Monitoring the Utility Transformation: Part 3

This blog was coauthored by Charles Tooman.

Part 1 of this three-part blog series examines forces fundamentally transforming the utility industry, specifically the introduction of disruptive technologies and the emergence of shifting customer priorities. Part 2 introduced the concept that the people strategy is one of the most critical areas of change for utilities seeking to design their future state operating models. This blog discusses the importance of creating a company culture to support the utility transformation strategy.

Culture Provides a Foundation for Successful Transformation

Culture is a set of norms, values, and behaviors that inform a utility’s approach to executing its strategy. While strategy defines direction and focus, culture defines engagement, passion, and execution. Culture and strategy are a powerful duo and must work in concert.

Establishing the right culture is critical to successful strategic transformation and is central to ensuring that desired behaviors are supported and rewarded. Consider that transformation requires a distinct set of behaviors and attitudes that may be misaligned to the legacy utility culture (often characterized by risk aversion, operational silos, and rigid process). In today’s environment, transformation programs require an environment that fosters experimentation and cross-collaboration to drive innovation. Additionally, transformation itself is an iterative, continual process. Transformation has the goal of creating an environment that enables fluidity and adaptation to a changing marketplace with new customer offerings that leverage technological advances. As customer expectations and technology will continue to evolve, it is imperative that utilities also learn to evolve. Transformation is a journey that will enable the utility continuous adaptation to changing circumstances and continue to offer innovative customer-driven solutions.

Given the rapidly evolving environment, the foundations of a successful transformation strategy include agile and flexible employees that are responsive to change and organizational norms that support experimentation and learning. Adopting a culture of continuous improvement is mission-critical to the success of a utility’s transformation journey.

Assessment Aids to Create a Culture of Continuous Improvement

It is often said that culture is hard to measure. However, it is Guidehouse’s perspective that cultures of continuous improvement share the following characteristics:

• Decision-making: The general leadership style in a business unit, department or enterprise fosters responsiveness to shifting customer demands and embraces technological advancements.
• Engagement: The methods used to collaborate internally and externally give voice to new ideas and are not knotted to old ways of working.
• Performance Measures: Organizational performance metrics are directly tied to the objectives of the organization and can be directly affected and improved by the team.
• Ways of Working: The working style of a group is directly aligned with the business value that the work creates, including how daily tasks and processes are executed, how innovations are developed, and how problems are solved.

A culture assessment can assist in determining if these elements are in place to support the transformation strategy. The benefit of a culture with a healthy appetite for change is that the desired norms, values, and behaviors are in place and will be rewarded to drive the innovation necessary for a successful journey.