FRANKLYWNOW - Utility Strives to Create a New Corporate Culture

Utility Strives to Create a New Corporate Culture

In a move to rally its employees and reassure its investors, Allegheny Energy launched a new corporate culture, its "High Performance Organization," last June. "When (President, Chair and CEO) Paul Evanson came here, he decided that one of the things he was going to do was to take AE to the top in things like customer satisfaction," said spokesman Fred Solomon. Customer satisfaction is just one measure on the company's balanced scorecard. Using the scorecard, the company measures its performance against industry benchmarks in six areas, aiming at top-quartile performance in all six by 2007. Allegheny slipped below the top quartile in customer satisfaction in the J.D. Power index for residential customers for the first time last year, but intends to bring its rating right back up. "By 2007, we want there to be no question about where we stand," Solomon said. A second area on the scorecard is operational excellence. On the generation side, Solomon said, AE aims to improve its coal plant availability from somewhere in the mid-70 percent range now to 91 percent. On the delivery side, the aim is to cut outages almost in half, from 304 minutes to 172 minutes per year. Third is financial performance. The company wants to return to an investment grade rating of BBB- by 2007. In fact, it recently achieved two steps up: a B+ rating from Standard & Poor's and an even higher BB- from Moody's Investor Services, both in February. Fourth, the company seeks to better engage its work force, as measured through safety. "We're taking steps to reduce our reportable incident rate," Solomon said. "Fewer accidents, whether on power lines or in generating facilities." A fifth measure is better environmental stewardship through reduced pollution emissions. The company is taking measures to finance scrubbers at its two unscrubbed supercritical plants, Fort Martin and Hatfield's Ferry, to reduce sulfur dioxide emissions by 90 to 95 percent. And the sixth and final measure is the bottom line: shareholder value. Use of the scorecard encourages an eyes-open approach to management, what Solomon calls a "fact-based management culture": eliminating guesswork by looking at numbers and facts. It also encourages a culture of learning, he said. "We want to make sure people aren't in silos. When someone discovers a better way of doing things, then we translate it across the company." Evanson said the company created its own scorecard. "This is what we needed at this company at this time: a series of measures, some of which are more necessary to Allegheny, others of which are general industry standards," he said. "When we benchmarked the company on these various measures, we were about average," he admitted, but he said he's seen progress already. "I'm excited about it, and the employees have really embraced it."

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    Wednesday, February 12 2020 6:45 AM EST2020-02-12 11:45:23 GMT
    Wednesday, February 12 2020 6:47 AM EST2020-02-12 11:47:29 GMT
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