Covid-19 leadership case study: SSE
TtU brings you inspiring stories of business transformation by bold leaders. We highlight those who, suddenly faced by the COVID-19 crisis, recognised the urgent imperative to define clearly their purpose. They realised their organisation must innovate and transform at high speed so they would thrive in adversity. Other leaders can be inspired by such stories of success.
This is the experience of the giant UK energy supplier SSE. The Chief Executive is Alistair Phillips-Davies. He detailed the enormous challenges that he and colleagues faced to the British Academy’s Future of the Corporation initiative on 24 June.
He listed the key strategies that enabled SSE to respond fast to the Covid crisis:
- Rapidly develop clear goals and absolute focus
- Create a positive environment for all SSE’s staff and contractors
- Keep critical workers employed - testing them two to three times per week
- Provide job security: no furloughed employees
- Ensure the scale and quality of IT was the best and most efficient possible
The coronavirus crisis drove one single imperative. “I think keeping power flowing on our networks and from our power stations was an absolute crystal clear focus,” said Alistair Phillips-Davies.
But it required high speed adaptability, innovation and transformation. “I think it’s about creating a positive environment for people. But the ability to get a laser-like focus was extraordinary.”
“For everyone in our company there was a lot of change to the processes that we had. Our colleagues had to do an awful lot to make sure that all our colleagues and our customers were safe.”
Central to the task of rising to the almost unthinkable new challenges was to scale up rapidly the working-from-home capability from 1,000 to 10,000. This technical transformation was vital. It was achieved in just eight days instead of what might typically take six months of planning.
This ensured the meeting of SSE’s first priority: to keep the company’s critical workers operating 24/7.
“There’s between four and five hundred of them that we test two or three times a week. They run control rooms and they’re in essential positions that really keep the energy flowing to keep hospitals and homes powered.”
SSE realised quickly it had to support the communities in which it operates plus the supply chains. As Covid struck, the company moved quickly to provide flexible community funds to deal with the immediate crisis.
“There were a variety of things that we did, ranging from providing hand sanitisers into homes, meals for vulnerable people. We re-purposed a lot of funding that we had to do that. But also, we supported key suppliers who had to furlough a lot of staff. We would need them again to rebuild networks and to potentially provide workers for the green recovery which we hope will be coming very soon.”
The strength of the company’s balance sheet meant it was not necessary to furlough any employees. Less than 200 are what Phillips-Davies describes as ‘unproductive’ and 98% are working.
Despite public-backed pressure on companies not to jeopardise their solvency by paying dividends, Phillips-Davies believed in the importance of honouring the commitment to shareholders.
“At the end of the day, from an investor perspective, we’re very much a dividend-paying stock or an income stock. Savers and pensioners rely on the income that we provide. That income is obviously going to get recycled back into society.”
“Coronavirus only struck in the last couple of weeks. So we were in a position to pay. We did consider all the angles around that carefully, but ultimately, honouring a five year commitment we made back in 2018 to the various savers and investors who rely on that money was something that was important to us.”
Addressing the challenges to meet targets on sustainability and the Climate Emergency is a core policy for SSE. But Phillips-Davies has a clear sense that the true scale of the climate crisis has yet to be realised. He says it remains as acute as ever.
As a company, he says SSE is determined to inspire focus on a green recovery from the ravages of COVID-19. The company has published its own set of 15 proposals for government to help frame policy that can invigorate a green economy.
“As a company, we’ve been fairly quick out of the blocks, we’ve been able to put our money where our mouth is. “We announced a new £3bn offshore wind farm that will be the largest in Scotland. And we’ve also taken the final investment decision on the UK’s largest onshore wind farm on Shetland, which will be about £180m of investment.”
Both decisions were made in ‘pretty challenging market conditions’. The CEO believes that even with the huge unexpected pressures from COVID-19 the company’s clarity of purpose to provide ever greener energy to help meet the UK’s net zero commitment world made those decisions even more necessary.
The board and executive team were able to communicate that in order to motivate staff ‘right up the front line’.
“It’s with that purpose, aligning with society’s objectives, that we believe the impact of the green recovery has the potential to be incredibly powerful, not just through this crisis, but for the longer term as we emerge from this crisis and what will clearly be a difficult economic environment. It is something we’ve certainly been able to build a strong narrative around for staff, suppliers and key partners throughout the business.”
You can watch the full Future of the Corporation session on YouTube.