation of zombie firms in Canada’s energy resource sector, stimulate Canada’s productivity and performance, and fully exploit Canada’s energy innovation ecosystem potential, Canada will need to take fail-fast approaches out of theory, embed them in our investment mindset, and put fail fast tangibly into practice.
Heather A. Campbell, P.Eng. Heather Campbell is an accomplished energy professional focused on energy transition, sustainability & inclusion. She provides independent advice on low-cost, low-carbon energy solutions, clean technology, and zero-emissions projects. With a B.E.Sc. in Biochemical & Chemical Engineering (Western University) & a LL.M. in Energy Law & Policy (University of Dundee) she’s a licensed professional engineer with APEGA. She is a board director at Werklund Centre, an advisor to NorthX Climate Tech, and an advisor to Western Engineering. She was awarded the Queen Elizabeth II Platinum Jubilee Medal, Calgary Black Chambers Black Achievement Award in Energy & the 2024 Harry Jerome Decade Leader Award. As well, Heather is a Scovan International Women’s Day keynote speaker alumni.
References: Amundsen, A., Lafrance-Cooke, A., & Leung, D. (2023). Zombie Firms in Canada. Statistics Canada, Economic and Social Reports. Ottawa: His Majesty the King in Right of Canada as represented by the Minister of Industry responsible for Statistics Canada. doi: https://doi.org/10.25318/36280001202300300003-eng
Originally published in IGNITE V11.
