July222009
Cultivate Your Corporate Culture
Yesterday saw some pretty big TVA news. A consulting firm called McKenna Long & Aldridge released a report on the Authority’s organizational problems. TVA hired the firm for $2 million (a drop in the bucket compared to the spill’s cleanup costs ) to issue an independent report on the problems that led to the Kingston coal plant spill in December. Unlike the report commissioned from AECOM to analyze the engineering problems behind the spill—which pretty much said the wall breached due to unique and unforeseeable circumstances—this report was pretty harsh on the Authority. The “necessary systems, controls and culture were not in place” to manage TVA’s coal plants in the first place, it said, and TVA lacked “any standard procedures regarding operation and maintenance of wet-ash ponds.” In addition, one of the firm’s consultants explained, “there was no comprehensive plan agreed to and executed by all the people that needed to make sure a Kingston spill would not occur.” “By the time the Kingston spill occurred, there had been decades of neglect,” he added.
[Tom Kilgore (left) with TN governor Phil Bredesen at the Kingston spill site.]
The TVA board was anxious to show it was listening. “It has become clear to the Board that a real change in the current way that TVA operates is needed,” said Mike Duncan, TVA Chairman, in response to the report. Tom Kilgore, TVA President and CEO, called the report “tough medicine.” “But we take it, because we know we need to get better,” he added. Earlier assessments of the spill tended to characterize it as an independent, random event, but now TVA seems to be taking a different tone. Kilgore said the spill cannot “simply be dismissed as ‘one of those things.’ Instead, we recognize the Kingston spill as a wakeup call.”
So what are they going to do? First, TVA is going to hire another outside firm to advise them on how to fix their managerial problems. One step they’ve already taken is to hire David Mould, a former PR administrator for NASA, to act as senior vice president of communications. Maybe most importantly, the board said a plan addressing the issues outlined in the report would be presented by its next meeting on August 20, less than a month away.
Congress restructured the TVA board three years ago, in an attempt to improve its management and make it act more like other corporations of its size and power. Is this report proof that the restructuring didn’t work? How effective will these new self-imposed changes be? We’ll have to wait to find out.
