(September 2005) Top honors in our first annual financial ranking go to those staying with the basics and to those dealing with soaring commodity prices.
How to Achieve High Performance
Lessons from the top 40 utilities.
step-change improvement (15 percent plus);
• Is linked to a quantified business case and set of metrics, which are tracked and “monetized” through the effort;
• Does not just focus on cost reduction; it also works to enhance service levels, create a long-term strategic advantage and drive growth;
• Is not a “quick fix” project, but rather a medium- to long-term (two years plus) fundamental change in operations. The business transformation roadmap, however, includes quick wins to demonstrate early wins and help self-fund the overall transformation effort; and
• Creates change that is sustainable over the long term, such that companies do not revert back to “old” processes and behaviors.
Our research shows that more than 50 percent of transformations are not successful, making these programs high-risk/high-reward propositions for a management team. In our research on high-performance transformation, we reviewed more than 50 transformation efforts across industry sectors, to distill what differentiated the successful transformations from the failures. The 10 key success factors are outlined in Figure 6.
So when is the right time to undertake a transformation? It is very much a function of a company’s cultural DNA. The easiest time to transform is, in some ways, when performance degrades and external factors create the inevitable burning platform that forces alignment within the C-suite.
The best time to transform, however, is when times are good. Companies that sustain their leadership position over time have an ability to change while they are at the top, before their performance starts to stall or decline. This is particularly germane to utilities that stand at defining crossroads around infrastructure integrity, technology/innovation, environment, people, and leadership. Key decisions are required in the near term that will set the course for years to come.
Many utilities in North America already have started their transformations, which suggest the performance spread in the 2017 top 40 list will be more significant than it is today, as tomorrow’s leaders chart their journey toward the high-performance utility of the future.