by Tom Goodwin
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PART ONE
Change in context
02
The electrical revolution that never was
We talk endlessly of change in the business world, but not that much is different. We still pay for things more with cash than with fingerprints. It’s not that we don’t have the paperless office quite yet; it’s that we’ve never used more paper than we do today (Schwartz, 2012). Texting has been here for more than 20 years, but I can’t use instant messaging to change a flight. E-mail isn’t remotely new, yet I can’t e-mail my bank. Mortgages are given to those with a steady work history and reams of paperwork, not those who’ve created a start-up that’s exploding or who live a nomadic life. The world hasn’t changed as much as we like to think it has. In particular, we’ve failed to really understand the power of digital. In this chapter I want to go back in time and, by understanding mistakes from the past, learn how best to approach today.
For over four decades electricity spread purposefully and slowly across the world, bringing small incremental changes to factories and homes, but not adding anything transformative. Most years, small incremental changes kept factory managers happy and domestic lives seemed to improve nicely. But it’s only in retrospect that we can see how the transformative power of electricity was not properly harnessed.
From factory owners to workers, home owners to retailers, each and every single person thought they’d understood this new technology, and thought they’d made the necessary changes. They seemed to treat electricity as a new thing to bolt on to the side, a tweak based on small improvements, never truly digesting the meaning of this technology and working around the new possibilities it offered. It’s this paradox of transformative potential vs actual change that should concern everyone in any business today.
The hard sell of electricity
It was 600 BC when the Ancient Greeks found that rubbing fur on amber (fossilized tree resin) caused an attraction between the two, and discovered static electricity. But it was only in 1831 that Michael Faraday first began generating power in a consistent, practical way. It was not long before the current was reversed and the first electric motor was born. One would expect something quite so transformative to have a near immediate effect on the world, but this was not the case. Much like the early internet, few could see the meaning at the start.
Lighting was one of the first clear and obvious applications of electricity, but it still took up to 20 years to be refined into something that was more illuminator and less fire hazard than its first iterations. By 1850, 29 years into the first steady production of electricity, the National Gallery in London as well as lighthouses around the UK coastline were lit up by electrical bulbs (The Victorian Emporium, 2011). This wasn’t exactly life-changing.
Demand for electric power in households was best described as slight. Electricity was a hard sell and by the late 1800s only a very small percentage of domestic dwellings had electricity. Like most new technology it was first sold to wealthy homes as something of a gadget: first as a better way to light Christmas trees, and then a better way to light homes. In an era when the wealthy were not bothered about the workload and mental burden placed on their staff, electricity didn’t seem that helpful. It was complex too. Businesses sought to take advantage of the little growth there was by trying to create their own walled gardens. A number of closed and non-compatible systems cropped up. As there was no industry-standard equipment, anyone, whether business owner, public building manager or wealthy home owner, could ask a company such as Edison or his competitors to create a custom system for their needs. Little equipment was interchangeable between makers.
The main issue remained demand. The lack of demonstrably exciting use cases meant electrical power was largely pushed onto people, not pulled by thirsty would-be customers. People buy and want solutions, not technologies. The early demise of curved TVs or Amstrad video phones shows that, unless gadgets manifest themselves as wonderful, valuable or helpful use cases, they remain frivolous and wither. The spread of electricity was slow because the use cases were underwhelming. Nobody created anything new around electrical power. The world merely took existing items and considered how they could be ‘electrified’.
There was effectively no new thinking at all. We replicated the past in electrical form with no imagination; we even replicated the limitations. Gas and oil lighting had always been controlled at the light ‘fixture’ itself – you’d walk into a dark room, use a match to locate the light fixture and light it by hand. So the standard way to turn on electric lights was the same – use a match to find the hanging fixture and turn a switch at the base of the bulb. The idea of a wall-mounted light switch never occurred to early adopters, and then, when it was finally proposed, seemed a rather lavish and expensive feature.
A lack of both power sockets and devices to plug into them caused a curious vicious circle. How could you plug something in that had yet to be invented? And how could you create something that couldn’t easily access power? The first home goods to appear were washing machines, electric vacuum cleaners, electric irons, electric refrigerators, bread toasters, and tea kettles. Slowly over time new items were invented for the electrical age and changed our relationship with electricity. Electric fans and radiant heaters created the first expectations of climate control, and electric hair dryers, telephones and radios started broadening out electricity’s uses from the mere functional running of a household to really improving lifestyle.
The key way to think about power in the home was that it had many phases. First, an era of people discovering and refining a technology so that it could be used. Then a period when it was only for the rich, when its possibilities were hard to recognize, when we added power to old items to improve their functionality. Finally, a period when the technology plummeted in price, became far more accessible to all, but above all else, this was when new items were created around the potential of the technology. What started out as a way to make our Christmas trees easier for our servants to light became a technology that freed the middle classes from the hard work of running a house and put millions of women into the workforce.
Electrification of factories
Compared with the slow uptake of electricity for domestic use, and the lack of excitement that accompanied it, the electrification of factories was rapid and easily achieved. To best understand how electrical power was adopted in industry we must first understand how, where and why factories were built and how they were laid out and constructed.<
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The line drive system
Factories constructed from the 18th century onwards, during the Industrial Revolution, were built around a power system based on a ‘line drive shaft’, a huge, long, spinning shaft that would directly or indirectly power all the equipment in a factory layout. In the very first factories, this shaft was turned by water power, with waterwheels converting flowing water into an energy source. Over the course of the 18th century steam engines developed into the preferred source of power. Steam provided more torque and far more energy, was more controllable and allowed factories to be constructed anywhere people wished, so long as coal could be easily delivered in large quantities. The first use of steam engines, rather remarkably, wasn’t to directly power equipment in factories, but oddly to pump water upwards to storage reservoirs to enable waterwheels to operate. It’s incredible how we tend to apply new technology to old systems.
The line drive shaft dominated the layout of the factory. Running the entire length of any plant, it dictated virtually every aspect of the plant’s design. Factories were long rectangular shapes, to ensure that all the equipment could pull power from it. Walls were massive and heavy to hold the weight of it. Huge iron reinforcement was needed, making factory construction extremely expensive. Windows for light or ventilation were very hard to make, and single-storey construction was by far the most sensible.
From the line shaft, a complex system of belts, pulleys and gears known as ‘millwork’, as illustrated in Figure 2.1, would ensure that all machines could be driven by the power source and would allow a small degree of control. It was possible to remove power, apply it and sometimes change the speed, all with the mere pulling of a vast lever!
Figure 2.1 A cotton mill in Lancashire, 1914
SOURCE http://www.wikiwand.com/en/Cotton_mill
Designing factories was a difficult task. Fabrication machines were not arranged in the most efficient way for the manufacture of goods, but on the most sensible layout of the machines relative to the line drive shaft. Machines requiring similar torque, speed of rotation and operating times were placed together. The vast amount of space taken up by the machines themselves, the products being made and the needs of the millwork meant that factories were incredibly tight spaces, with products frequently moving around as they made their way through the production process.
Looking at Figure 2.1, showing a typical factory in Lancashire in 1914, we can only imagine what a hazardous place this would have been in which to work: steam engines producing incredible heat and noise; huge spinning shafts making deafening noise; vibrating equipment making everything shake; no ventilation to remove heat or smells, and certainly very little natural light. Above all else, seemingly endless arrays of pulleys, belts and shafts created an extremely dangerous working environment.
The electrical shift
Factories knew how to adapt to new power sources: it had been done before. The transition from water to steam power in the Industrial Revolution in the late 1700s, first in mines, then slowly in mills, had been smooth, as existing factories with water power systems simply built on steam plants and changed the drive mechanism. New factories took the same template and built anywhere steam plants made sense.
As late as 1900 the world still considered the shift to electricity and electrical motors in the same way. By that date, less than 5 per cent of mechanical drive power in US factories was coming from electric motors. Electrical motors were a new form of power. A form of power that could offer more torque, could come on stream faster, could be cheaper and more efficient, and that required less maintenance than the many moving parts of a steam plant. It was exciting stuff.
But factory owners around the world soon did their calculations and the business case wasn’t always clear. It was apparent in most cases that the energy required to run factories was a pretty small cost, often 0.5–3.0 per cent of all the running costs. The cost of the staff used to maintain steam plants wasn’t exorbitant, and everyone was comfortable with what they knew. It wasn’t perfect, but it was familiar. Moving to electrical motors came with the risk of the unknown. These motors were new and unproven. Factory owners would need to retrain maintenance staff, and shut down the factory for a moderate amount of time. It would entail a hefty capital expenditure for something whose benefits would only be seen in the long term, if at all. It seemed that a business wasn’t going to die immediately just because it didn’t switch from steam to electricity.
Over a few decades, however, things slowly changed. Factories with smaller power requirements made the leap first. Replacing smaller steam motors with smaller electrical motors brought the greatest gains, as electrical motors tended to be less powerful and the small steam engines were largely over-engineered and unnecessarily bulky. The world began to see change from the edges, small movements and cautious steps forward. Yet, by 1899, some 18 years after the introduction of the Edison Central Generating Station, still only 5 per cent of the power used in factories was electrically supplied (Clark, 1920).
Enter the group drive
It was the older and more traditional industries and factories that were the most reluctant to embrace the new technology. Newer industries with fewer or less strongly held preconceptions about what factories should look like adopted it most readily. This new form of production line propulsion really took off in the 1920s and 30s in those industries demonstrating rapid growth or necessitating new production processes like tobacco, fabricated metals and transportation, above all because they needed to increase the size of existing production units and construct new factories.
Competition in the design and development of electrical motors led to the equipment becoming smaller and cheaper, and gradually ingenuity was employed not just to change the propulsion mechanism, but to change the very layout of the factory.
In larger factories with vast power requirements, it seemed more sensible to split up the line drive shafts into smaller units, to group equipment in such a way so that machines that needed the same rotation speed, had the same operating hours and that would fit together sensibly should be placed in close proximity. Factory designers had once again based their thinking on what was known before – the concept of line drive shafts – and existing known techniques were adapted to incrementally improve them based on tried and tested methodology. This was known as ‘group drive’.
The cost of modifying existing factories in this way was high, so this technique was initially only adopted in newly constructed factories. Rethinking things from blueprints made change far more economically viable. It also made more sense, because often these new production facilities were making more complex goods, had more detailed and varied needs, or required a wide range of speed control, including particularly precise speed control for sensitive operations such as wire drawing or hammering iron.
‘Group drive’ offered huge potential. Line drive systems serving the entire factory wasted about 40 per cent of the power generated due to their size. They allowed virtually no local control: if machines were to engage, disengage or use different speeds, a complex system of pulleys, levers to remove power connections and new belts would be needed, making the power even less efficient.
The first large-scale operation of group drive was the General Electric Company plant in Schenectady, New York, in the 1890s. Here 43 DC motors turned about 40 different line drive shafts. Large arrays of machines in proximity to each other could all be powered by a slightly smaller, local version of a line drive, each with its own electrical motor (Schurr et al, 1990).
Thinking driven by economists
In economic terms, the switch to group drive was easier to justify than building entirely new factories, since the existing line drive system would typically remain in situ as one of the components of the overall group drive. It was now possible to justify the capital expenditure as one that increased the total power capacity of the plant and explain this decision using this logic and mathematics. It worked psychologically too: nobody likes to buy some
thing new with the implication that the previous purchase was a bad decision. The group drive system was a big success – by making motors smaller, and removing large amounts of millwork, factories saw decent leaps in improvement. These shorter drive systems produced far less friction, leading to energy savings. The risks of fire were somewhat reduced, and equipment could be arranged by the speed of rotation required so complex gear boxes and pulleys could be removed.
It was the apparent shift in thinking to group drive and the enthusiasm for this new way of thinking that arguably delayed the implementation of electricity even more. Group drive proved to be a distraction. It made factory managers content, it gave the illusion of great change, when, compared to what was actually possible, very little had happened. The resulting improvements removed any apparent dissatisfaction with the current situation and reduced the thirst to explore new avenues. If the electrification of line drives caused makers to sit back and feel proud that they’d done all they needed to, the creation of electrical group drives cemented this resting on laurels even further. It was felt that everything that could be done had been done.
So slowly and surely, as electrical motors became more efficient, cheap and durable, with more data-supported business cases, steam engines were slowly replaced. By 1920 the USA saw around 50 per cent of its power coming from electricity.
The real change: re-imagining factories around electricity
As is often the case, real change came about by several seemingly different movements coming together.
Electricity production got cheaper and far more reliable, and distribution improved slowly during the 1920s and 30s. It was now possible for factories to switch to electrical drive and not feel vulnerable without a back-up option. People recommending this change would be made to feel more confident, because the technology had evolved.