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ARTICLE details
6/8/2012

Nuclear boss tells of challenge of “predictability”

Vital Topics 2012

The boss of the UK arm of nuclear company Urenco says creating an environment where people want to change in such a "thoroughly predictable" business has been the biggest challenge of his career.

Simon Bowen began a change management programme at Urenco's plant at Capenhurst, near Chester, after taking the helm 18 months ago. "When performance in a business is predictable and so strong it is easy to become complacent, not in critical things such as safety, but more in the way you run business because there is less of a challenge,” said Bowen. “How do you create an environment where people want to change? You have to create a bigger game for them where they understand what is possible."

Capenhurst enriches uranium for civil power generation by splitting two isotopes of uranium via a system of centrifuges, technology which customers are prepared to pay a premium for. The global business has an order book of 20billion Euros until 2025 and turned over 1.3billion Euros in 2011.

Against this backdrop why the need for change? Bowen said when he arrived he felt the focus on business rigour had room to improve. "I essentially said 'let's get this business fit for the future and give it a bit of a shake'."

Bowen said a particular issue was that because the business requires such highly technical staff it tended to be run by technical leaders. As such he put his 36 key managers through a change programme. "I essentially asked them to confront who they were as individuals. What people say is determined by the way they see the world and you have to create a whole new world of opportunity for them. It is about taking the shackles off and allowing people to see what is possible. We built the programme around reducing bureaucracy, organisational clarity, performance management and instilling a new culture. It was a case of confronting the current reality and looking at what we did and why we did it.”

Bowen says change management in business performance begins and ends with leadership, and without strong leadership you are never going to deliver change. "I have to lead with complete authenticity and the most important thing to me is the quality of leadership." Leading from the front meant living your values every minute of the day. "You must never allow your values to be compromised. For instance it would be no good if I was filling up for petrol on the way to work, got into an argument with someone at the pump and one of my workers then happened to see me shouting. My credibility would be shot just like that."

Meanwhile what may have been a thoroughly predictable business when he arrived isn't quite as predictable following the Fukushima nuclear accident last year and the subsequent retreat by many governments out of nuclear power, most notably Germany.

Added Bowen: "There is now more competition in the market for us and we will have to compete for sales as the supply chain becomes more challenging. In such a climate people also want to start renegotiating long-term contracts. But our long term contracts are tight and we will protect them fiercely."

Another challenge is a possible change of ownership of Urenco itself. Bowen confirmed that the company, jointly owned by the British and Dutch governments and German utilities Eon and RWE, is up for sale.

RWE is reported to want to increase its sell-off programme in the wake of the German government's decision to pull out of the nuclear energy market, while both Eon and RWE recently announced that they had dropped plans to build a series of new UK reactors. The UK government has also been looking at a sale of its stake in Urenco for a number of years.

Bowen said the UK government is "supportive about what we do" but is keen to see if they can get money from the sale. "It could offer an interesting dynamic to have a more commercial ownership of the company," he added. A sale into private hands could also raise the profile of Urenco significantly. Bowen admitted that the nuclear industry in general had been too closed and there was currently a drive to make it more open. "Nuclear is poor at publicising what it does and why it does it."

Phil Gamlen from Manchester Business School said one shouldn’t underestimate the challenge of bringing in such major organisational and cultural change when there didn’t appear to be an immediate threat to the business. However he echoed Bowen’s comments that the industry now faced a period of uncertainty. “The Fukushima accident has had a great impact, not least in the reviewing of the reactor technology that has taken place, but also in the public unease and hence political concern that has arisen around the world. Given the long timescales of an investment in this sector, political uncertainty makes strategic planning extremely problematic and, as Simon has indicated, this impacts not just market growth for a company like Urenco but also the ultimate ownership of this company.”

However Gamlen said that in spite of the global political volatility around investments in new nuclear generating capacity, the supply chain for nuclear power generation will continue to be a major wealth generator for the UK. “Nuclear power generation will inevitably be a part of any sustainable energy portfolio into the foreseeable future.” He added that the University of Manchester was itself well-placed to support the supply chain via its technical capability at the Dalton Nuclear Institute working in partnership with MBS' business and management expertise in the supply chain and operational management areas.

 

Watch Simon's interview >>