Don’t think succession planning is important? One of the biggest challenges gas, electric, and water utilities are facing is an aging workforce, and the projections are absolutely staggering. Within the next two decades, over 70 million baby boomers will reach retirement age, a fact that is even more sobering when you consider that utilities tend to have a higher proportion of workers eligible for retirement compared to the average across all industries.
This impending body and brain drain is a threat, because it will likely lead to the loss of critical organizational knowledge which in turn could screw up service delivery, reliability and emergency restoration times or ETRs. This is especially true for electric utilities, as the employees that manage storm response are often the ones who’ve been around the longest.
Simply put, we’re in the midst of an unprecedented demographic shift that will cause a rapid evolution in the makeup of the average utility workforce. Is the average age of your company’s workforce 45 years or older? Does everyone in the storm room know the first names of each other’s grandchildren? If so, it’s probably a good time to update your succession plan.
What Makes Good Succession Planning?
Solid succession planning for emergency preparedness relies on four critical success factors.
First, you need a written plan, understood by all key stakeholders, that encompasses recruitment and retention, leadership development, and competency mapping. Part of the written plan should focus on disaster recovery and include the identification and recruitment of utility employees filling second roles during “all hands on deck” emergency situations.
Second, there must be a solid understanding of the attributes of success, and an understanding of the critical skills likely to be lost in the next 5 years. These attributes could include the ability to make decisions on the fly, the ability to interact with internal and external stakeholders, a willingness to follow procedures and protocols, and the ability to supervise and lead others.
Third, a suitable replacement candidate pool needs to be developed – both for primary employees and those with second roles during restoration events.
Finally, you need a formalized process to document and transfer institutional knowledge from one generation of employee to another. This might include things like information about threats, hazards and protective actions; communication protocols; mutual assistance procedures; evacuation, shelter, and accountability procedures; location and use of common emergency equipment; and emergency shutdown procedures.
How to Develop a Solid Succession Plan
In general, there are four steps to creating a best-in-class succession plan.
1. Identification & Competency Mapping
Identify your key positions and their key competencies. For example, the “storm boss” should score high in terms of depth and breadth of knowledge as well as leadership skills, the head of Logistics should score high in terms of analysis, coordination and interpersonal communication, and an Operations supervisor should score high in terms of “nuts and bolts” technical knowledge of internal processes and systems.
Clearly defining roles and competencies helps identify strengths that already exist “in house,” and also helps ease external recruitment efforts, both of which helps ensure stability in terms of emergency preparedness. The process is typically done using a combination of employee focus groups, employee surveys, brainstorming sessions and facilitated internal workshops to review findings and recommendations and develop an action plan.
Once the relevant roles and competencies have been defined, the next step is to conduct an assessment of the skills, goals and career objectives of employees who could potentially fill these roles. This assessment should also encompass the development of a list of potential utility retirees over the next five years (along with their key competencies). This helps to prioritize succession efforts to maximize the stability of the organization’s emergency preparedness.
A secondary function of this step is to assess the overall business, its turnover rate, and the current processes to retain employees and pass down organizational, functional, and emergency response knowledge to new employees. This often leads to the identification of process-oriented shortcomings that can be targeted for improvement
To borrow a sports analogy, succession planning is all about developing your organization’s “bench strength.” It involves the implementation of plans for training and developing those employees identified during the assessment phase so that a pipeline exists to backfill retiring talent. This is extremely important in the context of emergency planning because many utilities are reluctant to place their trust in newer or less experienced employees when it comes to emergency restoration, and having a pipeline of highly developed successors can help alleviate this reluctance and ease the influx of new talent into the storm room.
In terms of emergency response, in addition to formalized training curriculums and exercises, another popular development tactic is to invite the selected, less experienced people into the storm room – it’s a great opportunity to mentor tomorrow’s storm bosses. Retirees can play an important role here by working side-by-side with their replacements to provide coaching and training and allow for the sufficient transfer of knowledge.
Another tactic that is growing in popularity is the utilization of “boot camps.” For example, the Office of Water Resources at the Rhode Island Department of Environmental Management uses boot camps to provide training in the technical skills needed to run a plant, but more importantly, they seek to help operators develop the confidence and professional savvy to do such things as work with a town council, talk to reporters, and engage ratepayers directly.
Offering opportunities for training and growth won’t be effective unless employees know they exist. This is especially important in the context of second roles for emergency restoration, as these assignments are often viewed by employees as opportunities to learn and expand their scope of responsibility. It is also critical to maintain an open line of communication with employees so that plans can be adapted to respond to the changing needs of the organization.
In order to ensure stability and the ongoing optimization of emergency preparedness, utilities must have organizational continuity. The upcoming Baby Boomer exodus makes this an extremely challenging proposition, which is why effective succession planning is critical.
This boils down to identifying and understanding what the company’s most important needs are, taking action to develop key talent from within, and engaging in effective communication. Without a well-thought-out succession plan, utilities are opening themselves up to emergency restoration delays and increased regulatory scrutiny. Don’t risk it – take action today.
For more detail, please check out PWCs succession planning whitepaper.