Utilities at a crossroads

We recently attended the Marcus Evans Power Plant Management & Generation Summit, where we participated in discussions with utility industry leaders related to key drivers shaping the future of the industry. Common themes we heard at the conference included:

  • Industry in flux dealing with changing generation sources and regulatory environment

  • Continued focus on driving reliability and cost competitiveness

  • Changing workforce composition creating both challenges and opportunities

  • Inconsistent application of continuous improvement at the plant level

  • Lack of common operations excellence framework and support for continuous improvement at corporate level

There was quite a range of responses to these themes - some companies seizing these challenges as opportunities for proactive transformation, others with sporadic local adaptation, and still others in a reactionary, almost fatalistic panic or resignation. Although it may be tempting to take a wait-and-see approach given the outcome of the US elections, there is a huge amount of uncertainty as to how and when policies might actually change, and many of the above themes are already well in flight.

In the spirit of "never let a good crisis to go waste", we believe that there are opportunities to make preemptive changes in the industry that can help navigate the near-term challenges and create a culture of proactive problem-solving and continuous improvement to drive profitability into the future.

You can work on your culture, and make changes to the culture to create an environment where people accept the challenges of change and proactively push to work more efficiently together to consistently “get better at getting better”. These activities will help to create significant strategic value as you reduce risk and increase the return on capital. Keys to achieve this include:

You need to engage people in something that they can relate to at a personal and emotional level. Why should I get excited about this?

The change needs to be results-driven and deliver clear improvements of results along the way so that people can have the experience of working differently.

Explicit Behaviors
It is important to describe the desired behaviors for the new culture so that people are clear about practicing them and giving feedback. It’s critical to keep the behaviors simple and minimal (4-5). It can be helpful to provide illustrative examples of what this behavior would look like in action, as well as examples of what it would look like if it weren’t in action.

Working on the Business
You cannot change culture directly. You must make this change by working on the systems and processes that deliver value. It is important, therefore, to work on enough things (work flow, decision making, information flow, roles and accountabilities) that a critical mass of people have the opportunity to practice working differently together.

Programmatic Approach
It is important to ensure the cultural change effort isn’t just a series of initiatives, but is apparent as to how all the pieces fit together and it is managed programmatically.

Long Term
Sustainable culture change is a three-to five-year journey. Change happens at an individual level. Leadership needs to compel the people in the organization to continually work on the culture change throughout the journey.

Seth Tyler

As Chief Operating Officer, Seth has broad responsibility for oversight of all aspects of day-to-day operations, including program delivery, business development, marketing, finance and human resources. Seth began his career in Evolve as a Client Partner, working on site with clients to help them implement major change in their business. He played a significant role in helping to establish and build Evolve’s North American business.