A Utility Transforms Its Operations and Culture

BCG worked with a large international energy utility to overhaul its core business and culture, resulting in substantial gains in operating efficiency and overall business performance.

Against the backdrop of an increasingly challenging competitive environment, a large international energy utility sought to upgrade the efficiency of its operations. Simultaneously, it wanted to create a more performance-oriented culture, one that would drive and support ongoing performance gains across all aspects of the business, including financial results and customer service levels.

Working with BCG, the utility designed a lean-based transformation program targeting all aspects of the value chain, from surface mining to the production and distribution of power. The program covered both production and service functions. To ensure that any performance gains would be sustainable, we made sure the program also included employee training, organizational changes, and customized process design.

A Three-Pronged Approach to Cultural Change

We launched a cultural transformation program designed to instill a culture of continuous improvement across the organization. The program was three-pronged, targeting operational excellence, end-to-end processes, and leadership, from the business management to operational level. The operational excellence work was aimed at increasing productivity and service quality on a team level, while the end-to-end process work was designed to improve process efficiency. The leadership work was oriented toward building internal experts and engaging company leadership, both critical to optimally communicating the program’s targeted messaging and values as well as effectively driving the program.

Implementation of these efforts had a sizable impact on the company’s business and financial performance. Results for individual divisions included an improvement in annual gross operating cash flow of approximately €25 million; an increase in the efficiency of end-to-end processes of 35%; and an improvement in workplace efficiency of 20%.