Utility Week

UTILITY Week 26th June 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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12 | 26TH JUNE - 2ND JULY 2015 | UTILITY WEEK Policy & Regulation Event Making Sense of Totex – the SSE Story Totex gives companies the freedom to innovate ● People work better if they know what they're working towards ● Trust your staff – they know what they're doing I n August 2013, Alan Broadbent, at the time head engineer at SSE Power Distribution (SSEPD), circulated a call-to-action memo around the division. "Over the past few years," he wrote, "we have not moved our business targets, reporting structures or suc- cess metrics as the regulatory equivalents have moved." That was set to change. An early adopter of the totex model, SSEPD projects £15 mil- lion in totex savings and another £15 million in benefits from improved customer service over the next three years. These are benefits over a budget of approximately £100 million. With totex top of the agenda for both energy and water companies, Utility Week in association with Vision Consulting brought together industry leaders from across the sectors to hear how SSE has done it. The Utility Week Leaders' Briefing, held in central London last month, was opened by former United Utilities director Tony Conway, who outlined the challenge of totex. Delegates then heard first-hand of SSE's experience, and about the solution from Vision Consult- ing that helped create culture change, driv- ing value from the totex regime at every level of the business. It was all about people. Alan Broadbent is now director of engineering at SSEPD. He says that the old "command and con- trol management structure was a barrier to change, denying the engineers the flexibility and agility on site to deliver cost effective solutions". The solution was Vision's commitment- based management (CbM) approach, which created "entrepreneurial engineers" empow- ered to make decisions on the ground that had a direct impact on the value and return that a project delivers. According to Vision consulting operations model director Peter Luff, the system is designed to tackle com- ments such as "that's above my pay grade" by devolving responsibility throughout the organisation, allowing employees to make their own commitments around efficiency and value, and then trusting them to keep them. Managers were given the leeway to pri- oritise work on the network, to decide which would deliver the highest value or decrease risk significantly, co-ordinating the short- and long-term decisions. They were then supported in transferring this approach into everyday management discussions, through a model called the Commitment Loop. This breaks down actions so that the customer (somebody making a request, whether externally or from within the company) negotiates with the performers (those under- taking the actions) to agree clear conditions of satisfaction. This allows the performers, oen the field engineers, to come up with cost-effective and innovative solutions to problems. Con- way told delegates the engineers oen come back with a better solution that what was originally requested. "There is no shortage of ideas," he said. The challenge for senior managers, according to Broadbent, has been learning to let go and trust their staff to do the job. The key question from the audience was on the difficulty of implementing the change, and SSE network portfolio man- ager Mark Kelly said: "It does require a lot of effort and attention but we have a much better understanding of the value across the business now." Broadbent concluded: "It's a sea change for the organisation and the workforce and it ain't going to happen overnight. "Some people may fall by the wayside. But if you encourage them to do that, give them a belief they will be heard, you've got the functionality to take that and make it work."

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