Managing Partner and Co-Founder, Propeller
With technological, regulatory and market shifts driving continued change across the global generation industry, a strong sense of purpose has never been more important.
GE has one, with a values-based program targeted at increased employee compliance. Outside the industry, Zappos is another example: The online retailer is well known for the 10 values it crafted around its company culture.
Where the generation industry can reap the largest benefits, however, is not in aligning values to employees or to its organizational culture. In an industry increasingly driven by consumer wants, leaders who are able to leverage a values-based strategy closely aligned to the customer and industry trends will be able to generate economic success—and also help a graying workforce adapt to the changes transforming employees’ day-to-day work.
What does this look like in practice? Simply put, values are the fundamental beliefs held by an organization. A shared value approach reconnects company success with social progress. It can help guide goals and set standards for behavior—what’s right and wrong for your organization to do.
We’re already seeing industry decisions being driven by consumer desire for more renewable generation and changing cost structures. New technologies such as smart grid, demand response and smart meters are changing how consumers interact with utilities and will better align with their desire to minimize their environmental impact.
Studies back up the link between values and performance. The authors of “Built to Last: Successful Habits of Visionary Companies” demonstrate that companies with a strong, values-driven culture outperform the general stock market by a factor of 15. As Michael Porter and Mark Kramer wrote in Harvard Business Review, “shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.”
Research also shows inspired employees are almost three times more productive than dissatisfied employees—and that’s a critical metric in an industry faced with retraining a graying workforce a few short years before retirement.
Is your organization ready to move toward a values-based strategy? A few steps can guide your journey.
- Define your values. What are the industry trends most affecting your organization, and what are your customers’ wants and beliefs? Be explicit and specific about what you believe those values to be.
- Conduct an internal assessment to measure how well those values are already integrated into strategy. It could take the form of a survey or metrics gauging progress toward specific goals, for example.
- Update your values if needed. For an effective values-based strategy, shared values should be incorporated into the core of your business. At Duke Energy, the customer is first and foremost in its mission: “…We make people’s lives better….” And ENGIE has a “new vision of energy for the world: sustainable energy available to everyone.”
- Identify the areas your business is challenged to meet these changes – both now and in the future. Consider one significant industry change – the rise of the prosumer. As new technology is developed to allow larger volumes of distributed solar-generated energy to be utilized efficiently onto the grid, what changes to people and processes will be required? If your core values include driving the growth of renewable clean energy, how do you see your role in this shift? With the growth of prosumers, new operational challenges arise, and visibility and management control become an increasingly important concern for utilities. Rather than viewing prosumers as disruptive, utility leaders are recognizing the potential for new revenue streams.
- Integrate your values into the company culture and practices. How do you live and breathe your organization’s values? How do you measure them? Duke Energy issues an annual sustainability report tracking its progress against goals that include reducing carbon oxide emissions 40 percent from 2005 levels by 2030.
- Find ways to leverage those values to drive change moving forward. One of the most powerful effects of a values-based strategy is its ability to enable large organizations to react as quickly as small ones. It can increase resiliency and offer a competitive edge.
A values-based strategy also enables your teams to work together toward a common goal – the values upon which your strategy is based—and can help overcome resistance to change. Focus on the people who are likely to be in the best position to make change—leaders and key change agents like union leaders and older workers, who can leverage not only their experience in the industry but also their tacit knowledge of organizational politics. These older workers are often overlooked in change initiatives due to a false stereotype that they are resistant to change, but alignment around a values-based strategy can turn them into evangelists for your goal.
Effectively instituting a values-based strategy requires not only being clear about your values as a company, and how they relate to your future growth, but also having those values align with consumers’ motivations. Aligning your organization’s values and strategies to customer values will help you drive economic success while also enabling you to help your workforce more easily adapt to the inevitable changes to global generation.
—Jeff Foley brings more than 20 years of experience in consulting and business implementation to his role as managing partner of Propeller, a Portland, Oregon, and San Francisco, California-based management consulting firm he co-founded. He is passionate about solving problems and helping people succeed.