Monitoring the Utility Transformation: Part 2

Part one of this three-part series discusses forces that are fundamentally transforming the utility industry. The center of this transformation revolves around how power is generated and distributed, and the evolution of the traditional relationship among stakeholders across the electrical grid. The utility sector is moving away from one-way grid architecture powered solely by large centralized generation assets toward a platform of two-way power flow and intelligent grid architecture. The drive for change is amplified by the continued financial and operational impacts of the coronavirus outbreak. Utilities are investigating alternative revenue streams, urgently executing digital strategies to achieve operational efficiencies, and implementing protocols to accommodate a remote workforce.

Redefining the Utility Operating Model

This combination of forces drives utilities to reevaluate strategies and redesign significant areas of their operating model. For example, utilities are assessing the following:

• Investigate and confirm why elements of the utility’s strategic vision and objectives support transformation.
• Identify what aspects of the current state operating model will change with multiple transformation efforts and assess the impact of those changes.
• Define the transformation program roadmap and confirm how performance is measured in the future state.

One of the most critical areas of change for utilities seeking to design their future state operating models relates to the people strategy. Utilities must address all elements of human capital, which is central to achieving transformational goals:

• Skill-Alignment: Redefining the future state skills and capabilities required to deliver new products and services.
• Recruiting: Identifying the channels through which the best candidates can be identified, considering multiple factors including capability, diversity, and other objectives.
• Retention and Advancement: Retaining and promoting new team members through a revised performance management platform.
• Knowledge-Transfer: Ensuring the deep subject matter expertise and insights from longtime employees is captured and integrated into new processes and methods.
• Training: Providing access to training on a myriad of topics, including advancements in domain-specific areas of utility operations and other key capabilities for the future.
• Communication and Change: Embracing a constant change environment by using various forms of communication and leaning into change management as a core organizational skill.
• Organization Structure: Evaluating and transitioning legacy organization structures in line with emerging best practices by reducing hierarchies, reducing levels and layers.
• Leadership: Addressing the sectorwide need to bolster new generations of leadership through training, mentorship, and coaching.

The Industry Is Changing the Future of Work

The transformation programs pursued by utilities will redefine legacy ways of working and fundamentally change the future of work. Addressing the people side of change will drive successful utility transformation. Inevitably, addressing people, process, technology, and governance in an integrated fashion will drive culture change, which is a goal of transformation.

Increasingly, the right culture is seen as a unifying force; a differentiator and tangible asset that utilities must address particularly in today’s uncertain environment. The next blog in this series will discuss how people-focused transformation can be molded into a continuous improvement program that benefits the utility (and its staff and stakeholders) throughout the transformation life cycle.