Implementing the process of strategy execution premium (“XPP”)
The Laguna Verde Nuclear Power Plant is located on the coast of the Gulf of Mexico, in Alto Lucero, Veracruz, Mexico. It is the largest nuclear power plant in Mexico with an installed capacity of 1610 Mega Watts (MW), equivalent to 4% of the annual national electricity production demand. The plant consists of two units of boiling water reactors and employs 1250 employees.
The parastatal nature of the Laguna Verde Nuclear plant and its importance to the whole Mexican society have made the benefits it brings to Mexican society and environmental protection very important issues.
To secure these, the Laguna Verde plant decided to upgrade from a nearsighted reactive management approach to one based on strategic direction. This required defining and formulating a strategy. As one of the project team members recalls: “Otherwise we would be doomed to stay as a reactive organization with operational staff bound to nearsightedness”.
Balanced Scorecard methodology was selected as the foundation of Laguna Verde’s comprehensive Strategy Management System as it included the key performance indexes (or KPIs) needed for better focusing on priorities, environmental protection, budget management, and defining the long-term business goals.
Also, internal capabilities needed to be improved for clarifying the strategic goals and for converting them into concrete actions understandable to the staff. Of particular importance was to identify the key areas for achieving the targets. This way the resources and activities could be allocated correctly.
From strategy map creation to linking budget to strategy
The work was started on building a strategy management system to help the nuclear plant achieve organizational effectiveness through excellence in implementing its key processes and to support achieving staff alignment. A strategic map was developed for visualizing the causal relationships between the expected benefits and the actions necessary to achieve them. This map proved to be valuable when mobilizing the organization.
The commitment of the Plants’ senior management to the strategy work right from the strategy definition, up to monitoring it, as well as prioritizing initiatives and projects and their active participation in strategy analysis meetings was a key success factor. The management acted as the main promoter of the strategy by communicating clear goals, following deviations, and reacting promptly to any unwanted situation. They also contributed to implementing the real-time process metrics providing data for the strategic indicators.
The Laguna Verde Nuclear Power Plant was selected as one of the 2014 winners of the Palladium Balanced Scorecard Hall of Fame for Executing Strategy. (From left) Mr. Luis Martínez Portilla, Head of the Coordination and Liaison of the Management of Nuclear Power Plants, Comisión Federal de Electricidad (CFE); Dr. David P. Norton co-creator of the Balanced Scorecard methodology; Agustín Lozano Laez, Manager of nuclear power stations in the CFE; Martin Nuricumbo, Managing Director of NG Business Value, QPR Value-Added-Reseller in Mexico and Dr. Robert Kaplan, co-creator of the BSC methodology at the award ceremony.
The 18-month-long project can be divided into the following main steps:
- Creating the strategy map, February 2012;
- Developing the first balanced scorecard, April 2012;
- Communicating strategy (BSC) to employees, April 2012;
- Delivering the first BSC report, in June 2012;
- Aligning compensation plan to strategy, July 2012;
- Cascading strategy to business units, February 2013;
- Cascading strategy to support units, June 2013:
- Presenting reports on BSC to the Board of Directors, June 2013;
- Linking budget to strategy, July 2013.
Some of Laguna Verde employees who started with the project were: Agustín Lozano Laez, Manager; Jorge Cardenas Jauregui, Deputy Manager of Operations; Luis Martínez Portilla Chief of UCV, Fernando Jaime Solis, Deputy Nuclear Safety; Alejandro Martínez Hernández, Administrative Deputy Manager; Paul Chama Miron, Deputy Manager of Production; Elesvan José Ríos, Deputy Manager of Maintenance; and Joel Méndez García, Deputy Manager of Services.
Processes managed and monitored with QPR
QPR Suite is the institutional tool for managing and monitoring processes and their indicators of the Laguna Verde Nuclear Power Plant. QPR Metrics performance management software and QPR ProcessDesigner process modeling software were chosen as certified tools, for their rapid implementation, short learning curve, scalability, easy maintenance, and multi-user and user-friendly tool.
As the QPR tools are very friendly to use, creating balanced scorecards, strategy maps, and process models and designing dashboards with them is very easy. Thanks to this QPR tools are used for defining and measuring strategic indicators and operational planning of the Laguna Verde nuclear power plant. The tools are also used for monitoring and reporting indicators to regulatory organizations of the World Nuclear Industry and process owners.
Strategy deployment exercise is done periodically to update the strategy map and to identify how each functional area is contributing to the new strategic objectives. The strategic planning process within the management system is documented and kept up to date.
Regular review meetings are carried out for evaluating the process performance, how achieving objectives is progressing, and how the strategic projects are carried out. These reviews cover both strategic management and managing operations.
Briefing book view showing Laguna Verde nuclear plant’s compliance with World Association of Nuclear Operators (WANO) requirements.
Benefits achieved and future actions
With the help of QPR powered Strategy Management System, the entire Laguna Verde Plants staff is now focused on strategy and operational deployment of the strategic objectives. Already in the first year key performance indicator targets were reached. The plants rose from Level 3 to Level 2 of excellence, as assessed by WANO (World Association of Nuclear Operators).
The main achievements of the project can be summarized as the following ones:
- The total alignment of objectives, indicators, and strategic projects.
- Modeling more than 500 indicators.
- Accessibility, timeliness, and availability of (real-time) information for evaluating the strategic direction and decision-making by facilitating the development board of directors.
- Design boards of performance indicators and processes for different organizational perspectives and/or functional areas.
- Special reports according to specific requirements.
- Integration with a continuous improvement system (PAC) for the control and monitoring of actions.
- Contributes to organizational knowledge.
QPR Metrics help to understand how work is supporting achieving organizational objectives. Possible deviations are detected and corrected in strategic analysis reviews. Success in achieving strategic objectives, process improvement, and how key processes align with the strategy are reviewed periodically.
Laguna Verde has now defined its strategic portfolio and prioritized projects included in the 2014 -2020 business plan. The plans include implementing a System of Human Capital for aligning strategy, automating the integration of information from ERP (SAP / R3) to QPR Metrics, completing the Business Process Modeling BPM initiative with QPR ProcessDesigner, and completing Government Initiative Business Process.
The Plant was selected as the 2014 winner of the Palladium Balanced Scorecard Hall of Fame for Executing Strategy of doctors Kaplan and Norton from the extraordinary results it achieved in implementing the process of strategy execution premium (also known as the “XPP”).
In addition to Laguna Verde Nuclear Power Plant the following organizations using QPR-powered systems have been selected as Palladium Balanced Scorecard Hall of Fame for Executing Strategy winners:
- Abu Dhabi Sewerage Services Company (ADSSC)
- AKSA Acrylic Chemical Inc.
- Dubai Aluminum
- Dubai Airport Freezone
- Emirates Identity Authority
The home page of Laguna Verde Nuclear Plant’s QPR Portal process section shows (from the top down) the strategic, key, and support processes.
QPR Software Plc
QPR Software provides insight into business operations for successful strategy execution and operations improvement. QPR offers a comprehensive software suite and consulting services for modeling, analyzing, designing, and measuring operations, supporting agile business transformation. We are a global thought leader in business-driven enterprise architecture and process intelligence. QPR Software Plc was founded in 1991 and has its headquarters in Helsinki, Finland. As a publicly listed company, our shares are quoted on the NASDAQ OMX Helsinki Ltd.
NG Business Value, QPR’s Value-Added-Reseller in Mexico is a young company with extensive experience in the successful implementation of projects of Strategic Management, Process, and Risk in both the public and private sectors. Together with their strategic partners, they provide the best solutions market. Their management model is based on the best practices of international recognition, implemented in public and private world-class companies, focusing on the implementation of the strategy as a basis for Sustainability, generating long-term value, harmonizing Operational Excellence, synergizing with the different disciplines of performance measurement to generate returns in the short term. We achieve highly profitable implementations.
“With the help of our QPR-powered Strategy Management System, the entire Laguna Verde Plants staff is now focused on strategy and operational deployment of the strategic objectives. Already in the first year key performance indicator targets were reached. Our plant rose from Level 3 to Level 2 of excellence, as assessed by the World Association of Nuclear Operators.”
– Enginer Agustín Lozano Láez, the Manager of Laguna Verde Nuclear Power Plants –