From stone tablets to web-hosted strategic planning and execution

Greg Ridderbusch

Shannon Lechtenberg

Topics today

Who is Great River Energy?

Strategic planning with multitude of stakeholders

Evolution of processes and tools

Lessons learned

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Who is Great River Energy?

28 member cooperatives – 1.7 million consumers

2nd largest power supplier in MN

4th largest G&T in the nation• 3.9 billion total assets

• $2.8 billion total debt

• $1.02 billion revenue

910 employees (MN and ND)

3,718 MW generation• 710 MW renewables

4,696 miles transmission

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A cooperative electric utility

Diversified, strong membership• Active board governance

• Valued member cooperatives

Excellent power supply assets• Baseload … world class

• Peaking … capacity matches needs

• Renewables … on track to meet 25% by 2025

Excellent transmission system• Regional transmission projects with other utilities

Access to capital & energy markets

7 COOPERATIVE PRINCIPLES

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Electric cooperatives

Cooperative Structure

Private, non-profit electric utilities owned by the customers they serve

At-cost electric service

Member elected board of directors

Cooperative Facts

840 distribution and 65 G&T cooperatives

Serve an estimated 42 million people in 47 states

18.5 million businesses, homes, farms, etc in 2,500 of 3,141 counties in the U.S.

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Evolving generation portfolio

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Generation asset footprint

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Cooperatives in transition

20th CenturyBring electricity to rural America

Federal program

Cooperatives served where others would not

Major infrastructure build

Rural marketing of end use devices

Rising electric demand

21st CenturyServe new consumers in new ways

Distributed generation

Declining cost of solar

New regulatory structures

Low cost natural gas

Slowed market growth

New market entrants

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Coal-fired generationemission reductions

SO2

- 56%

NOX

- 40%Hg

- 40%

CO2

- 20%

Renewable energy leadership

• 468 MW of wind energy

• Biomass including 31 MW waste-to-energy plant

• Solar projects totaling up to 650 kW

Innovation driven by strategy

Opportunities that support our core business DryFiningTM technology

Section 45 transaction

Midwest AgEnergy Group

• Blue Flint Ethanol

• Coal Creek Drying & Storage

• Dakota Spirit AgEnergy

Spiritwood Energy Park Association

Fly ash marketing

Frac water marketing

DryFining signing with Tangshan Shenzhou

Manufacturing Group – in China August 2013

Coal Creek Drying & Storage – Semi delivery

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Great place to have a career

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Strategic Challenges & Opportunities

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What future portfolio will keep the lights on?

Uncertain future of coal-based resources after Clean Power Plan

Reliable electricity still priority natural gas as future baseload option

Development of renewables expertise to thrive in world of falling costs & mandates

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Technology changes

Increasing consumer options for distributed generation … the “prosumer”

Electric vehicle potential for electric sales and energy storage

How to serve these “new” consumers that want less reliance on the grid?

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Protecting critical national infrastructure

Physical threats

• Deterrence: High fencing, crash proof gates

• Detection: Video surveillance, motion and sound detectors

• Response: Action plan, law enforcement coordination, power redundancies

Cyber threats

• Constantly evolving risks as the grid becomes smarter and more interconnected

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Planning Approach & Strategy Development

GRE strategy development lifecycle

ASSESS

DEVELOP

RESOURCE

EXECUTE

GRE strategy development process

ASSESS

Market Research

SWOT Analysis

Scenario Planning

Senior Leadership Engagement

DEVELOP

Senior Leadership Authorship

Employee Alignment

Stakeholder Participation

Revise & Approve Strategic Plan

RESOURCE

Business Unit Work Plans

Corporate & Business Unit

Metrics

Budget & Work Plan Approval

Communicate Plan

EXECUTE

Business Unit Plan Updates

Track Plan Metrics

Employee Engagement

Survey

Management Review & Report

Biennial strategic planning cycle

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Task 1: Senior leadership interviews

Task 2: Senior leadership offsite

Task 3: Management exercise

Task 4: Stakeholder exercise

Task 5: Stakeholder education

Task 1: Identify CTD team

Task 2: Kickoff and process meeting

Task 3: CTD team interviews

Task 4: CTD themes & senior leadership

Task 1: Develop board strategy retreat

Task 2: Retreat development

Task 3: Board strategy retreat

Task 1: Train users on ESP

Task 2: Develop L1 strategic plan

Task 3: Business unit confirm L2 plan

Task 4: Business unit develop L3 plans

2014

GREAT RIVER ENERGY STRATEGIC PLANNING TIMELINE

STAGE I - ASSESS

A. Business Unit Work Plans

A. Senior Leadership Engagement

STAGE II - DEVELOP

2013

A. Senior Leadership Authorship

B. Employee Alignment

C. Stakeholder Participation

D. Revise & Approve Strategic Plan

STAGE III - RESOURCE

B. Corporate & Business Unit Metrics

C. Budget & Work Plan Approval

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Task 1: Senior leadership interviews

Task 2: Senior leadership offsite

Task 3: Management exercise

Task 4: Stakeholder exercise

Task 5: Stakeholder education

Task 1: Identify CTD team

Task 2: Kickoff and process meeting

Task 3: CTD team interviews

Task 4: CTD themes & senior leadership

Task 1: Develop board strategy retreat

Task 2: Retreat development

Task 3: Board strategy retreat

Task 1: Train users on ESP

Task 2: Develop L1 strategic plan

Task 3: Business unit confirm L2 plan

Task 4: Business unit develop L3 plans

Task 1: Develop communications plan

Task 2: Create poster and brochure

Task 3: Ship and distribute to employees

Task 4: Intranet featured article

Task 1: Quarterly plan updates

Progress update, status, date due, owner

D. Employee Engagement Survey

C. Management Review & Report

B. Corporate & Business Unit Metrics

C. Budget & Work Plan Approval

D. Communicate Plan

STAGE IV - EXECUTE

A. Business Unit Plan Updates

B. Track Plan Metrics

A. Business Unit Work Plans

A. Senior Leadership Engagement

STAGE II - DEVELOP

2013

A. Senior Leadership Authorship

B. Employee Alignment

C. Stakeholder Participation

D. Revise & Approve Strategic Plan

STAGE III - RESOURCE

2014

GREAT RIVER ENERGY STRATEGIC PLANNING TIMELINE

STAGE I - ASSESS

Market research & emerging issues

Many inputs

• Use forecasting

• Input cost forecasting

• Macro economics

• Technology trends

Many tools

• Transmission system

analysis

• Stochastic and

deterministic models

Many stakeholders

• Consumers

• Regulators

• Legislators

• Members

• Other utilities

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GRE scenario

planning process

Scenario Drivers Scenarios Decision Analysis

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Strategy events

Visioning exercise with year 2025 point of view

Debate style exercise

Issued based meetings

Executive staff offsites

Board and ownership retreats

Common themes incorporated into strategic plan

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Employee alignment process

Innovative and unique process

Coincide with strategic planning efforts

Started in 2006 as an annual process to ensure employees had a voice on direction of organization

Shifted to biennial approach in 2012 to sync with strategic plan

Collect feedback on proposed strategies

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Employee alignment …how it works

Employee team of 10 selected by senior staff

Each team member interviews 10 designated employees

Collect feedback on proposed strategies through a series of direct questions specific to the draft strategic plan• Are we missing something?

• Are strategies executable?

• Do we have the right resources?

• Are there any conflicting interests?

Develop common key themes

Share direct feedback to senior leadership

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Employee alignment … senior leadership session

• Scariest part for team members!

• Senior staff must LISTEN – may only ask clarifying questions

Consider feedback and develop action plan

Discuss action plan with CTD team

CEO follows up with interviewees on result

Entire organization briefed on outcome

Team delivers feedback to senior leadership

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External stakeholder participation

Variety of external stakeholders

Educated stakeholders on GRE strategies and current challenges

Input on potential collaboration, strategic suggestions and communication efforts

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BUSINESS UNIT

WORK

PLAN

CORPORATE

STRATEGIC

PLAN

Planning construct

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Communication vehicles

Poster

Success Pyramid

Every facility

GRE intranet

Brochure

The Big Picture

Every employee

GRE intranet

Presentation

Communication

meetings

GRE intranet

Key Performance Indicators (KPI)

Developed by a cross-functional team of employees

Tracked and measured quarterly

Five performance categories with various measures

• Safety

Total Incident Rate (TIR)

Days Away, Restricted and Transferred (DART)

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Employee engagement surveys

Confidential employee opinion survey

Administered every 3 years

Measures employee engagement through commitment and line of sight questions• I have a good understanding of GRE’s strategic imperatives

• I know how my job contributes to GRE achieving it’s strategic imperatives

• I have a good understanding of the steps GRE is taking to reach their strategic imperatives

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Evolution of processes and tools

10 year journeyimproving processes and tools

Great River Energy

Work Plans

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20th century work planning

Word or Excel documents• No reporting capability

• Limited vertical cascade

• Single user access

• Cumbersome to find assigned work goals and actions

Wide range of use and quality

Has helped with employee line of site … from work goals to strategy

Loose links between strategy, work planning, resources, and results

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III. Performance Management

IV. Strategy & Work Optimization

II. Work Management

Strategy Implementation Maturity Model*

Annual work plan

Coordination between

work groups

Supervisory progress

reviews

Resources assigned

Work analysis tools

Plans coordinated

vertically and across

divisions

Variances drive plan

modifications

Integration of plans,

metrics, and

performance

Corporate plans and

objectives aligned

among divisions

Reporting of

performance to work

plan objectivesScheduled performance

measurement

KPI linked to division

plans

Corporate strategies

align with work plans

Quarterly executive

review of work plans

Employee awareness

of alignment of

individual work plan to

corporate strategy

Long term budgeting

and resource

allocation tied to work

plans and strategies

I. Task Oriented

2005

* SIMM model edited from Y-Change

Planning process improvement

Seeking …

Stronger alignment between business unit work plans and corporate strategic plan

Enhanced accountability

Create stronger line of sight

Biennial strategic planning with five year outlook

Better tools to facilitate planning process

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First get the strategy right …… then improve work planning tools

Business unit interviews to assess current state

Defined the target project

• Identified stakeholder needs and developed tool requirements

Identified work planning solutions

• Request for Information, demos, request for quote, etc.

Selected Y-Change and Integrated Strategy Manager (ISM) platform

Pilot set up and configuration

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We implemented in one year

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Enterprise Strategy & Planning Tool

Great River Energy

Work Plans

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Enterprise Strategy and Planning Tool

Plan hierarchy

Corporate Strategic Plan

(L1)

Business Unit Strategic Plan

(L2)

Business Unit Work Plans

(L3)

Work Goals

Actions

Department or Plant Work Plans

(L4)

Work Goals

Actions

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Enterprise Strategy and Planning Tool

Accountability

Enterprise Strategy and Planning Tool

Linking plans to strategy

Enterprise Strategy and Planning Tool

Status – plan, work goal & action

Enterprise Strategy and Planning Tool

Date due, owner & resources

Enterprise Strategy and Planning Tool

Plan specific KPI

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Enterprise Strategy and Planning Tool

Strategy cascade report

Enterprise Strategy and Planning Tool

Customized reports

Summary report – high level

summary for board approval of

work plans with budget

process

Executive report – Detailed

report for VP’s and staff with

capability to select quarterly

progress updates and graphics

for KPI

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Change management!

Continuous, ongoing and timely communications

User training

Individual sessions

Reiterative process

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Materials

Hands-on user training

Customized help guides

“How-to” videos

Glossary of terms

FAQ’s

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IV. Strategy & Work Optimization

II. Work Management

Strategy Implementation Maturity Model* Post-technology deployment

Annual work plan

Coordination between

work groups

Supervisory progress

reviews

Resources assigned

Work analysis tools

Plans coordinated

vertically and across

divisions

Variances drive plan

modifications

Integration of plans,

metrics, and

performance

Corporate plans and

objectives aligned

among divisions

Reporting of

performance to work

plan objectivesScheduled performance

measurement

KPI linked to division

plans

Corporate strategies

align with work plans

Quarterly executive

review of work plans

Employee awareness

of alignment of

individual work plan to

corporate strategy

Long term budgeting

and resource

allocation tied to work

plans and strategies

I. Task Oriented

2005

* SIMM model edited from Y-Change

2014

III. Performance Management

Lessons learned

Get your strategy process right, then tools enhance

Communicate, communicate, communicate

Tool implementation

• Put together a team of knowledge experts

• Find early adopters

• Test every user, every page

• Change isn’t easy … be patient with those who are challenged with change

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We have more to do

Link corporate strategy to corporate KPI

Develop formal management review meetings

Roll out other features of Y-Change tool (i.e. projects, meetings)

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Concluding Discussion

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