The complexity of maintaining the country’s electrical grid in case of a disaster is humongous and the Department of Energy has identified it as a major risk and has challenged the industry to come up with solutions. The industry has been trying a number of different approaches but at it’s simplest, the issue is that keeping a reserve of large highly technical equipment is very expensive for each utility to do it on it’s own and the lead time (9 months) is a major constraint.
We were recently involved in an engagement to help tackle this issue and while exhilarating given the scope of the transaction, it was also one of the most challenging engagements because we failed to convince the client that there were significant Change Management issues that had to be dealt with – not that we didn’t try very hard.
The concept was simple – get a number of utilities to pool their risk to procure and maintain a set of spare highly technical equipment to serve as safety stock. Sounds very simple – right? Wrong! Imagine all the change management issues you have faced just dealing with internal stakeholders and now multiply it geometrically. And by the way – none of it is a surprise. If you have ever been involved in any kind of consortium buying effort, you know exactly what I’m talking about. The size of this transaction was mind boggling – dozens of pieces of equipment at a total deal value of over $250 million(approximations). The supply market had never heard of a transaction this size and it shook up the global supply base. However, the challenges were not all with the supply market – they were rooted in getting alignment with all the stakeholders.
Each utility has very strong engineering departments and if there is one thing engineers are very proud and protective of, it’s their product designs. This is true in any industry – it’s in the DNA of the engineering profession 😊. Now imagine getting each engineering group from each utility to agree on a common set of specifications for the equipment they need – a herculean task. The issues that we faced were all Predictable and Inevitable (TMG alumni will remember the megaphone slide when they hear those two words 😊). Yet we failed to convince our stakeholders that decision making and getting alignment were major challenges that we should address early on because otherwise, they would come back and bite us and cause all kinds of delays later on.
By the way, this situation was not unique to this engagement – we run into this all the time. It is probably the hardest part of any engagement for us. Convincing the client that the issues and challenges we are going to face are all Predictable and Inevitable and therefore, we ought to deal with them at the time of the launch of the initiative – not when they occur. Some clients are better than others but almost all underestimate Change Management challenges. They seem to think that they are unique and won’t have the issues that we run into at other clients. They seem to think that they can deal with them on the fly when they occur. They seem to think that the impact will not be as sever as we tell them it will be.
Change Management is not that complicated or hard to deal with, as long as you acknowledge it and put in the effort early in the process. It is when we underestimate the issues and challenges related to Change Management that we end up with major problems.