-: Good afternoon, Richard.
Thank you for finding the time to speak to us today
and share with us the learnings
of running large transformations.
-: Delighted, Deepak, very happy to help.
As you think about this whole transformation,
what were the two or three key challenges
Centrica was facing as you thought about
launching this large-scale transformation?
-: So you had government intervention
and regulatory intervention,
the Competitions Market Authority,
all looking and questioning the amount of price
or the prices that the customers were being charged
and asking whether it was a fair
and properly competitive market.
The second set of drivers, really, were around
this evolution to, what we refer to as digital.
So, our customer base was forever experiencing
a better and better digital experience across
the banks and the telcos
and the other parts of the service sector.
But the energy companies were still, really, I think,
stuck, as in the sort of what I'd describe as,
the fat utility space,
and hadn't moved to give the customers
the sort of experience they were getting elsewhere.
So, we had two real sorts of bit of pressure.
-: Centrica is UK's largest oil and gas supplier,
has a diverse set of businesses
from lighting lamps in the centre of the city
to energy storage, to connected home.
As you think about large-scale transformation,
what are the key peculiarities that you need to handle?
-: So, the first big question is, what problem is it
you're trying to fix within which strategic framework?
So, when I joined Centrica in 2016,
the strategy was very clear.
You know, competitive in the energy market in the UK,
competitive in the US energy market.
But really seeing energy as being a future commodity
and therefore more and more commoditized,
so, the shift into being a services business.
Therefore, you sort of found yourself at the heart of,
this is now really about customer experience,
because an energy and production business
is a B to B business and therefore,
we were starting to focus much, much more
on the B to C business.
What we had worked out was that in order to transform,
you had to work out the transform from, to,
right across the spectrum
of people, process and tools.
What were we really trying to be?
It was very easy to say we want to be
an energy services solutions company.
But what did that really mean?
So, when you're kicking off a transformation of this size,
there are just hundreds of questions to answer
as well as working out how you transform away from
those things that you no longer want to be.
-: Was there anything during this journey
that was a surprise to you,
the good or the bad, that then made you rethink
the journey that you were taking?
-: I think this, for me, was more about relearning lessons.
So, I think like most of my colleagues, out there,
who do transformation
and (mumbles) large-scale complex changes,
you're constantly relearning
that whole point about having a unity of purpose,
that single common end state that everybody lines up to.
And I would say that I, consistently, have relearned that.
Every time I think I've got everybody lined up
and we're all heading in the same direction,
I discover somebody is just starting to wander off.
I have to go and collect them and bring them back
to make sure that we're holding to that unity of purpose.
-: So Richard, we talked about
this whole starting of the transformation,
so now that you are somewhere
in the middle of the transformation,
how has the transformation helped you compete better
with the smaller, nimbler competitors in the market?
-: We have delivered £395 million worth of
efficiency savings over the last three years,
which I think is quite significant.
But we've also, in driving our digital journeys
and the effort to move customers online,
we started the process, we're taking about
28 million voice calls a year,
we were still very much an analogue style business.
As of October 2019, we've removed six million phone calls
from our service estate and we have more than doubled
the number of digital online interactions.
Most of our customers first interaction with us
is online or digital web chat.
So, we've shifted the customer experience.
We're one of only two of the big six, right now,
that is profitable.
So, now if you go to the price comparison website,
when I first joined the business we couldn't get on there
at a price that made us any margin,
now, we're operating at about number five
on the price comparison website,
and probably the top brand, but at number five.
So, we're able to compete at price
and with the quality and the brand
of our service on offering.
So, it's enabled us, really, to stay relevant
and up to date.
But we've another 18 months to go,
so of course, we're into the hard yards now.
And I'm convinced that we can be as good as
the new (mumbles) of the market,
in every department.
And still offer a fantastic customer experience.
-: So, Richard, as you think about this transformation
and sharing the learnings to others,
what are the key learnings that you would like to share
if another large complex organisation, similar to yours,
were to undertake this journey?
-: Firstly, having a really clear change narrative,
understanding what and why you're changing
in such a way as you can bring the workforce with you.
We have a very competitive market
with government regulation
and a requirement to stay relevant
and a desire to move into services.
So, a lot of the commercial drives were there.
But, of course, in moving into digital
and taking loads of calls out of the system,
we were going to lose a load of our colleagues, on the way.
And, so, we needed to ensure that our change narrative
was well-understood across the business.
And what was interesting for me,
and this was actually, our employees are also customers,
not just of us, but of everybody else,
so, of course, they were waiting for us
to say, "We need to shift digitally."
'Cause they, almost, couldn't understand
why we hadn't already gone.
I also had to think about capability.
So, one of the other big learnings for me, in this,
was understanding the capability of the organisation,
not just to be, in our case the digital player
we wanted to be.
Did we have those skills,
where are we going to learn them from
and can we therefore build those things
that we're setting out to.
And in one or two cases, we've discovered,
that we've actually bitten off more than we can chew.
That we've set out on a couples of programmes
that are very hard for us to build
and then, subsequently, to consume.
And that would be the next point,
about the ability to consume the change.
So, you can very quickly build a muscle
that says, "We're going to change."
And you build a strong team
and a great set of programme directors
and project managers that are able to build the projects.
The problem then comes when you actually
have too much going on in the business to be able
to consume the change and embed it.
So, therefore the benefits, whether they're in pounds
or processes or people or MPS,
don't get realised 'cause you're struggling
to consume the change you've built.
So, there were a whole pile of lessons in that space
that meant that we had to be really clear on our plan,
really clear on our investments,
really strong control.
Everybody hates governance,
but actually it's that medicine
that you really need to take
to make sure that the programmes all land.
-: So, Richard, you were saying
that the transformation journey is still ongoing
and there's still about 18 to 24 months of transformation
still left to go.
So, what is still left undone?
-: The biggest element is the digital shift, Deepak.
So, I like that phrase
and I'm not sure where I've stolen it from.
But, "Build it and they will come."
One of the things that you discover with our customer base
and everybody's customer base is,
you can build all these online journeys
and implement web chat
and, you know, SMSs and all the rest of it,
but if your customers are used to calling you
then it takes quite a lot of effort
to shift the customers over
onto this new infrastructure that you've built
and make the customer experience,
the wonderful customer experience, it needs to be.
So, the bit that we've still got to do
is that digital shift.
Our customers are moving,
our MPS scores in those customer journeys are improving.
There's a bit of me wondering, when we're gonna declare
that the transformation's complete
because, of course, the customer is king
and keeps wanting more
and wants this more seamless journey.
-: Richard, thank you, for finding time
to share all these learnings with us.
-: My pleasure, it's been a great partnership
and I think it'll continue for some time.