Workplace Partnership – Northpower and the New Zealand Public Service Association

2. The Emergence of a New Relationship

Several years ago, Northpower recognised that, to continue to be a successful electricity network owner and service provider, it needed to change the way it configured its services to consumers and associated companies. This was not only necessary with respect to the way service delivery was structured, but important changes to the way work was organised would also be required to make that structure work. Of course, this meant new ways of working being adopted by both managers and staff.

"We had to make major structural changes in separating out our network and contracting services. Our financial performance on contracting was going backwards three to four years ago. The guys in the old network structure used to micro-manage the work allocation. This left them with little time to plan and design the work, so work was passed to contracting that wasn't sufficiently planned or ready to be completed. The resulting delays and performance problems led to even more micro-management by the network people and no progress on resolving the real issues. After restructuring, we proved in two years the value of what we did. We increased the financial turnover of Whangarei contracting from $14 to 20 million, and that level of productivity came about using the same field staff - may have been slightly less. We took profit from zero to $1.8 million and the next year to $2.5 million. It was a fundamental change in the way we used to do the work, and we were devolving problem-solving." Mark Gatland, Chief Executive

It hasn't always been a convivial productive relationship between the company and its workers.

"In the early days, management and employees stayed on their own side of the fence. We'd have wage negotiations for three weeks and they turned to shit. In that situation, no one wins. And the way the company handled redundancies 14 years ago when they wanted to get rid of dead wood, we were treated like a herd of sheep - we had a meeting and those to be kept went in one direction, those not in a different direction." Foreman of 20 years experience/PSA Delegate

"Members were active early on and very critical of and frustrated with the existing circumstances. This was often relayed to the CEO. But the frustration was a clear indicator of commitment to the organisation and desire to do better." PSA Organiser

Since those early days, there have been major changes to the structure of the electricity industry. Northpower changed from a traditional power board to a consumer trust-owned company with directors and senior management fully accountable for the company's day-to-day performance and long-term business outcomes.

There wasn't one key turning point for Northpower, but rather certain events happened in parallel. There was a change in work design, a change in union and a change in structure. Specifically, there appeared to be five things that contributed to the initial shifting of the culture to become more commercial and performance oriented, as described by one Northpower manager:

1. The contracting opportunity: This was the opportunity for Northpower to provide line maintenance under contract to other electricity providers. This was about capitalising on what this had to offer and understanding how it might be different.
2. Taking forward the best of the traditional approaches such as pride in workmanship.
3. Having strong characters in the workforce who believed in their skills and wanted to show they were up to the challenge (instead of being defensive of the status quo).
4. Separating design from project management teams: Before, the designers were also the project managers who priced the jobs, created the construction plans and issued these to the line teams who got on with the job. This was changed by a split into separate design and project teams.
5. Issues or problems were able to be sorted out in the teams: Changes were made that meant teams no longer had to come back to the centre for direction.

While these things happened over time, many of those spoken to note that a significant opportunity arose for the company when the Auckland Vector Project emerged. One senior manager described the opportunity as it unfolded in the early days:

"Four years ago, I moved into the area manager role in charge of contracting in Whangarei. When the team who undertook contract work outside of Northpower's geographical area was set up, they performed very well and were paid very well. The network manager observed that he'd love to have that performance level in Whangarei, but it was a case of the guys away being very focused on the work without the usual distractions of home. They could work longer hours - they weren't expected to be home with their families or completing other community responsibilities. They had finite chunks of work to deliver, and their work was not mixed with maintenance or fault repair work."

One of the early movers to the new way of working explained:

"Once the Vector opportunity opened up in Auckland, the guys working that contract had pay rates that were reasonably inflated compared to the guys in Whangarei. We worked on three-month contracting trips all over the place and came back to Whangarei. I eventually got job offers from Auckland, but at the time, I wanted to stay in Whangarei. I thought the guys needed to have their rates increased compared to what others were getting around the country.

I decided to approach the local PSA Organiser, Mark Furey. He was a straight shooter, and after having a few words, he said he thought he could do something. Ten of us then joined the PSA and I became a delegate."