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Analysis of regulatory changes brings unexpected long-term benefits for energy firm


In 2018, with Australia’s energy policy at its most volatile point to date, energy generators and retailers were preparing for years of disruption. While this was uniquely driven by a cross-section of global and environmental forces, government policy and price-competitive consumer demand, the organisational impact was similar to that of any other disrupted industry: business leaders must re-think their business and operating models and prepare for technology, system and behavioural change at all levels. Our client, one of Australia’s leading integrated energy companies and retailers, was facing a mandatory rule change meaning energy bids had to be settled at five-minute intervals instead of the current 30 minutes to enable a fairer system across the industry. One of a series of regulatory impacts with more expected in the coming months and years, this change alone would cost all providers at least $250m. Our client, anticipating the need not only to prepare for the settlement change but other imminent regulatory variations, approached Blue Seed to create the structure and discipline to enable a predictable and high-quality organisational change process and outcome.


Blue Seed completed a Change Diagnostic, establishing clear direction, structure and certainty in just a few weeks. During this time our team consulted business leaders, experts and the program team to devise a strategy and recommendations to drive the change process. While to many in the organisation it appeared to be ‘just another regulatory change’, the analysis identified the need for 70 procedure changes and multiple system enhancements and replacements, in addition to behavioural shifts in how many employees apply the procedures for maximum effectiveness. Furthermore, the changes were expected to take more than two years to execute, with variations in the way each milestone had to be delivered in the lead-up to the mandated deadline. This meant disciplined change engagement and governance structures had to be devised to ensure all affected stakeholders were involved and aligned to the plan, to avoid slippage risks. One of the key challenges was how to inspire and engage employees in a program in which the primary driver was regulatory compliance, as the term ‘compliance’ can move people into avoidance mode. Through the consultative diagnostic process, we also identified opportunities to generate additional customer and organisational value and position the changes in a way to drive greater benefits; for example, the change would allow the energy provider to deliver more detailed information to customers and could even lead to savings on their energy bills. The necessary upgrade of systems and process also created a window of opportunity to optimise them for a broader set of processes, not just those that applied to the rule change.


As a result of the Change Diagnostic process, all key stakeholders and program leaders had the same clear understanding of the rule change, why it was important, the potential benefits and their role in delivering it successfully. This alignment put them in a strong position to deliver consistent messages and get the workforce marching in the right direction together, meaning the company could embark on this multi-year journey with confidence and clarity. With an aligned leadership team, a clear change strategy and committed stakeholders, the risk of failure was mitigated and the likelihood of meeting the compliance deadline – and avoiding costly implications of failure – was assured.