Client case study: How OVO Energy maintained agility at scale
“The larger an organisation, the more time and energy people spend telling everybody what's going on, rather than actually doing more of it. There can be an enormous cost to information sharing — much higher than people realise."
Stephen Fitzpatrick, OVO Energy Founder and Just3Things Co-founder
In rapidly changing, uncertain environments, startups and small businesses can often adapt quickly, while many large enterprises struggle despite their vastly superior resources. Business leaders have known this for years and attempted to make their organisations more adaptable and responsive. But most transformations fail, becoming just another activity and expense without producing meaningful results.
In the post-COVID world, more than ever, large organisations need the ability to adapt quickly. Changing how work is done means finding a new way to more effectively manage teams and keep them aligned and engaged.
Businesses are caught in a no-win situation. Most stick with the standard model of teams separated into function-based silos, controlled from above and encumbered by numerous dependencies. Most workers don’t know what their company’s goals are, and even less know how their own work fits in with those goals.
On the other hand, companies that try to become more Agile by creating cross-functional independent teams find that they struggle to maintain alignment. Each team may be more productive and adaptive, but the company as a whole lacks cohesion.
But what if large companies could truly achieve the flexibility of startups AND maintain alignment among its teams to achieve company-wide goals?
That is the journey OVO Energy has been on for many years, and it’s how Just3Things was born.
How can large companies can have the flexibility of a startup?
It's easier than it may seem:
- Define where the company wants to go and what it wants to achieve.
- Empower teams to focus on what matters without controlling their daily activities.
- Track team progress and transparently provide them with real data so they can adapt quickly.
But how do we know the system actually works?
Because the original version was created by OVO’s leaders, who were in the process of solving real problems of rapid growth in a fast-changing market.
Back in 2013, OVO Energy found itself losing the capabilities that had made it successful as a startup. CEO Stephen Fitzpatrick and then Chief People Officer Kim Atherton (now CEO of Just3Things), developed Just3Things as a key solution that enabled the company to reach the £billion mark and beyond, while keeping the agility and human-centred culture of a startup.
Along the way, they faced an array of challenges and discovered some amazing secrets that can help any company thrive in the rapidly changing and uncertain markets of today and the future. Just3Things is built on those principles. This is our story…
Scaling an industry-disrupting business: OVO Energy
OVO Energy is today one of the UK’s top energy companies, having grown from zero to a £1billion+ valuation in just 10 years. And in 2019, it took over Scottish and Southern Energy, a former incumbent that had been one of the UK’s Big Six energy providers, and had a valuation over 10 times higher than OVO’s at time of purchase.
It achieved this feat through innovation on multiple fronts:
- Pivoting from energy retail into energy technology
- Investing in emerging green technology
- Launching into overseas markets, including France, Italy, Spain, and Australia
It has evolved from a simple energy retailer to a company focused on decarbonising people’s homes, and the energy industry as a whole.
The origins of OVO’s success
Stephen Fitzpatrick started OVO in 2009, seeing that the UK’s energy industry was plagued by legacy practices that left customers dissatisfied but stuck with no real choice. As the concept of customer-focused business gained traction in other industries, the Big Six energy companies in the UX ruled their market on the strength of their infrastructure. It was all about the assets - the power stations and networks. They were, however, known for poor customer service and one-sided policies.
There were three advantages that helped OVO rise rapidly in the market.
1. A strong vision
The original aim for OVO was to create a customer-focused, green energy company—a better, cleaner, simpler, fairer company. It started as an enthusiastic but humble reseller of kilowatt hours to consumers.
2. Solving problems quickly
Fitzpatrick liked to say the company was “Agile” before he really knew what that meant. The company was also resource-constrained, and so became very resourceful and hyper focused on what really mattered. “That necessity of being frugal, meant that we can only really afford to build the thing that was right in front of us,” he said.
For example, at one point OVO’s leaders were going to appear on a UK TV show, which would lead to a surge in customer calls. But there were only 25 people in the contact centre. Realising they wouldn’t be able to handle the load, the company trained every single staff member within 24 hours to help with answering customer calls.
3. Human-focused culture
“We were really good at remembering the human context of the decisions we made. We were very close to customers and to the employees,” Fitzpatrick explained. In one early example, he and his management team helped a customer service rep with a car loan after she lost her transportation to work.
The initial concept worked and the company grew quickly, but soon it faced challenges stemming both from that growth as well as from a variety of changes in the market.
Facing rapid changes
Kim Atherton joined the OVO team in 2012, at a time when the company had grown to roughly 50 employees and was facing a variety of external pressures, making it increasingly difficult to predict the company’s growth rate.
OVO was in a position where new competitors were streaming into the market. Price warfare to acquire customers meant margins were in the negative, and household energy usage was declining. Meanwhile, consumer expectations for service and interaction were going up.
“A number of factors were coming together to show us we couldn’t just carry on being a contact centre business that was really nice to everyone. There were lots of others now doing that who had substantial funding to play the price game and try to force us out. The only way that we could compete was to pivot to be more of a tech company and allow customers to self-serve more, which would keep our costs down and allow us to charge less.”
Kim Atherton, then OVO Energy CPO
Technological opportunities and new challenges
If all of that wasn't complex enough, there were technological changes in the industry. Up until about 2014, almost all energy suppliers operated under the model of getting one data point every three-six months, typically with meter readings provided by their customers. With the advent of smart meters, that changed to 17,500 data points per person per year, and eventually to millions of data points.
The British government created an initiative to get every household fitted with a smart meter within a few years, which generated a massive upsurge in smart meter usage.
“All of a sudden, systems we were using to manage consumption were no longer fit for purpose because of the amount of data that was now available.”
New opportunities in green energy, for example electric vehicles, were poised to expand enormously, and smart appliances were proliferating. These developments aligned with OVO's company values, but they would have to evolve in order to act on such opportunities and truly push a green agenda in a financially viable way.
As a rapidly scaling company in this dynamic environment, OVO also faced organisational challenges related to its growth. Early on, 300% annual growth was relatively easy to manage. But once it reached a certain threshold, that kind of growth came with massive implications, from new management layers and training programs, to new regulatory and financial requirements.
1. Loss of Connection
Due to the company’s rapid growth, it experienced a loss of a common identity and the ability to connect as humans. There were simply too many people to maintain the close sense of connection that had previously existed. And expanding the number of teams in order to act on the various opportunities also led to differing priorities.
Additionally, the fundamentals of company culture were becoming diluted. For the first few years, the team got by on verbal transmission of the company’s values, mission, and vision from its many long-term employees to newer team members. As the team scaled, people were increasingly learning those foundational components of the company second- and third-hand.
“You lose that sense of common vision, common culture, and purpose, and then also common priorities. But then again, when we started to write things down, what we found was everything was becoming highly centralised and very rigid. You start to take away people's ability to interpret and apply context to their decision making.”
2. Planning challenges
Some of OVO’s previous strengths no longer supported its goals and required adapting. For example, being great at problem solving became much less important than avoiding problems through planning.
“Really fast growth at a larger scale meant that we needed to start planning further out, and that meant a high degree of centralisation. But because we were operating in a highly uncertain environment with lots of competition and regulatory change, it was impossible to have certainty over a long time. So we were torn between, do we just abandon any attempt to plan this far out? Or are we going to have 12- or 24-month business plans, but then constantly re-forecast them?”
With new layers of management, and over 500 people split into team silos, information sharing became like its own cottage-industry, taking excessive time from doing actual work.
“To gather all the information about what all the teams were doing, feed it into a decision-making framework and then send it back took about half the time that they were supposed to be doing the work. It would take us two or three months to prioritise six months' work. We were still growing, but we were expending tremendous energy with internal processes, trying to communicate across multiple offices, levels of seniority, and levels of experience.”
It created an enormous leadership overhead, while failing to provide a link between outputs (projects, features, initiatives) and outcomes (business goals). Fitzpatrick and Atherton recognised that the common practice of measuring success in terms of output was not working for OVO.
“A typical large company celebrates success based on volume of activity, even if the activity is not taking it closer to its goal. And that's a really hard habit to break,”
“One of the core issues in a large organisation (as opposed to a startup) is that everyone has their pet project. There’s a lot of congratulating each other for completion, but then the numbers don't get hit because those projects don’t make an impact on company goals.”
The moment of truth
All of these challenges were causing significant problems, from project delays to needless expenses.
“I remember sitting at my desk and thinking, ‘How is it possible we just keep missing our deadlines?’ We’d set a goal, everybody would assure me we were on track, and then the last month before the project was due, someone would tell me, ‘Oh, actually, we're not on track' - every time! For example, this happened with the software needed to launch a product that our whole marketing campaign was built on. It ended up being late, but nobody had told the marketing team, so they'd already booked all the advertising.”
The situation was taking a toll on the team, and Fitzpatrick himself.
“I remembered how simple it had been when we were a younger and smaller organisation... and how effective I’d felt. We’d been so much more productive on a per person basis. The more people we hired, the less of a difference it seemed each new person made. It became exhausting, especially for me personally.”
It became obvious the current model wasn’t going to work, but the company still needed to innovate on a wide spectrum, integrating a variety of customer needs. It needed to have a breadth of activity but somehow efficiently organise the work. It needed to become ruthlessly goal-focused again.
Attempts at organisational transformation
Through reading, reflection, and consulting with experts in leadership and management, the OVO team rediscovered the ingredients that lead to people being more productive, motivated and happier, while also doing their best work:
- visibility over the impact of their work
- a team they trust, and
- a sense of control over what they’re doing and how it fits into the company’s goals
All of these elements are more natural in small teams yet harder to achieve in larger ones. So the OVO team began exploring ways to bring the strengths of startups back into their large and growing business.
Up to this point, OVO had operated as a single entity, like a large ship. It was one team with one organisational backlog to prioritise from. In order to move faster and focus on customer outcomes (not just deliverables), it needed to adopt the approach of agile-based software companies, operating more like a flotilla of smaller boats, through a network of smaller, independent (but aligned) teams.
By doing so, they hoped to better support innovation at scale. All would be pulling in the same direction, but each would have complete autonomy and control over solving their customer outcomes. They would therefore be able to adapt, iterate, and evolve more quickly.
And the transformation didn't just pertain to products and technology - it applied at an organisational level. Entirely different business units would focus on achieving customer outcomes for specific segments of the business. They reorganised the company into cross-functional product teams, each focused on a core customer problem.
Challenges of cultural and organisational change
At an all-hands meeting in 2014, when the company had about 1,000 employees, Atherton introduced this bold transformation for the way the company was organised. She and the Leadership Team envisioned that this new approach would free their teams from bureaucratic slow-downs and allow them to do their best work.
But it can be difficult to retrofit such a model, and it turned out there was insufficient understanding of how a cross-functional structure operates. A new set of challenges soon emerged.
1. Lack of communication and buy-in
“We underestimated the importance of communicating the vision both for the company and the organisational changes. OVO has a really strong and inspiring vision about decarbonising the world's energy industry as well as creating a great workplace. But we had a disconnect, with employees saying, ‘What’s the vision? We need to have it communicated.’”
At the same time, leaders struggled with the outcome-based approach because it radically changed their job description. They had to shift from assessing performance by the outputs of their teams, to supporting them in finding the best ways to achieve meaningful outcomes.
“It was probably easier for teams to take that change to being responsible for their conversion metrics. For leadership, it was actually a really big transition. Previously, their job was telling people what to do. Now we were asking them to work with teams to help create goals that lead to long-term success and support them in making experiments and bets that work out. That's a really big mindset shift.”
Ed Connolly - OVO CTO
There had to be a mindset shift at every level toward experimentation and accepting a "failure" as a necessary path toward learning and success. Teams needed to know that management wasn’t going to simply use outcome metrics as a way to judge performance and deal out punishment.
2. Alignment Issues
The company began facing issues:
- how to facilitate alignment of goals and activity;
- how to report progress;
- how to reduce duplication;
- and how to empower teams to deliver.
The senior team also had to find ways that they could help facilitate success; for example by procuring additional resources a team might need.
“We solved some of the productivity issues, but then we ended up with alignment issues. We’d discover multiple teams were working on the same challenge, or there’d be challenges that everybody thought somebody else was going to take care of and hadn't”
In some cases, the alignment issues even led to different teams within the company working toward outcomes that conflicted with each other.
“Our pay-monthly energy brand had customer metrics around reducing cost-to-serve. But then we had another team building a real-time billing system in order to take advantage of smart meter data. And their outcome was to migrate all of our customers onto the new billing platform. Of course, that is expensive, and it takes time. So we had two outcomes literally opposed to each other.”
3. Communication and technology gaps
OVO’s initial attempt at organisational transformation exacerbated this problem. One reason was that the technology to support the new way of working was missing.
Teams and leaders also needed access to the key metrics that showed how well progress was being made toward the desired outcome and which bets were working (or not). The HR system in use only showed the functional organisational structure, so it didn’t help people understand how work was actually getting done, who was working on what, or what the status of projects was. This contributed to the lack of clarity and alignment. HR transformation was going to be required.
For Fitzpatrick, the lack of systemisation was especially troubling.
“It was very difficult for me as a leader to know where to go to get all the information I need. And when I went looking, it’d be in various formats and in different systems. It would be designed in a way that made sense for the people involved in the day-to-day, but not accessible for management. So I’d have to email people and ask for information. But I often don't know the things that I don't know, so there would be questions that I didn’t know to ask. It was very difficult to surface information and share it, and that creates a real expense.”
Instead of improving people’s working life, employee satisfaction and engagement started declining. It became very difficult for people to understand who was on what team and what different teams were working on, especially across different locations. Employees complained of endless reporting taking up their time and making them feel that the senior team was losing faith in their work.
“I was really concerned, because people were overwhelmed by this rate of change and this new world, and we hadn't thought about giving them conditions that provided them with any level of transparency.”
The search for a solution
“Just3Things was born out of a frustration I had as a leader. I realised that in the early days I had felt so much more productive and focused, and I missed that. I wanted my life to be a lot simpler even though the organisation had grown so much.”
OVO needed a way for cross-functional teams to come together and set outcomes that all aligned and maintained a “golden thread” from strategy down to each level of activity. The idea was to have a uniform structure that would make it easy for people to choose their goals and focus on the right things, and then share the progress and information about their activity in a way that related to company goals.
Atherton looked to find a platform to enable people to share and see that information easily, but looking through the lens of her background in occupational psychology, she couldn’t find one that suited the company’s needs.
“There were a couple of solutions on the market or in development, but they were very focused on individual performance reviews and goal setting for the sole purpose of achieving a particular performance score and bonus. I didn’t believe that was the right way to get the best from teams”
So she began to devise a customised system from the ground up. The initial goal was to clarify and communicate the company’s top priorities, and this was achieved in the most simplistic way possible - sticky notes on Fitzpatrick’s door for management to check!
Finding this simple innovation remarkably helpful, Atherton set about working with developers to create a basic version of a software system to address the information accessibility gaps across the organisation and help teams prioritise.
“We tried to make it easy for people and teams to choose what they were going to focus on, because we had a situation where teams would sign up to upwards of 15 priorities. This is where the name Just3things comes from. It is my very firm belief that number four on any list just doesn't get done.”
To make the system truly useful rather than adding more work to people’s routines, it had to pair with existing systems. Software teams and even commercial managers have varying preferences for which tools they use to organise themselves. Managers want their own reports in particular formats.
Just3Things was therefore designed to provide a common repository for company information in a format everyone can see and follow. It can link to all the various information sources individuals and teams are using. Managers who want their own reports in particular formats can still have them, while the organisation can access all the information in a universal format.
“It’s like a universal translator of progress! With some of our new features like the ability to follow OKRs and see updates and timelines of progress, I can easily see what's important to me. I just follow that team, and when they update their status, it goes into my timeline. I can track it in real time and it’s manageable, even though I've got 20 or 30 different teams that I'm following.”
He’s now able to see immediately when a status changes to indicate a project is going off-track. With that information he can inquire about how to support that team or make needed adjustments elsewhere. And he added:
“When things go well and succeed, it's super easy for me to drop a line and say congratulations. And it all happens in real time.”
Just3Things helped OVO to make its information sharing significantly faster and more efficient. The company cut down on time spent in meetings—planning work and cascading goals, as well as progress updates. It charted a 10% increase in productivity and operational savings of over £3 million.
Employee satisfaction improved. And the company went from 72nd to 20th in the Sunday Times “Best Places to Work.” In the survey, employees’ responses to questions about understanding the vision, their part in achieving it, and feeling that they had the tools and information to do their role improved significantly. 91% of respondents said that they believed their work made a valuable contribution to the organisation.
Using the platform has removed much of the overhead of constant update reports and progress meetings, which has become even more important with remote teams. It’s enabled OVO to unleash the power of its cross-functional teams to scale and innovate.
And it shows in the company’s results. For example, unlike other energy companies in the UK market, OVO has consistently met its required smart meter rollout targets.
Some final tips from Stephen Fitzpatrick
Stephen shared some thoughts for enterprise leaders struggling with inefficiencies in a rapidly evolving global economy:
A lot of organisations focus on the activity of becoming more agile, without actually becoming agile. Forget about ‘agile transformation’ or any of the other buzzwords. Creating a company that can quickly and efficiently evolve and adapt at scale comes down to three things:
- Being ruthlessly goal-focused is 70% of the solution.
- Ensuring everybody understands the company vision and how their work fits into it is another 20%.
- And then eliminating dependencies between teams and creating a learning culture within those teams is the last 10%.
Find out how Just3Things can help your business create transparency and alignment to accelerate successful outcomes.