Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
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12 | 8TH - 14TH MAY 2015 | UTILITY WEEK Conference & exhibition Utility Week Live, 21-23 April, Birmingham Utility Week Live: review T he need to address the challenges of leading change comes at a time of enormous upheaval for utilities across deregulated energy markets and regulated monopolies. Regulator-driven water and network compa- nies are being pushed to drive down costs while putting customers at the heart of their business plans. Meanwhile, deregulated energy firms face the threat of an increas- ingly hostile political environment and ris- ing competition from smaller "challenger" retailers. Utilities need to "consciously take a win- ning mindset", said analyst Mark Thomas, a strategy and marketing expert at keynote conference sponsor PA Consulting. In the roundtable debate, senior mem- bers of the big six companies, leading ana- lysts, and supply chain firms agreed that the need for change was clear: conventional gen- eration has traditionally been at the heart of these companies but as the "money has dropped out of the generation business" the need to engage better with customers has grown. Three clear points emerged from the dis- cussions about trying to lead change: The old guard is blocking progress Previously, one roundtable delegate said, a big six utility knew who it was competing with, "the other five". Now, the net effect of multiple small new entrants is cutting into market share and increasingly decentral- ised energy solutions emerge. Further in the A lively roundtable debate and suc- cessive presentations at the Util- ity Week Live Keynote conference tackled the challenge of recruit- ment head on and brought some refreshing insights to the fore. There was the usual emphasis that busi- nesses must engage early with schools to nurture interest and understanding in the wide range of careers available in the sector. But alongside this there was firm agreement that a focus on developing training frame- works and technical qualifications, which will remain relevant in a world of fast-chang- ing technology, can distract from the funda- mental importance of recruiting for "cultural fit". "Hire for attitude, fire for attitude," was the mantra taken up following a presenta- tion from Andrew McMillan, former head of customer service at John Lewis. That said, discussion soon made it clear that existing HR policies and recruitment structures can stand in the way of this ambi- tion. "Tick-box" requirements for candi- dates to fill certain qualification criteria can cause potentially worthy individuals to be discounted without being subjected to more qualitative assessment. Attendees from specialist recruitment organisations said HR representatives should not be responsible for the interview process – but there was also a desire expressed by operations management to receive training and development for interview skills. It was felt this would help them recruit the diver- sity and character-driven talent they know is required to see their organisations through times of radical change. Share the vision A keynote conference roundtable on leadership for change found uncertainty clouding strategic vision. Recruiting talent The issue of skills and talent comes in the wake of debate change. Keynote conference sponsor future, disruptive change-makers such as Google could emerge as a real threat to tradi- tional energy companies, others added. "What can a utility do to defend itself against a world where anyone can do your job?" one roundtable member said. Shiing political pressures promote reactivity, not proactivity The uncertainty of future competition is met by the more pressing uncertainty of the regulatory environment. Political heat on the energy sector has forced many industry lead- ers to rethink their strategies, but they also risk basing their strategy on a reaction rather than a proactive and authentic approach. On the other hand, with the energy sector's com- petition probe rumbling on, companies face a danger of putting off important leadership decisions which could cost them a competi- tive advantage. In a separate roundtable on the same topic, leaders from the water industry coun- tered this problem by insisting that a cus- tomer-focused vision should always remain constant, while the shiing demands of Ofwat will fall within that unified focus. Everything to play for Both energy and water sectors face simi- lar challenges in implementing change in companies that oen have a long history of inefficiencies and unchallenged approaches to problem solving. But PA Consulting's Thomas urged delegates to embrace the opportunity posed by the changing environ- ment in the same way that today's strongest firms embraced the opportunities presented by the economic recession. None of the challenges faced by utilities are existential, and advancing technology is on our side, delegates added. Leaders should drive change now, before threats become imminent, and while there's still everything to play for. JA "What can a utility do to defend itself against a world where anyone can do your job?" " "