Background

Cadent Gas traces its roots back 200 years to the start of the gas industry in the United Kingdom.  In 2017 Cadent was officially created when the UK’s National Grid sold its gas distribution business, as part of the de-regulation of the energy industry in the United Kingdom.

Cadent has over 4,000 employees and brings gas to 11 million homes and businesses throughout the United Kingdom.  Their gas network covers the North West, West Midlands, East Midlands, South Yorkshire, East of England, and North London.

In addition, Cadent manages the National Gas Emergency Service on behalf of the gas industry and provides an emergency response service to people who suspect they have a gas leak.

Challenges and Opportunities

Shortly after assuming ownership of the UKs largest gas network (2016) Cadent realised that they were failing to meet productivity and cost reduction targets. They were persistently ranking in the bottom third on the Regulator’s key performance measures which was damaging their brand reputation. Without immediate redress the implications for the business, the shareholders and the leadership team were of paramount concern.

Cadent leadership diagnosed that the root cause of their underperformance was the highly centralised operating model inherited from National Grid. The model had become embedded in the culture of the organisation and resulted in ineffective work allocation systems, uncollaborative silos and working methods that undermined cross-team collaboration, damaged staff morale and productivity, and produced wastes.

Cadent attempted to solve the problem by transitioning operational responsibility from the centre to depots. By late 2018 and despite significant investment in leadership skills development, the transformation programme was seen as a failure and Cadent was faced with an additional crisis of plummeting morale.

VISION APPROACH

VISION Consulting Group is a company that drives increased productivity and financial benefits through cultural transformation. VISION was contracted in 2019 to help reverse the negative impacts that were firstly inherited and then accentuated by the operational transformation initiative.

VISION’s insight was to recognise that fundamental to any improvement was replacing a culture of fearful resignation with one of entrepreneurial hope amongst leadership and employees so that they believed that could work more efficiently and effectively and that would positively impact on customer satisfaction.

Along with forward-thinking colleagues at Cadent, we created and embedded a new culture of collaboration and trust. This culture was characterised by the breaking down of silos to build one team at depot level. It bought together Repair, Emergency and Planning in a new relationship of professional respect and pride in their collective work.

Key Members of the VISION team:

VISION’s delivery approach is methodical and underpinned with a clear goal, in this case to demonstrate a sustainable operational transformation by achieving an increase of 20% in Repair Crew productivity by March 2020 (14 months) and deliver a recurring cost saving of at least £10m per annum.

Root Cause Analysis, Diagnosis, and Recommendations

Over four weeks the VISION team’s investigations revealed that previous initiatives failed because Cadent was unable to mobilise the new ways of working fast enough to produce real productivity improvements. For Cadent to realise its goals, the transformation to sustainable productive improvements necessitated that the depot manager adopts an entrepreneurial mindset and run the depot as they would their own business.

With this insight VISION designed the transformation programme to meet the goals by overcoming the deep feelings of resignation in the workforce and instilling a growth mindset in depot managers.

Signature Practices

VISION’s engagement began with a high-level design of ‘signature practices’, including Commitment-based Management ™ (CbM), Rolling Planning, Make Work Ready, and promise-based Operational Reviews. A selection of these signature practices is briefly described, below:

Commitment-based Management ™: Commitment-based Management (CbM) is the most successful management discipline to emerge in the last four decades. CbM puts accountability and coordination at the centre of producing results. It has been profiled in the Wall Street Journal and MIT Sloan Management Review among other periodicals and is currently taught in the London Business School.

Rolling Planning:  This is a collaborative-planning practice introduced by Lean that is designed to dissolve the tensions that arise when top-down planning encounters the actual day-to-day circumstances on the ground.  In Cadent VISION implemented a weekly Rolling Planning practice between the central Planning Team (who had a long-term view of what was required by the regulator) and the Repair Team which got work done, often in the face of unexpected storms, resource constraints, and other issues such as lack of site access.

Make Work Ready:  This is a dependent activity/critical path collaborative resolution practice where the teams responsible for future work come together to identify the blockers and constraints that must be addressed so that the Rolling Plan can be executed with a minimum of interruptions.

Blue Book:  VISION documented these, and all other practices in a Blue Book that is customised to the change programme and provides a basis for training programmes, and knowledge-transfer activities.

Customising Signature Practices for Cadent

To ensure VISION Signature Practices were adopted promptly by Cadent, the VISION team ran a series of collaborative workshops to customise the practices and ensure they were a right match for Cadent.  Working through these workshops we deepened and broadened the Signature Practice framework, adjusting the management practices so that depot managers could observe, direct and coach the new behaviours in response to new measures, which, in this case, were for creating a customer-oriented, depot-centric organisation.

VISION recognised that new collaborative relationships were needed between the Repair Team, the Emergency Response Team, and the central Planning Team to tap into and share the wealth of expertise and ideas within these groups. The VISION team set up the cross-functional design meetings to bring together these departments to raise concerns, share ideas and ultimately come up with solutions to be tried and tested in the field.

From the investigative work carried out by VISION resolvers (see note on VISION Team, above) and the output of these sessions, VISION developed new practices and processes that had the potential to deliver the 20% productivity improvements and raise morale. These involved new handover practices between Emergency and Repair Engineers and developing the Make Work Ready ethos called for by lean planning principles.

Pilot Programme to Overcome Resistance (Duration: February 2019 – August 2019)

1.      Practice Selection: VISION instigated a pilot programme with the aim of overcoming the deep feelings of resignation in the workforce from past failed initiatives and to gain the support necessary to make this one a success. VISION selected four signature practices to design and test through the pilot (Daily Huddle, Weekly Operational Review, Design Planning Meeting and Three-week Rolling Planning, which would be rolled out to 10 depots). They also designed the ‘Entrepreneurial Engineer’ role to implement the practices.

2.      Practice Rollout: These four Signature Practices, along with the new handover practices between Emergency and Repair crews, would form the backbone of the rollout across multiple depots. A small VISION crew of coaches, resolvers and mobilisers worked alongside each depot team, including their planners, to roll out these practices and tailor them to suit their individual needs. VISION undertook 12-week pilot project to test practices in Leicester before rolling out in phase 1 to Woodford and Hollinwood depots.

3.      This collaborative style of rollout enabled all teams to align themselves to a set of simple practices and goals.

4.      Leadership development: VISION worked intensively, through workshops, one-to-one coaching, and meeting support, with the leadership team (network directors, network managers and network engineers) to instil a Commitment-based Management ™ (CbM) way of working, along with related practices and behaviours, which were well-suited for leading and managing in a depot-focused company with customer centricity and entrepreneurial employees.

Learnings from the Pilot

The pilot introduced more efficient processes across all types of repairs and pressure problems and established the new behaviours and collaborative relationships necessary to support the new processes and gain commitment of the Cadent planning teams and engineers. 

A key finding was that the productivity of the engineers was primarily controlled by the volume and quality of the work packages they were give. Poor quality work packages resulted in wasteful repeat work. VISION adapted the Make Work Ready Signature Practice (see description, earlier) to address delays and poor quality and ensuring that the engineers were presented with all the information they needed to succeed in completing the job, right first-time.

The introduction of Last Planner ™ (see description, earlier) principles enabled planners to work directly with the engineers to design how work would be done, and then get reliable commitments to the plan. As a result of this collaborative planning approach the engineers took more ownership in delivering the work. Based on the planning, VISION could make visible the extra work that engineers could bring forward, last minute when there were delays elsewhere that freed up a field team that would – otherwise – have no work to complete.

The principles of Commitment-Based Management ™ (CbM) brought more rigour to rolling planning; the team ensured the plan was filled to capacity and locked down one week before work actually started, which reduced last minute delays and changes.  With three-week rolling planning, jobs were continuously scheduled into future weeks and goals agreed between engineers and planners.

VISION developed the Blue Book that laid out and described the new practices, and also provided a road map showing how the three-week rolling planning practice would be improved over time through the introduction of additional Lean principles.

The pilot succeeded in replacing the culture of fearful resignation with one of entrepreneurial hope characterised by customer-centric decision making at the depot level.

Rollout to the Wider Cadent Group (Duration: September 2019 – March 2020)

After demonstrating the productivity increase and culture change within the pilot we rolled out to a further 10 depots in two networks. We fully established the Entrepreneurial Engineer role and Commitment-based Management ™ (CbM) development for network managers and through knowledge transfer and mentoring established an internal Cadent mobiliser training and coaching function so that the transformation would be sustaining.

OUTCOMES

While the immediate success of the transformation in terms of productivity and customer satisfaction improvements was very welcome, the greater impact was establishing a sustaining entrepreneurial mindset and transformation culture within Cadent so that future challenges could more easily be met, and opportunities could be exploited. 

ACCOUNT AND CONTRACT MANAGEMENT

VISION’s account and contract management approach takes from the best practices for our industry and customises them with our unique Commitment-based Management ™.

For this Cadent project key elements of our approach were as follows:

●       Appoint a director from within VISION’s firm to lead the assignment and to hold ultimate responsibility for the quality of the deliverables.

●       Appoint an experienced manager to take day-to-day responsibility for the operational aspects of the project and to ensure that all KPIs were defined, accepted, and delivered.

●       Hold regular meetings between senior members of VISION’s team and the steering group appointed by Cadent, to ensure that all aspects of the transformation project were running smoothly.

●       Encourage significant stakeholder engagement including individual meetings with all staff members and depot managers to understand structures, processes, roles, responsibilities, and workloads.

●       Encourage regular Input from the senior management team through workshops on the gap analysis and development of the future structures.

●       Conduct regular internal team meetings to share notes, discuss, and mitigate emerging issues, and collaboratively progress the project towards the desired outcomes.

PROJECT PERFORMANCE

Through this project, VISION helped Cadent’s leadership validate, shape, and then evolve their business strategy. VISION’s innovative approach to culture change using Commitment-based Management ™ and the VISION rolling planning techniques provided the structure to move quickly to a depot-centric model, produce measurable productivity improvements (as evidence by the increase of average productivity from one job per day, to two jobs per day) and supported the development of entrepreneurial skills within Cadent.

All aspects of VISION’s contract and delivery approach were highly effective and all KPIs were either met or exceeded to the satisfaction of the client. The transformation programme was of critical importance given past failures, board pressure and the pressures on Regulatory KPI performance. There was a need for the change programme to commence immediately.

VISION expertise and experience delivered value to Cadent as follows: