As Bob Dylan sang, “The Times They Are A-Changin’,” and the utilities industry is feeling the heat, so to speak, more than ever before. An industry that is traditionally change-adverse has found itself in a state of transformation in recent years due to a number of market, operational, and workforce changes.
To stay ahead of the curve, steady-state and slow-moving approaches of the past must evolve into proactive, nimble, and digitized service models for the future. But the real challenge is ensuring transformational change succeeds, which is no small feat when more than 70 percent of programs fail.
Pressure to Transform
There are a number of internal and external pressures contributing to a need for transformation within the utilities industry, including changes in customer demand, pressure to improve performance and mitigate the rising cost of energy, regulatory changes, an aging workforce, dated infrastructure, and a push to diversify energy sources.
To support a transitioning workforce, improve customer service and enhance operational efficiency, utilities are swapping quasi-automated systems and processes with new ways of working and innovative digital technologies such as smart grid, advanced metering infrastructure, meter data management, distributed energy sources, enterprise data management, and workforce management systems.
In the last 5 years, the utilities industry has undergone more change than it has in the previous 20. It’s not uncommon for a utility company to implement multiple new technologies at one time that affect frontline employees. So how does an industry that is slow to adopt change successfully navigate through continuous change?
Not All Change is Created Equal
For change to be successful, utilities must first understand the type of change it is undergoing. There are three types of organizational change:
- Developmental – Most traditional project and change management plans address developmental and transitional changes. Developmental changes are the simplest in that they improve upon what an organization is already doing – a work process improvement, for example.
- Transitional – Transitional changes replace the current state with a new state. New products or services and system implementations that do not require significant shifts in mindset or behaviors are examples of transitional changes.
- Transformational – Transformational changes, however, are the most complex because the future state and current state are drastically different and often involve changes to processes, technology, organizational structure, and people. Additionally, at the onset, the future state is not fully known; rather, it evolves over time, which equates to high levels of uncertainty because it requires operating in the unknown.
Align and Conquer
Although the future state might be unknown, leadership engagement and alignment on future direction are critical for success. More often, when an organization is undergoing lengthy change, leaders are engaged early on, but commitment fades over time. Change doesn’t happen overnight, and it’s unrealistic to expect employees to remain committed without a visible leadership presence. Furthermore, a shared vision among leaders sets the tone for setting strategic objectives, defining values and making decisions.
The Right Talent
An electric utility would never send a rookie apprentice out on his own without the proper training, skills and experience to complete the job safely and accurately. Similarly, successful organizational change, and especially transformational change, requires dedicated and experienced resources. A well-respected operations manager with years of experience in his field doesn’t always equate to a seasoned change management practitioner. Effective change managers understand how to navigate the organization, set priorities, anticipate resistance, overcome roadblocks, keep the project on track and manage ambiguity.
Champion for Change
For employees to adopt new attitudes, beliefs and behaviors, they must recognize and believe in the need for change, otherwise they will revert back to the old ways of working, thinking and behaving. Engaging those directly affected by change early in the process significantly increases the likelihood of successfully adopting change. Additionally, selecting the right “champions” for change throughout the organization will help in driving commitment and a willingness to adopt the future state.
Commit to Planning, Not Plans
Because defining the future state is an evolutionary process with transformational change, change management plans should be developed with the understanding and acceptance that they too will evolve. Develop an overall strategy for how change will be managed and within individual plans, incorporate opportunities for feedback, evaluation and modification, as there may be a need to alter plans or incorporate new tactics over time.
Although change is inevitable, utility companies have the ability to influence whether change is successfully adopted. Through sponsorship, dedicated resources, engagement, and continuous planning, change programs don’t have to be in the 70 percent that fail. With changing times, utility companies should be looking for ways to evolve through effective change management practices to, in turn, beat the heat.