A Solution For 'Organisational Culture' That Has Been Eating Strategy For Breakfast At PNG Power Limited

Strategy is the long term direction of an organisation. Recognise the three key terms in the preceding sentence that defines strategy: 1. Long Term, 2. Direction and 3. Organisation.

In the article below from The National newspaper you can read about and delve more into the strategy discourse by the SOE Minister on the action plans to rescue PPL which is reported to be on the 'verge of insolvency' and these actions are intended to get some tractions back on the 'direction' that PPL should be headed. For our PPL, we appear to be still stuck and struggling in 'Horizon 1' of strategy.

What Does This Strategy And Funding To Rescue PPL Look Like?

There are eight (8) key areas in the strategy discourse reported:

1. Addressing organisational inefficiencies (cost-cutting measures)

2. Optimising people and CULTURE

3. Financial management strengthening

4. Business recapitalization

5. Revenue improvement

6. Service reliability improvement

7. Power Development Plan every 5-years

8. Tariff setting

Off course with executing or actioning strategy, you will need funding. The sequence and funding will come from:

• 2021, K439+M support in kind from KCH (not sure if this was captured to come up with the K882M owed to creditors by end of 2022)
• 2021, A portion of the K288M from ADB
• 2022, More funds coming from ADB
• 2023, K211M from GoPNG
• 2023, K1.75B secured (K720M -ADB, K250M-AFFIP, K105M-World Bank) to support the 15-year-power-sector-deveopment plan.

Note: most of these funding are coming in the form of loans, so if KCH/PPL can't repay then it falls on GoPNG/public to repay.

Since approach to strategy is overlapping and intertwined and can be either direct or emergent, we can start looking at strategy from various angles to end up with a desired outcome. Of the eight (8) proposed actions for PPL, and in this instance, I started with 'Optimising People and Culture'.

Organisation 'Culture' As An Important Factor In Actioning Strategy

Absolutely there are multifaceted and interrelated factors involved in putting 'strategy into action' and 'organisational culture' is an important factor to be considered. It is listed second as one of the key areas to look into resetting the direction for PPL.

The environment (PESTEL, Industry, Competitors and Market), the organisational capabilities (resources and competencies) and stakeholder purpose/expectations (vision, mission, values and objectives) are important considerations in the development and positioning strategy of PPL. However, failing to take into account or not considering upfront and underestimating the influence of culture in organisational strategy will lead to 'culture ending up eating strategy for breakfast' as culture gives rise to 'strategic drift' which often underpins unsatisfactory corporate performances in the long run.

Many organisations have long histories and historical legacies that have become embedded in their cultures. The cultural heritage of an organisation may work to its advantage because it cannot be readily replicated by its competitors. Culture may, however, also be problematic since it can be a significant barrier to change. Either way, if an organsiation's strategy is to be understood, so must the history and culture that influence it.

Aspirants to lead PPL as well as power brokers providing oversight to its management and execution of corporate level strategy, business level strategy and operational strategies must know its history which can come up in random events in the 'environment' (PESTEL, Industry, Competitors and Market) in which PPL operates in and if we stop to reflect, we will see a pattern developing which will enable us to intervene decisively and do 'radical surgery' on PPL!

In fact if we study these seemingly random events we will see a pattern in: the macro-PESTEL environment; the power/energy industry sector; as well as competition and market, that PPL operates in. Strategy is in fact pattern in action and if you read deep into the 'random events' in the above article then you will see this pattern: about consistency in decisions and action plans; winning against competitors in the market; understand our position in the market; and focus everyone's attention on what needs to be done.

Again of the eight (8) proposed actions for PPL, people and culture appears to be a difficult one to change but will have a lasting sustainable effect and this is where I will decisively start at.

A Way Forward To 'Optimise People And Culture' At PNG Power Limited

What the power brokers need to do is influx the organisation with a 'critical mass' of the right thinking people. Together as a team this 'critical mass' of people will support each other to resist, overcome the existing culture and fan out the new way of doing things into and changing the existing culture.

One way to do this is to camouflage this strategy by creating a new business unit in PPL (maybe call it 'Business Improvement') and recruit all people not previously working with PPL before but who have relevant qualifications and relevant work experience in the power industry as well as in the area of 'business improvement/transition/strategy' (i.e. six sigma, 5S, lean manufacturing, RCM and etc).

In mid 2010 PPL had attempted this with the creation of the 'Performance Engineering Division' which aim was to optimise the operating and maintenance performance of PPL's core operating assets and to deliver value to its planned maintenance to ensure efficient and effective operational levels. But, now with the benefit of hindsight, I can say that it made the crucial mistake of staffing it with its own 'in-house' people who appear to be already set in their ways shaped by the existing culture.