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Change Management Theory

When the Costa Concordia cruise ship sank, people wondered how it could have happened. The captain had navigated the course many times. It was a small change in his direction that sank the ship.

Changes, even small ones, can be difficult. The transformation of the electric grid now underway is a huge change, and industry leaders are being challenged to manage this change.

Technology Change: Smart Meter Health Concerns

Highly vocal customers are raising fear, uncertainty and doubt about health and privacy concerns of smart meters. Sound science and facts reinforce that these issues are not true. However, some utilities are spending time and energy to develop opt-out policies and gain approval from regulators for these policies.

Other utilities haven't had that level of outcry. These utilities appear to have done more in the way of change management. They've communicated early and often with community leaders and their customers about the new meter's purpose and the implementation process. They've enlisted employees as “smart meter ambassadors” and informed them throughout the smart meter implementation process, from pilot to rollout, so they can address questions and concerns from their friends and neighbors (aka customers). Arming them with the knowledge of health and privacy concerns as well as customer benefits makes the employees an important part of the customer education process and enables a less contentious deployment.

Communicate Most When Customers Are Most Concerned

A major driver of customer satisfaction is the level and accuracy of communication a utility has with customers during an outage. North American utility customers enjoy such high levels of reliability that tolerance for lengthy outages is low even during major weather events. Customers expect the utility to inform them of when power will be restored and provide updates on a frequent basis. Utilities that are able to perform well in this area haven't experienced the decreases in customer satisfaction compared to those that perform poorly.

Smart meter deployments also bring change to outage reporting and communication. Real-time data allows operations to know when a customer's electricity is out without waiting for the phone call. Distribution automation provides greater remote restoration capabilities. These advances will enhance restoration capabilities and change how line crews and dispatchers do their jobs. Equipping employees with new skills in analyzing this data and communicating the positive impacts of these improvements to customers will help employees accept these change more readily.

A November 2011 Navigant Consulting customer survey indicated that 56% of utility customers trust their local electric utility (rated 8, 9 or 10 on a 10-point scale) and that 87% would be likely or very likely to share news of their electric utility's discount or program that was found useful or attractive.

Strategic Change: Ratepayers to Partners

Customer's expectations of their utility are changing. This includes new rate offerings promised as a benefit from smart meter implementations once customers have real-time data and control.

Utilities with employees who can develop partnering relationships are seeing higher uptake in enrollment rates. This is accomplished through increased training of customer service representatives (CSRs) on rates, energy-efficiency models, home devices and sales techniques. For some utilities, in-house programs are being introduced to develop the CSRs into energy advisors; others are opting for third-party partners with these skills. Utility marketing organizations are segmenting the customer base to provide tailored offerings. Bringing together these customer service, marketing and communications efforts aimed at changing customer behavior and meeting customer expectations pose a challenge to utilities to manage this organizational convergence and implement in a cost-effective manner.

Even more essential, and expensive, is improving the foundational base of customer education about the benefits and value of grid upgrades.

This journey of change in our industry is like turning an ocean liner. We can see many of the issues, see the obstacles ahead and act upon them with solid change management strategies aimed at customers and employees. It may take many years to transform both the grid and our customer relationships, but I believe most customers will continue to trust the industry to move cautiously, and not quickly. We'd rather be the slow turning, steady ocean liner than the “look at me” Costa Concordia, right?

Ellen Krohne is a leading organizational change management expert and former utility industry customer service executive. She is currently a director at Navigant Consulting, and she co-manages the Navigant Utility Forum.

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