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1. The Case for Process
Excellence in Public Utilities
Robert Krall: Director for Continuous Business Excellence at Progress
Energy, joins PEX Network to discuss developments in Business Process
Excellence in the Utilities sector.
Contributor: Helen Winsor: View her Linked In Profile
Posted: 04/28/2011 12:00:00 AM EDT
PEX Network: First of all, could you tell me a little bit about your current role?
R Krall: I’m the Director for, what we call here is Continuous Business Excellence at
Progress Energy. I’m the Director for our generation business which is all of nuclear and
fossil generation within Progress Energy. CBE is our application of Lean and Six Sigma
tools to improve the processes in the generation business.
PEX Network: Can you tell us a little about how Continuous Business Excellence fits
into the culture and operations at Progress?
R Krall: It is a corporate-wide initiative and each of our businesses are at different start
points, but as far as my business in generation this is pretty much wrapped into our culture
of how we do our maintenance and our operations, and a lot of that has to do with training
and, really, the other part has to do with how we incent people too, and other change efforts
that folks have gone through in some other companies, we’ve learned that the best way to
go out there and touch people is to put it into their performance goals and it seems to stick a
little better.
PEX Network: Yes, I can see that’s a really efficient way of doing it. You’re speaking
at the conference about making business case for change. Why is process excellence
so important to you at Progress?
R Krall: It’s important to us because I think in the past, we’re a regulated utility here in the
United States, and there has been not a lot of pressure for us to be cost competitive like
some other folks that have used these tools, manufacturing, aerospace, but that’s changed.
I’m here in Florida and we have State regulators that are starting to scrutinise fuel spending,
operational spending, our capital projects, so there is now this influence from outside that
our regulators are pushing us to be better. Plus, if you think about the age of our fleet, the
condition of our equipment, these are just good process tools that we’ve seen other people
like the United States Air Force and the aerospace companies use and use to a good
amount of success.

2. PEX Network: Breaking it down then, what are the factors that make it so difficult to
build a case for process excellence in a regulated utility?
R Krall: In the past there wasn’t really a competitive pressure. In many cases people think
of it as a monopoly even though it isn’t because we still can lose a community based on the
way that they charter our businesses, but it’s been difficult in that they’ve never really
thought of themselves as somebody that has to look at their costs and manage their
budgets well. If you look at most of our leaders they’re extremely technically competent.
They know their equipment, they know how to maintain it, how to operate it, how to get
through outages in the least amount of time, but they haven’t really been good at managing
cost. Cost and time pretty much go together in the lean world and our set of tools has
helped them work with and be able to apply tools to improve themselves.
PEX Network: And what do you think are the key factors to gaining effective
sponsorship?
R Krall: One, there has to be a good corporate sponsor, someone pretty high up in your
executive staff has to be a sponsor. The CEO for our company is a sponsor but initially we
had to win him over and we won him over through results, focusing on quick wins, focusing
on the energy that comes out of Kaizen type events and the engagement with the
employees and actually showing financial and operational improvements in a short amount
of time.
PEX Network: To give a bit of a case study for our audience, can you give some
examples of initiatives that have caused your success in embedding Process
Excellence at Progress?
R Krall: One of the things that this industry does on a regular basis is something called
outages and anybody that’s in the utility businesses understands the concept. It’s where we
go in and do major capital improvements on our equipment on a periodic basis to make sure
that they can operate at the level of continuity that we expect out of it. We’ve used our tools
to help analyse and improve these outage processes in specific projects, specific
operations, and we’re able to guarantee fidelity through the use of things like standard work,
pointer use tools success, pretty simple Lean tools that have been able to yield a lot of
payback and really predictability out of being able to hit an outage time, hit it on budget, and
there’re a couple of outages we’ve used these tools in and had great success with in the
past year or so.
PEX Network: Finally, what top tips can offer to utilities trying to avoid the common
pitfalls of Process Excellence? If you can maybe break it down into your top three or
top five tips.
R Krall: Top tips: in order for us to be successful we really needed that, we already talked
about it, that executive sponsorship was critical. The second was probably how we went out

3. and chose our Lean experts. We call them CB Leaders. We went out and tapped people
that were already credible leaders in the organisation, so of our first group of about eight CB
Leaders in the generation business, three of them were plant managers, the balance of
them were either operations or maintenance superintendents, so these were folks that were
pretty high in the organisation that had instant credibility, and on top of that we had a pretty
good, I would call, a pretty comprehensive training programme to get them up to speed with
the tools and facilitation requirements. That was, pick the right people and have a good
fundamental training programme to get them up to speed. The other part was a lot of good
coaching, and the coaching isn’t just for your CB Leaders or your Lean or Six Sigma
experts, it’s also coaching for the leadership; how do they use these tools, how do they
support people in these Kaizen Events and what are the things they should say and what
should they be looking for? So, the coaching goes both ways up and down the chain of
command, with your leaders, your staff of experts and also with your leadership on how they
should use the tools. And I think, lastly, is you go for those quick wins, what you had asked
earlier. If you can show that there’s value in this and that you can make an impact
everybody gets excited about it.
PEX Network: Now, finally, what do you think is going to be the key themes and
discussion points to come out of this year’s event?
R Krall: What we just talked about. I’ll give you some specific examples. At least in my part
of the session, I’ve got at least one example where we go into detail of how we’ve improved
one of our processes. In any coal-fired power plant there’s a thing called a polariser. I use
that as an example to highlight all the points we just talked about; quick wins, using the right
people, the right training. I think we wrap it all up and at least show where it works in one of
our plants and show some credibility in it.
PEX Network: I look forward to hearing more at the event. It sounds like it’s going to
be an excellent presentation with a lot to think about. Thanks very much for your
time today to talk to us.
R Krall: Thank you very much for the opportunity.
About Process Excellence Network
Process Excellence Network is a free to join online community, providing critical knowledge
on the development of Process Excellence including Business Process Management (BPM),
Lean, Change Management, Operational Excellence, Six Sigma, Risk Management,
Customer Experience and more. We provide the forum where key industry experts and
organizations share their experience, knowledge and tools, and your practitioner peers
connect with one another all over the world, both face-to-face and online. Membership is
free, the content is priceless.
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