Blend a Viscount with a General, a priest, a statesman and a deal-maker. What do you get? The outcome is an executive at EDF, a premier global energy provider. Here leadership is forged from noble appreciation of French nationalism, plus wits sharpened through the British deregulation which EDF Energy has experienced. By Cora Lynn Heimer Rathbone, a lecturer at the Centre for Customised Executive Development at Cranfield School of Management.
The factors in EDF's rise also include a 'service publique' culture tested by underprivileged populations (e.g. South America); local sensitivity nurtured at Germany's EnBW; and charm polished through Italian-style negotiation over Edison.
Development of talented people, such as EDF's, demands equal measures of humility and confidence: humility is needed to recognise existing high capability, while confidence is required to challenge current practice. Commitment to 'customisation', working partnership and a collaborative relationship between the business school and internal (corporate) development professionals are fundamental.
Why formally develop people if, as at EDF, you recruit the best available from the best institutions? (Such talent brings, after all, extensive networks across the highest arenas of political, commercial and academic power - networks that ensure continuous subliminal development.) There is one main reason for the emphasis on developing people: major change that demands new levels of performance.
In the shadows of a Paris restaurant, approaching midnight, one participant mused over the new dawn: 'We employees of EDF are like well- nourished dogs, and all the world knows that thin dogs run faster.' The group faces important challenges. Its capital has been opened to public ownership (an IPO in November 2005 made 15% of the equity available); competition has been introduced in the SME market, with private households to follow in 2007; disaggregation of the vertically integrated business model has proved necessary; and increasing deregulation forms another of today's EDF challenges.
Executive development was seen as the necessary input required to attain several desirable ends: clarity over the reasons for transformation (e.g. not everyone believed the IPO should or would happen); ambitious goals (to be a top operator in Europe, retain a significant proportion of the French market and increase presence in the UK, Germany, Italy and Spain); creating a shared group culture; grafting commercial skills onto technical, public servant-minded managers.
Thus in 2003 this giant of the French establishment launched its Corporate University (CU). It signed contracts with three business schools to develop the top three populations: young executives, executives, and senior executives.
Early in EDF's CU partnership with Cranfield, a mission crystallized: to build an integrated executive development suite to augment strengths, leverage excellence and introduce new best practices for sustainable higher performance. Clearly, performance is only the result of what people do. What then was the vision or business need? The answer was to add commercial competitive skill to the equipment of world-class engineers and administrative leaders. A shorter- term goal was to encourage maximum employee participation in the forthcoming IPO.
The team focussed initially on the Young Executive population, designing, developing and launching in 2004 a four-pillared young executive series. This explores (1) people management (2) the emerging pan-European energy market, (3) strategic scenarios and (4) performance (seen as a triangulation of core business excellence; corporate responsibility/service publique; and economic results).
The ordering of the four pillars is important. EDF supplies a necessary developed-world commodity through expert engineers operating in a finely tuned, low-margin industry with high cost of entry. Energetic value creation starts by engaging the passion of those expert individuals - however bounded that passion may be by the established market with its major players and stakeholders, ensuing strategic options and performance constraints. The logic is that empowered, enabled and connected people, if equipped to appraise their operating arena, with its market parameters, and to enact strategy (to manage strategically) within the context of their day jobs, will outperform.
But how do you roll out such development? Certainly not through 'talk and chalk'. Each session became a 'pentathlon'. First, EDF executives, senior executives and/or experts present group goals and current practices against which new concepts can be compared. They give the sessions a strong base, ensuring against the generic or theoretical.
Second, diverse subject specialists, largely from Cranfield but also from Insead, ESCP-EAP and the London Business School, provoke new ways of thinking. Aware of EDF's key issues, they unfold tools, models and alternative frameworks. No single contributor or guru could do justice to the implications of most topics in so complex an organisation as EDF.
Take as examples two dilemmas: (1) How can managers encourage innovation while concurrently driving compliance in mission-critical, high reliability processes? (2) How can EDF deliver high shareholder value as a publicly quoted company while satisfying service publique obligations to underprivileged populations? As one exasperated participant exclaimed: 'What return on investment? Madam, we build for eternity. You and I, we don't have the same values!'
Third, external guest speakers, often senior executives of unconnected companies, pepper the programmes with off-the wall insights. The fourth, indeed central, aspect of these programmes is the participants themselves. A very interactive approach places them at the centre of exchanges to increase their learning experience and the probability of behavioural change.
Participants learn from each other, and the faculty from them. A session models the give-and-take ethos of EDF's CU. Now more than 20 participants attend each four-day subject-specific session; and individuals engage in regular small-group work to kick-start the translation of learning into practice.
Such a blend could result in disjointed thinking. The synthesis of key messages, clarification of the fil rouge and integration across the suite therefore becomes the fifth and essential plank, fulfilled in this series by Cranfield's programme director. The accountability of the development partner to individual participants - to facilitate organisational development and value creation through application of learning - is thus ensured.
Development value can, of course, be measured in terms of new knowledge, a common language that contributes towards a shared culture, extended networks and enlarged perspectives. All of this can be delivered at least in part by most in-house development programmes. It is indeed the substance of much contemporary 'edutainment'.
However, sustainable value creation through management development only happens to the extent that individual participants go on to produce greater results in their day jobs. What evidence is there that such value-adding application of learning is taking place at EDF? It is early days. Only a handful of individuals have completed the suite.
However, taking the short-term measure of employee subscription to the IPO, the French government has declared a resounding success. Two-thirds of employees bought shares with an average investment per employee of €9000. Of course, executive development was only one of several contributory factors. ...
For a more direct contribution to longer-term measures, three months after one of the four sessions, a participant from a professional support function in EDF Energy wrote:
'I am acutely aware of [competitive strategy]...of the need to be innovative...(I) understand the competition and the customer when I advise our sales and marketing departments. The challenge for me is to consolidate what I have learnt and implement more of it into the manner that both my team and I work..."
Surely this re-investment, this application of learning in present jobs/roles by individual participants is what creates sustainable and measurable value.
Turning to a strategic perspective, asked what value has been added through these development interventions, Dr. Ingrid Keller, Senior Vice President and founding director of the EDF Corporate University, said:
'We were looking for a dynamic, passionate and practical partner. We were looking for a business school that knows the world of engineers and is able to open people's minds. Our choice of Cranfield has proven to be a good one.'
The young executives who attended are thinking out of the box. They know that they can do things differently. Participants who had come from the distribution network or production units have begun to see the larger picture. They have extended their reaction patterns, and are passionate about the business and about working with others. They see the company from the customer's perspective. They realise that everything that everybody does is measured against the extent to which those actions serve the customer.
As such, these programmes have been an important step in creating a group identity while also upholding national identities. By sharing values, meeting new colleagues and building new networks, people feel more responsible for the company as a whole. This was one of the main reasons for creating the Corporate University in the first place.
Cora Lynn Heimer Rathbone is a lecturer at the Centre for Customised Executive Development at Cranfield School of Management.
Contact: +44 (0)1234 754426 or jane.wharmby@Cranfield.ac.uk
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