Becoming the Best…again
Achieving performance excellence through strategic culture change
The following case study illustrates how the Nuclear East Nuclear Facility is working to
re-establish itself as the “best nuclear facility in the United States”. It outlines the
importance of strategic culture change and the application of Appreciative Inquiry (AI)
principles in achieving and sustaining performance excellence.
Client Description
Nuclear East is a twenty-five year old nuclear facility located in the northeastern United
States. The plant employs 1200 full-time people and is capable of producing 2350
megawatts of electricity – enough for 2.3 million residential customers. Their asset base
is $ 1.4 billion with annual income of $ 600 million.
Unique Challenge
If any organization needed a bold shift in its performance, it was Nuclear East. For many
years the industry considered Nuclear East a “best in class” facility as assessed by the
rigorous industry evaluation methods of the Institute of Nuclear Power Organizations
(INPO). A decade later, the same assessment showed that Nuclear East had become a
bottom-quartile performer within the industry, uncovering numerous organizational
effectiveness issues that needed resolution. Most significantly, employees at all levels
lacked understanding and alignment to the organization’s overall strategic priorities,
accountability and responsibility for improving the facility’s performance and openness
to feedback and learning. Commented one Vice-President, “we isolated ourselves when
we achieved an INPO 1 rating in 1990 and we stopped improving. At this point we were
really stubborn to change because we still generated electricity and we were profitable.”
Rigorous industry standards, however, had changed and Nuclear East was unable to keep
pace. Consequently, the organization lost its leadership position within the industry.
Client Objectives
Given the need to improve performance, Nuclear East executives engaged TOSAN Inc.,
an organization-consulting firm, to assist Nuclear East management in identifying the
cultural patterns that underpinned the organizational effectiveness issues and architect a
change strategy that would involve employees in revitalizing and implementing a culture
of performance excellence.
The Importance of Strategic Culture Change
Considering organizational culture change as a key strategic imperative of a company’s
success can be a difficult idea to grasp. Yet when performance begins to decline as it did
at Nuclear East, the importance of strategic culture change became a priority in
transforming the organization for lasting and sustainable success. “When the plant started
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up, we were very successful” said one senior manager, “we were focused and
demonstrated a lot of teamwork in achieving our goal of successful start-up. Over time,
we began to lose focus on our objectives. We had no vision. Rather we became a plant
that had achieved a mediocre rating as an effective organization based on heroic efforts of
a few individuals.”
In their 1992 book Corporate Culture and Performance1, Kotter and Haskell write,
“Corporate culture will probably be an even more important factor in determining the
success or failure of firms in the next decade”. At Nuclear East, many of the current
employees had spent their entire careers helping to build the plant into a dominant
industry player. Then like many industry leaders, people within the organization fell prey
to their own success becoming arrogant, insular and overly bureaucratic. As a result, the
organization’s culture, which had once been described as “team focused, family
orientated and having pride in ownership” was now being described as “avoidant, cynical
and full of blame”. For Nuclear East to continually adapt and succeed within a changing
environment, it needed to possess the cultural capacity to evolve and change. The plant
required a change in its culture. But what is organizational culture and how do you
change it?
Application of Appreciative Inquiry (AI) Principles
Constructionist Principle - By definition, organizational culture is the consciously held
notions shared by members that most directly influence their attitudes and behaviors2.
These notions, technically called behavioral norms, describe the behaviors that
employees understand are expected of them to fit in and survive. In order to assess,
measure and develop their culture, Nuclear East completed a comprehensive evaluation
using the Organizational Culture Index3 (OCI). The OCI offered a data-driven approach,
defining the behavioral norms expected within Nuclear East’s current culture in
comparison to those desired within their ideal work culture. Said one executive, “the OCI
(and dialogue that followed) helped us understand where we were, where we wanted to
go and the leadership behaviors we needed to demonstrate in order to move us towards
our desired state…it provided us with the feedback mechanism we needed”. Equipped
with this understanding, the senior management team was able to construct an alternative
view of their organization from a defensive style - avoidant, overly perfectionist and
power-driven to a more constructive style – one that valued and rewarded quality,
achieving goals, respect for people, teamwork and continuous improvement.
Anticipatory Principle - One thing that Nuclear East lacked was a meaningful and
compelling vision for the organization and its employees. To address this, a series of
strategic visioning sessions were conducted involving leaders at all levels of the
organization. The result was a clear focus and direction on becoming “the best nuclear
plant in the United States” with alignment around four strategic priorities - exemplary
safety, operational excellence, excellent financials and exceptional teamwork. In
addition, the slogan “one team, one commitment” emerged as a guideline for how the
management team would work together to accomplish the vision.
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Positive Principle - To achieve a fundamental shift in its culture, senior management
made a significant investment in its leaders. Building Leadership Capacity training
session were designed to meet the needs of management employees with a focus on
changing individual leadership styles, building relationships between managers and
breaking down barriers between departments. This was intended to create a shift in the
culture by engaging a critical mass of leaders in thinking, feeling and acting in ways that
supported movement towards the vision and modeled a more constructive culture. “The
Building Leadership Capacity sessions were watershed events”, stated one participant
“they addressed the cultural aspects and helped us build leadership capacity. They helped
us look in the mirror and assess our leadership performance as individuals and as a team.”
During the sessions, leaders were introduced to Appreciative Inquiry, the benefit of
which has not gone unnoticed. Said one employee, “communication on the part of
management is more positive than in the past. They are providing recognition and that
makes people feel valued as employees. In the past, we dwelled on what we didn’t do
right and there was always cynical and negative responses. With a more positive
orientation, people want to be engaged and help out where they can.”
As the Building Leadership Capacity sessions were underway, a difficult decision had
to be made. In order to gain operational efficiencies, management at Nuclear East
decided to restructure the organization and reduce the workforce by 200 people. It was
during the training sessions that managers talked about how they wanted to implement
this decision in concert with their desire to model the constructive culture. Their greatest
fear was that this decision would reinforce the negative perceptions of an already
disengaged employee body, as well as, sabotage all of their earlier efforts at transforming
the organization’s culture. Using models that depicted the psychological and emotional
responses that people naturally go through when organizational changes are announced,
the management group decided to support employees by openly acknowledging people’s
thoughts and feelings associated with the re-structuring. Managers used Appreciative
Inquiry to empower employees, re-focusing people on what mattered to them and how
they could leverage their strengths to create their most desired future at Nuclear East. In
hindsight the decision to re-structure during the Building Leadership Capacity sessions
was serendipitous. It provided the opportunity for management to demonstrate their
capacity to engage employees and work through the people issues that de-rail so many
organizational re-structuring initiatives.
Outside the training, senior management showed commitment to change by deliberately
modeling the behaviors they wanted other people to do. According to one senior
manager, “In the past, it was our norm to tell people what to do and not exhibit the
behavior. Now, there is more evidence of leaders walking the talk. The key is to be more
visible with employees and engaged in helping them be successful. I now make time
during the week to spend time with each of my groups to see what their issues are and to
remove barriers. I help them prioritize the work and see what I can do to help them be
successful.”
Principle of Simultaneity - One challenge that senior management faced in changing
Nuclear East’s culture was unfreezing the behaviors that employees had learned from
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their past experiences with management. Said one senior manager, “employees suffered
from learned helplessness. People did as they were told and they didn’t do anything that
didn’t begin with senior management.” Rather than reward the “heroic efforts of a few”,
senior management focused on rewarding the behaviors that demonstrated ownership,
shared accountability and exceptional teamwork throughout the organization. Said one
manager, “we needed to institute a cultural change by demonstrating the characteristics of
the culture we want to have…including a much more positive attitude when an issue
arises. In the past we asked, “why things didn’t work and whose fault is it?” Now we ask,
“How can we make this better?” In turn, employees are saying “I can help” and are
taking personal responsibility to get involved.”
A real way that senior management could see and measure organizational effectiveness
was to witness people working across their functional lines during a recently scheduled
outage - a major business event that impacts everyone at the site and costs Nuclear East
several million dollars to complete. A good example of this was the Jet Pump Project.
The plant needed to overhaul all 20 of its jet pumps during the outage, yet doing so
carried risks from a safety and scheduling perspective. Success required employees from
maintenance, engineering and operations department working effectively together as a
team, with front-line employees performing the work and management personnel
providing good communication and clearing roadblocks to performance. In the end, this
initiative proved successful, a first for the industry. When asked about the success, a
member of the Jet Pump Project team offered the following explanation.
“A real shift has occurred in moving from a rule-based to a principle-based work site. For
example, we have a work document to fix a pump that states, “do this, do that”. We
turned it around to a principle-based procedure that states, “you know how to fix it and
here are the parameters”. This shows more respect to the workforce and senior
management made this happen. Even their response to mistakes has changed. In the past,
there was discipline. Now, there are questions about “what happened and how could we
improve?” As a result, the employees are not so reluctant to admit mistakes and they face
up to it. In the process, we get away from rules and put trust in people.”
Improvements in Organizational Effectiveness
The perceptions of managers and employees notwithstanding, the improvements in
organizational effectiveness at Nuclear East can be measured in quantitative results.
These include:
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Recognized improvement by INPO including Conduct of Operations and Work
Standards both of which were rated as an Area of Finding during the 1999 INPO
assessment and subsequently rated as an Area of Strength during the proceeding
2001 assessment.
INPO Index, a cumulative score of key performance indicators, improved
85.9 to 99.9 percent.
Significant decrease in Human Performance Errors from 1.2 to .58 incidents per
10, 000 employee work hours.
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Maintenance backlog reduced from 400 items to 21 items in three years.
Exceeded Outage goals (financial, safety and scheduling) for the first time in
plant history.
Met annual financial budget goals for the first time in plant history.
Conclusion
The purpose of this case study was to illustrate how Nuclear East nuclear facility is
working to re-establish itself as the “best nuclear facility in the US”. It highlights the
importance of strategic culture change and the application of Appreciative Inquiry (AI)
principles. First, leadership was given feedback that influenced their view of the
organization (constructionist). Second, a meaningful and compelling vision was created
for the organization (anticipatory). Third, a critical mass of leaders made a fundamental
shift towards the positive mindset and behaviors that aligned with the vision (positive).
And finally, leaders assisted employees in letting go of a negative past by consistently
inquiring into and reinforcing the attributes of the organization that lead to success
(simultaneity).
References
1
John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York:
Free Press, 1992)
2
Ralph H. Kilmann, Mary J. Saxton, Roy Serpa, and Associates (Eds.), Gaining Control
of the Corporate Culture (San Francisco: Jossey Bass, 1985)
3
Human Synergistics International, 39819 Plymouth Rd C8020, Plymouth MI 481708020
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