Five steps forward
Making this realignment in a technologically and process-savvy way requires leaders to develop bold and comprehensive talent plans based on the recognition that human capital is the primary value in the post-industrial marketplace. These plans must sustain structures that are fluid enough to permit the smooth transmission of ideas and innovations. At the same time, they must also support the development and emergence of leaders with the skills to match talent with opportunity and to encourage entrepreneurship at every level.
Such a shift would represent a radical departure for utilities, which have traditionally lagged in human capital innovation. Given the scope of the challenge, the road ahead might seem rocky. But Booz Allen Hamilton’s experience working with industry leaders suggests that the following five practices can help utilities create a platform that addresses emerging talent demands.
Redefine knowledge management. Knowledge management has traditionally been considered an IT function, a way to archive competencies that can be plugged into the larger structure. But knowledge embedded in IT often can’t adapt or grow to meet changing needs. True knowledge management does not reside in technology but in what people know and do and how they share their knowledge with others. Only a comprehensive mapping of individual capabilities within the organization can accurately reveal where knowledge resides and needs to be adapted or retained.
Organizations talk about people being assets, but the real asset is the knowledge that people apply. To develop and retain this knowledge, it must be woven into the institutional fabric of the organization. This can only be done if an organization provides to its business units a suite of practices that capture and develop the strengths of individuals. These practices, whether craft-based apprenticeships or formal mentorships for managers, must be flexible enough to serve the needs of individual units yet consistent enough to support the organization’s culture. For that to be the case, knowledge management must be jointly owned by Human Resources and the business units.
Foster flexibility. Smart grids allocate power according to real-time demand, delivering service in response to constantly changing needs. Because demand for the product delivered—electricity—is flexible, the organizational and talent infrastructures that support it must be flexible as well.
Cross-training and matrixing help promote collaboration because both practices together constitute a flexible system for allocating workforce talent. Other helpful practices include promoting career mobility within the organization, job sharing, and providing semi-retired workers with a customer for their skills: their former employer (see sidebar).
By contrast, tenure-based systems that promote talent based on seniority or quota-based diversity equations inhibit an organization’s ability to attract and retain talent. The more receptive an organization is to a variety of work arrangements, the more its structure and operations will mirror those of the efficient smart grid on the horizon.
Support transparency. The deregulation of retail electricity markets has created demand for more transparent utility businesses. Just as buyers of products and services want to know their options so they can make informed choices, talented people want their organizations to share information that could affect their careers. Individuals who understand the value of their knowledge want to control their professional destinies. They won’t accept being told, “I know better” by a boss.
As a result, companies with progressive talent policies have begun posting job openings across divisions in open forums. In these organizations, people don’t need to get permission before responding to an opening in another division; their own initiative or interest is sufficient. Leaders in these organizations recognize that scarce talent must be optimized across business units, levels, and functions, and that transparency is essential to achieving that goal.
Such practices, however, are still uncommon in the utilities sector. For example, one large power provider recently lost a group of highly skilled people in a unit that was consolidating, even though equivalent positions were available in another unit across the street. This company missed the chance to retain a significant and highly trained pool of talent because individual units did not share their needs across the organization.
Decouple resources from location. Although globalization makes markets less stable, it can actually make the supply of talent more stable. Increasingly, mobile labor pools are able and willing to migrate to wherever their skills are in demand. The evolution of smart and flexible information delivery systems also gives talented people access to the tools that enable them to work in far-flung locations.
To exploit these possibilities, organizations that rely on specialized talent must adopt a global approach. Such an approach responds to a shrinkage of local talent by first evaluating how work actually gets done and how people, processes, and technologies might become more efficient. After that, the organization must consider the strategic role that outsourcing could play in building a flexible talent portfolio. Focusing too much on building capacity or on buying talent in specific localities can cause organizations to miss the opportunities that the globalized labor pool offers.
Although outsourcing has often been considered a dirty word in the community-based world of regional utilities, it can be essential to providing the infrastructure needed to establish robust talent alternatives. This is especially true for firms seeking to address scarcity in functions such as IT, HR, procurement, and legal support. Many have also noted that as the global economy has expanded, outsourcing has shifted from being a way to lower the cost of labor to a strategy for tapping into global centers of excellence.
Create strategic partnerships. Utilities have traditionally been structured as a series of silos that rationalize the flow of information up and down the chain of command but permit little communication across functions and levels. Transparency undermines the power of silos by making it difficult for them to hoard information and by encouraging partnerships between and among previously isolated business units. In addition, the collaborative architectures on which today’s technology and delivery systems are based have begun to erode silos in even the most hidebound organizations.
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