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With the increasing pressures to meet a cleaner energy future and growing customer expectations, energy and utility companies continue to embark on transformational journeys involving new technologies. Being successful and maintaining lasting, or sustainable, change can affect your company’s ability to evolve internally. It may also be the key to addressing regulatory and societal pressures, meeting business objectives and continuing to provide reliable, affordable and safe resources to customers.
In a November 2022 PwC Pulse Survey, nearly all (98%) of CIOs said they’re spending more or the same amount of money to digitally transform operations. Investments in finance and other transformations ranked at similar levels. So much is on the line, yet companies can fail to create an environment for long-term success and not know it until well after the go-live celebrations have taken place.
“It’s critical to plan for and create sustainable change far past what might originally be thought of as the ‘end’ of the transformation.”
What are obstacles to change adoption for energy and utilities?
Transformations that fall short tend to follow common patterns. Failing to support adoption past the initial go-live often lands at the top of the list. It’s important for energy and utility companies to have the right structure in place to support value realization and continuous improvement. Other obstacles could include failure to recognize and address organizational change fatigue and other reasons for resistance within your workforce. Deeply ingrained codes or behaviors, such as a risk-averse mindset often common within utilities, may work against the adaptability needed for transformational change. Likewise, oil and gas companies could face cultural implications of the boom or bust cyclical nature of the business. Organizational transformation involves recognizing potential challenges and taking proactive steps to avoid them.
Four steps to make your next transformation more successful
Whether you’re the head of technology, human resources or a business unit, sustainability should be a guiding principle throughout the life of the transformation and beyond. Here are four key steps energy and utility leaders should consider when planning a successful, sustainable transformation.
1. Plan up front and plan beyond
While planning for change and enabling sustainability are two different things, they go hand in hand as part of effective transformation plans. Sustainability is often, and mistakenly, thought of as the final phase of change management. However, it’s important to have a plan at the outset that is adaptable to changing needs. Initial planning should include a clear understanding of desired business outcomes and an articulation of what success will look like well after going live. Also, consider your resource needs for the transformation and for continued support and success long after launch.
Example: Sustainable benefits realized with tech-enabled thinking
One energy and utility company implemented new technology to enhance operations, streamline processes and gain better visibility into scheduling. While the new system helped to speed up how quickly work could get done, users didn’t fully realize the benefits because change management and sustainability planning weren’t considered as part of the project’s initial scope. The company turned things around by welcoming coaching and training focused on problem solving and critical thinking. This helped the team make better tech-enabled decisions and use the new technology more effectively for strategic crew and supply dispatch, overtime reduction and other sustainable benefits.
2. Find your informal leaders
If you dig deep enough, most organizations have a network of authentic, informal leaders. These are people who can organically influence and energize others without relying on a formal title or position. This could be a lineman from your smallest division, a long-term rig operator or a newly hired customer call center rep. Achieving buy-in from informal leaders and getting their support to champion change efforts and model new behaviors can help to build transformation sustainability. It’s also important to break down silos to assemble diverse teams that move beyond titles, reporting lines and job descriptions to bring together whatever skills are needed for success.
Example: Informal leaders bridge a post-merger culture gap
The merger of two companies within the energy and utilities sector created the need to unify accounts payable and other finance functions. Sustainable success hinged on more than a smooth implementation of new technology, it required successfully bringing together two organizations with vastly different cultures. An organizational network analysis and interviews helped to find informal leaders from both companies. These individuals helped to bridge the gap between two cultural styles and served as change champions, system testers and facilitators of a sustainable transformation.
3. Focus on metrics that matter
As you plan for your transformation, it’s important to identify metrics or key performance indicators (KPIs) that support both your transformation’s immediate objectives and your organization’s longer-term aspirational vision. Thinking through this at the beginning not only sets a baseline, it also enables organization-wide agreement on what success looks like long past Day One of the transformation. Beyond transformation or project metrics, it’s important to consider what employee performance metrics and incentives should evolve to better support the desired long-term change. For instance, offering incentives for usage ranked as a top of effective method for increasing adoption in the PwC HR Tech Survey 2022. Yet only 44% HR leaders reported applying the method, indicating room to improve when it comes to enabling sustainable technology adoption.
Example: Measurement backed by the means to succeed
When PwC embarked on a digital transformation, the firm updated its annual performance measurement process to include technical and digital capabilities. This new dimension was supported by technologies and programs designed to help employees grow digital skills, including an interactive lab for people to collaborate on and share new automations as well as a digital badge program to enable people to continually learn and learn. This demonstrated a dedication to the firmwide digital transformation as well as an expectation that employee behaviors and skills will continue to progress and support this investment.
4. Invest in your people
Organizations may invest in processes and technology to drive business improvements but fail to recognize the need to invest in people — the engine of the transformation. Your workforce may feel this. In one PwC survey, 39% of employees surveyed told us they’re concerned about not getting sufficient training in digital and technology skills from their employer. Providing your people with the proper tools, coaching and support can increase the sought-after benefits of your transformation.
Leadership vision grounded in purpose and action
Transformation and behavior change must be grounded in tangible vision, purpose, business context and rationale. Make sure everyone knows what you are doing, why it’s important and the impact it can have on society — from serving customers better to enabling the cleaner energy transition. This vision should be backed by dedicated leadership support, which includes modeling and supporting the new behaviors required to sustain change.
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