Keeping the lights on

19 Aug 2013

Steve Holliday, CEO of National Grid Group, discusses the challenges faced by a global electric utility company, in an era of growing pressure to move towards alternative energy sources

Q. How adaptable would your organisation be if a shock hit in the centre of your activity? And at the board level, do you plan for such shocks? We have a very particular role in the UK because we sit at the heart of the electricity and gas market. So we model an enormous number of scenarios to try and think about potential shocks.

Of course, a number of these scenarios get close to Armageddon, but none of them would cover something like Fukushima, where you decide to shut down all of the nuclear plants. You can’t handle that in the UK. So you think about these scenarios, across different timescales. How can we be sure that we’ve got reliable energy supplies and how do we make sure our investments are robust against a range of scenarios? That’s exactly the way we think about our business.

Q. How would you assess your organisation’s ability to adapt to change and disruptive events generally, compared to the past? It’s been a huge challenge to get an industry – that by definition is thinking 20 or 30 years ahead, is associated with slow thinking and has historically liked to have a plan – to change into an industry that thinks much more flexibly, much more about scenarios and how to adapt to warning signs of change in those scenarios.

So there is a speed of thought process, a speed of decision-making that is different today than in the past. Are we where we need to be yet? No, and stakeholders would not yet describe us as agile. We’ve got a long way to go.

Q. How much is the influence of stakeholders, and the level of engagement with them, growing in your business? The regulator and government have always been major stakeholders, but today there is a very new set – right down to you and me. The public is a large stakeholder because they can take part in discussions on social media.

They can influence our decisions and we actually want them to do that. Part of our challenge has been to make sure that we are genuinely consulting – to build a process that goes out and listens.

The most interesting part of that journey has been that as we’ve listened, surprise surprise, we’ve actually learnt something. So we’ve not ended up getting to the answer we thought of when we started.

Q. How have you increased your impact on your new stakeholders and their communities? What benefits has that impact had for your organisation?One of the challenges I’ve been focused on for the last few years is how we bring the benefits of scale to customers and yet be seen really as being local. National Grid is made up of many companies that have come together through acquisition to be the organisation it is today. What that led to though, was a real view from many customers about the loss of their local company at a time when everyone wants to get much more involved in decision-making on a local basis.

So achieving this balance, bringing the benefits of international scale and yet going back almost 40 years to considering how to connect to your “local communities is difficult for an industry like ours”.