- To develop a strong pool of internal leadership within the company with the leadership knowledge and skills to lead future growth and ease succession
RESULTS
- Most of the senior leadership and high-potential executives of ScottishPower have participated in one or both programs.
Why is ScottishPower so passionate about building its management bench strength? After all, shouldn't one of the world's largest utility companies be more concerned with generating plants and transmission lines than "softer" issues such as educating executives? The company recognized that its continued rapid growth and performance will be driven by the strategic thinking, leadership, and competencies of its leaders. To continue the company's growth, it needs a strong gene pool of corporate DNA.
"In the last decade, we have grown quite rapidly," said Sandy Begbie, Director, Group Leadership Development & Reward at ScottishPower. Through a series of acquisitions, the company expanded from a regional electric company in Scotland to an international enterprise with companies in the United Kingdom and the United States, including Pacificorp, now the fourth largest US utility company. "Strategically, we as a company have ambitions to continue to grow" Begbie said. "We need a well-defined culture and well-defined set of leadership behaviors. Having the bench strength of senior and high-potential managers has a powerful impact in retaining the fabric of the organization as we grow."
The company has a philosophy of promoting from within — with a 5:1 ratio of internal promotions versus external hires — so it needs to be sure it has good candidates in the pipeline. This focus on internal career tracks is partly a result of the difficulty of attracting good external candidates in the US, where utilities have traditionally been seen "as less exciting than other sectors" (particularly during the tech boom of the late '90s), Begbie said. While he notes that some companies have been very successful through a strategy of buying talent, once ScottishPower made the commitment to internal promotion, it needed to actively focus on the development of its managers.
Both programs are multifaceted development efforts. The more senior BLP includes several weeks in development workshops focused on corporate challenges and capabilities, market trends, leadership, and team and organizational dynamics. In the BLP, the senior high potentials work as a group on a project identified by the executive team that is strategically important and relates to an issue that cuts across the entire company. In addition, BLP participants attend external business school programs (such as an Advanced Management Program) as an integral part of the learning process. The GLP develops mid-level high potentials in a shorter program. These high potentials work intensively to understand the breadth of the business, to pursue individual development needs, and to become more aware of the dynamics of effective teams and organizations. Through these programs, ScottishPower's high-potential leaders also gain an understanding that "there are certain things we stand for regardless of where you are in the company," you are in the company," Begbie said.
He stressed that an integrated approach to developing leaders, driven by the company's leadership model, was crucial. The development programs are supported from the top of the organization and integrated into the firm's performance management system and compensation. "We've started to integrate leadership development with other aspects of the employment experience," Begbie said. The bench strength is also supported by an active mentoring program. Each of the senior executives is serving as a mentor to the next tier of managers, and this is cascading down the organization
The importance of building the company's leadership is clear from Miller Smith's letter in the Annual Report & Accounts 2002/2003, where he emphasizes that, "Today, ScottishPower has an international leadership team of growing stature and a programme of development initiatives designed to raise our skills and competencies further."