Implementing a Culture of Performance Improvement at RPU

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Implementing a Culture of Performance Improvement
at RPU

• Sue Parker, Director Corporate Services
• Rochester Public Utilities

Presentation at the Rochester Area Quality
Council May 5, 2009
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Todays Agenda Topics

• Who we are?
• Timeline
• Our Case for Change
• Business Model and Strategy Development
• Major Initiatives
• Leadership Engagement
• Improvement Framework

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Todays Agenda Topics (contd)

• Management Engagement
• Employee Engagement
• Balanced Scorecard
• Leveraging the Challenging Economic Environment
• Whats Ahead
• Critical Success Factors
• Questions, Comments and Discussion

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RPU Facts Figures

• RPU is a community owned utility serving 47,400
  electric customers and 36,400 water customers
• Annual combined revenue budget for 2009 is 182
  million
• Largest single expense for the electric utility
  is purchased power from SMMPA of about 90
  million
• RPU supports City operations by contributing
  about 9 million a year in lieu of tax payments
• Our water utility reliability was increased due
  to adding 1 million gallons (8) to our storage
  capacity
• Our electric utility reliability achieved an
  eight year high in 2008 with a reliability index
  of 99.99

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Timeline

• Late 90s Deregulation a possibility in
  Minnesota
• 2004 Initial case for change
• 2005 Refocused business model and strategy
• 2007 CCS implementation and process improvement
• 2007 Vision and core values
• 2008 Shift from projects to continuous
  improvement
• 2008 Developed improvement framework
• 2009 Scorecard and goal setting
• 2009 Leveraging challenging economy
• 2009 Employee improvement training
• 2010 Business Unit and Departmental Scorecards

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Case for Change

• Deregulation in late 1990s
• Threat of being sold to private investors
• Need for focus

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Business Model and Strategy Development

• Mission
• We serve our customers by providing the highest
  quality services and products. Our experience
  and resources are used to enrich peoples lives,
  help business prosper and promote the community
  welfare.
• Business Model
• Customer Focus Model
• Five Strategies
• Culture of Customer Focus, Financial Management,
  Organizational Structure, Business Information,
  Infrastructure

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VISION We will set the standard for service.
CORE VALUES Safety Integrity Service
Stewardship Accountability Skill
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Major Initiatives

• CCS Implementation driven by customer centric
  business model
• Realigned the organization
• Introduced process thinking
• Targeted process improvement initiatives

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Leadership Engagement

• Challenge for leadership
• Shift from project driven opportunistic
  improvement to strategic improvement
• Implement a culture of continuous improvement
  where every employee is focused on improvement
  every day
• Engage managers and involve employees
• Avoid flavor of the month
• Keep it connected, dont change the main message

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Improvement Framework
Vision Strategy
Improve Performance to achieve Vision
Develop Core Values Objectives Aligned With
Vision
Develop Scorecard Measures Aligned with Core
Values
Identify Areas of Improvement
Measure Performance against the Goals
Set Goals for Each Measure
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Management Engagement

• Engaged managers to develop the scorecard and the
  measures
• Conducted multiple facilitated sessions with the
  RPU wide Management Team
• Management Team owned the organizational
  scorecard
• As a result, the scorecard already had enterprise
  wide support

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Employee Engagement

• Designed cascading communication
• Starting from the top every person with direct
  reports held a team meeting to discuss the
  scorecard first Directors, then Managers,
  Supervisors finally Team Leads
• Communication came from the immediate supervisor
• Everyone used a common set of materials and
  format

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Employee Engagement (contd)

• Scorecard was discussed every measure explained
• Discussions were encouraged Feedback was noted
• Why implement a scorecard?
• How is this aligned with our core values?
• What actions impact each of the measures?
• How can this team improve the measures?

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Organizational Scorecard

• Strategy driven, mission aligned and a reflection
  of our core values
• Not just financials balances our priorities
  among all our core values
• Stronger in common purpose - aligns all
  departments towards common goals
• Encourages everyone to be part of the solution

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• Financial
• Gross Margin
• Controllable Costs
• Operational
• Average Interruption Duration Index
• Plants Capacity Factor
• Employee
• Recordable Incident Ratio
• Customer
• American Customer Satisfaction Index
• Stewardship
• CO2 Reduction

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Leveraging the Urgency of the External
Environment

• Making the scorecard real by setting 2009 goals
  for each measure
• Analyzing, rationalizing and reprioritizing
  projects and spending to meet those goals
• Re-forecasting 2009 and 2010
• Involving employees to lead improvement
  initiatives Million Dollar Challenge!

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Million Dollar Challenge

• Encourages employees to submit their improvement
  ideas and measurable impact
• Managers work with employees to develop an
  implementation plan
• Employees become part of the solution
• Encourage not to settle for we have always
  done it this way

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Million Dollar Challenge (contd)

• Ideas are not just cost reduction but improvement
  in any of the measures
• By improving the non-financial measures like
  safety, capacity factor and RAIDI employees
  directly and indirectly impact financials
• By improving the non-financial measures the
  cost savings become permanent

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Whats Ahead

• Improvement training for the managers and
  employees
• Providing an improvement tool kit
• Lean six sigma
• Kaizen events
• Facilitation
• Project management

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Whats Ahead (contd)

• Celebrating the Wins
• Sharing the early wins and success stories
• Recognizing the early adopters
• Make the scorecard visible everywhere
• Communicate progress against the scorecard goals
  post the results
• Communicate progress on Million Dollar Challenge
  post the progress
• Employee contest and improvement showcase

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Whats Ahead (contd)

• Developing next level - business unit and
  departmental - scorecards
• Internalizing the scorecards and making them part
  of the planning process
• In addition to the departmental budgets develop
  an annual improvement portfolio aligned with
  departmental scorecards

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Critical Success Factors

• Establishing a Case for Change for the Leadership
• Behind the Scenes Leadership Engagement
• Making it Middle Out Engaging Managers
• Mindful Employee Engagement
• Connecting it All - Not Changing the Main Message
• Leveraging the urgency of external economic
  environment
• Constant and consistent messaging

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Implementing a Culture of Performance Improvement
at RPU

• Questions, Comments and Discussion