TSO CWU Forum

1. TSO CWU Forum 3rd June 2013

2. Agenda • Welcome & Introductions • TSO Resourcing • People Picture • Lean & CI Update • GIS Update • OOH • Contractual Location • Project Star • Change Improvement Team

3. The BT Way: Continuous Improvement & Lean TSO Forum 3rd June 2013

4. The story so far… • The BT Way for Continuous Improvement is part of Organisational Health and is a zone within the Leadership and Core Skills faculty of the ‘BT Academy’ • The approach has been developed with lessons learned from pilots undertaken during 2012/ 2013 and also various line of business (LoB) Lean initiatives • Group level, Union consultation for Organisational Health took place last year. At a group level consultation for the core messages and principles of Continuous Improvement, and at a local level consultation based on operational drivers. This engagement is on-going, with the next consultation with CWU and Prospect planned for early May at a group level • LoB level Union engagement is currently underway, led by LoB Employee Relations managers supported by Group Heads of CI from the central CI team • Local teams are leading Union engagement at a local level, supported by their respective Senior CI Coaches as subject matter experts

5. Key Differences - BTO Lean Service to Continuous Improvement Lean Service Wave Execution (16 wks) Wave Mandate (3 wks) Mobilisation Planning (8 wks) Mobilisation (3 wks) Wave Benefits (4 wks) Post Wave (On-going) Continuous Improvement Wave Mandate Mobilisation Wave Execution Implementation Phase Post Wave 12 weeks 4 weeks 4 weeks 8 weeks On-going

6. The bigger picture Performance Health • To embed a consistent Continuous Improvement culture based on Lean/Sigma principles across all of BT by coaching managers and their teams • To change the management context for these teams to support Continuous Improvement by working with the leadership team and HR • To drive Continuous Improvement across all of BT for the benefit of our customers CI is co-sponsored by Transformation and Group Learning – delivered through the Academy and aligned to Organisational Health and the new BT Values

7. 3 objectives of Continuous Improvement 3 objectives of Continuous Improvement Customer A better customer experience We’ll get a better understanding of what our customers want through the Voice of the Customer dialogue. This will help us to deliver a better customer experience. Customer Cost Our financial goals We'll be able to use Lean, Change and Six Sigma methodology to help us meet our financial goals. People CI Cost Time People Improved employee engagement Lean, Change and Six Sigma ways of working will engage our people, and will empower them to be involved in how we get better This is about how we improve things in BT for our people, our customers and our business

8. What is a 12 week wave? 12 weeks Continuous Improvement Wave Wave Mandate Mobilisation Establish customer focused performance dialogue and team based problem solving Understand and drive value in the value stream Manage capacity and implement enblers for implementation Implementation Phase Post Wave 4 weeks 4 weeks 4 weeks 4 weeks 4 weeks 8 weeks On-going The Wave is the 12 week deployment of Continuous Improvement In addition to this 12 weeks there are 8 weeks before and 8 weeks after the wave For the 12 weeks in blue below the teams involved will benefit from dedicated coaching This 12 weeks is split into 3 phases:

9. How do we deliver these objectives? We talk to the customer often to understand what they need. Everyone in the team understands the customer’s needs, and we measure how well we meet them. We understand how to use our resources to meet the customer’s requirements. We close the gap between demand and resource in time to meet our customer’s expectations without adding cost. We understand what is expected of us. We have a plan in place to build any skills we need. We get to use all our talents. We manage our own work, and call on help from our manager when we need it. Our manager is visible in the workplace. She reinforces strategy, designs brilliant processes, and coaches us on problem solving. We improve continuously to get the most value out of our processes. We know what good output is, and how to produce it. Our manager helps us follow agreed best practice. We all understand how our work helps achieve the wider goals of the business. We talk daily about how we’re doing and how we can do better. We never forget about the customer, we look at hard evidence and we do what it takes to improve. We always try to solve problems ourselves and as a team. We will pull on help when we need it. We use structured problem solving and are coached by an expert.

10. Customer Focussed The 12-Week wave - What can I expect to happen during each phase? Managing Capacity Empowered people We will establish performance dialogue and team based problem solving for the benefit of our customers We will understand and drive value in the value stream We will be better at managing capacity and making improvements continously 4 weeks 4 weeks 4 weeks We will create great performance dialogue As we understand our processes we review capacity planning We understand today Process Value Performance Dialogue Team Based Problem Solving and how we set job standards and objectives We will solve problems at all levels of the organisation and know where we want to be tomorrow And prepare for longer term BAU

11. Continuous Improvement – benefits expected from CI within TSO • Quality of service improvements providing increased customer centric service, through understanding the Voice of the Customer (VoC) and empowering teams to continuously improve service through using CI tools on a daily basis • Benefits to our people and organisational health through increased continuous improvement maturity. Teams work towards bronze accreditation with CI coaches helping them make Continuous Improvement ‘the way we do things round here’. We will see the impact of this through an increase in key CARE measures and an uplift in organisational health • Cost reduction through embedding CI a business unit will drive a reduction in TLR costs across the whole business unit through analysing their processes and ways of working, removing ‘wasteful’ activity and improving/ enhancing business critical processes • Additional opex cost benefits e.g. 3rd party contractor reductionsthrough applying CI tools and techniques within BT’s operations or through coaching our 3rd party partners in deploying CI tools Quality of service improvements • Embedding Continuous Improvement across TSO for the on-going benefit of our customers, our people and the TSO cost base • Empowering TSO teams to drive Continuous Improvement through coaching them on tools and techniques that help them improve their ways of working in a sustained way, increasing levels of engagement and the health of the organisation • Delivering TSO cost reductions through teams undertaking logical analysis of the ways of working and understanding their key processes, removing wasteful activity • Improving TSO quality of service by understanding the voice of our customers and by putting the customer at the heart of all we do 11

12. 13-14 Wave Year 1 Wave 1a (15th April) Wave 2a (5th August) Wave 3a (25th Nov) 3.1 Sub Wave 1.1 Marc de Wit, Global Network Ops (TNQ4) 129 FTE 2.1 Martin Greenan, ASM (TAP) Subcon Variant Waves Standard Wave 1.2 Martin Greenan, Operational SD (TAP11) Subcon 2.2 Peter Scott EUT & Security (c 200 FTE) 3.2 Sub Wave Wave 1a (22th April) Wave 2b (2nd September) Wave 3b (6th Jan) Standard Wave 1.3 Daryl Szebesta, Group CIO (TM) 141FTE 3.3 Sub Wave EIPB 2.3 Sub Wave EIPB Wave 1b (20th May) 3.4 Paul Holl Field Services (c 200 FTE) 2.4 Paul Holl Field Services (c 200 FTE) Standard Wave 3.5 Sub Wave 1.4 Mark Williamson EIPB 600 FTE 2.5 Sub Wave Standard Wave 3.6 Sub Wave 1.5 Paul Holl Field Services – 200 FTE FTE Scope = 1070 FTE FTE Scope = TBC FTE = TBC

13. Tools Explanation Job Satisfaction Survey The purpose of the Job Satisfaction survey is to gather ‘voice of the people’ data. As one of the objectives of CI is about empowering our people, we send the survey, which is totally anonymous, to everyone in scope, so we can base line what people feel about their jobs. The output is used at VSM week and more importantly redesign week. CI is not just about improving the day to day processes, it is also about supporting the people side – e.g.: an output may be equipping managers with coaching skills.   The survey then would be replicated 2 weeks after the WAVE closure to see what impact has been made in relation to how people feel about their jobs post wave Manager Activity Tracking, The purpose of this is for managers to record the activities and time taken to complete them, on a day to day basis for a sample period, then to think about if those activities add value to the process. The output gives managers the data to be able to challenge any non-value activity that takes them away from time with their teams / CI. We have found this useful on previous LEAN Waves, as sometime managers don’t realize the how much time some activities take. Please note this is about the specific activity-process, not the individual who is carrying out the activity. Data Capturing Mechanism, This is a simple excel spreadsheet which is used to capture process data to help understand the level of waste within the process. Please note this is about the specific activity-process, not the individual who is carrying out the activity. Initial Data Collection, The teams were asked to think about collecting volume data for the processes in scope, a simple spreadsheet was provided to help gather this data. Virtual Performance Board All teams have a performance board to enable daily conversations which help to understand how they can improve all aspects of the process, customer and employee experience. An example of a performance board in on the next page.

14. Performance Board Definition: • Performance Boards are the dashboards for our business • Our performance against our Customers needs should be visible & known by all • We review these measures at the intervals at which we can control them and we do this in a consistent and disciplined way • Boards can be both virtual and physical as suits the environment

15. Global Infrastructure Services TSO Forum 3rd June 2013

16. Overview of our structure & leadership team Leigh Bennett MD David Butcher Datacentres Tom Wyman Power Paul Holl Field Services Lisa Neale Commercial and Business Ops TSA TSC TSF TSG Paul Weir Chief Engineer & Transmission Richard Tarboton Energy and Carbon Mark Williamson Exchange Infrastructure Plan and Build TSB TSD TSE

17. GIS has a clear purpose & strategy, aligned to TSO Our purpose …to work as a team with our customers to create and run an infrastructure environment on which excellent service is delivered Reliability with operational excellence Reduced power consumption year-on-year Internationally benchmarked on cost, service & quality Pride with self-motivated talented teams Innovative in infrastructure technology & perceived to be Cost transformationOperational Excellence, faultless delivery, lower input costs, less T+S Commercial managementContract management, planning & governance High-performing teamResource planning, operating model, capability development, good management 17

18. We have ambitious 1-3 year goals which we need our people’s help with Our purpose …to work as a team with our customers to create and run an infrastructure environment on which excellent service is delivered Reliability Energy Cost, service & quality Pride Innovation Cost transformationOperational Excellence, faultless delivery, lower input costs, less T+S Technology innovation & best practice Care >4 50% fewer power incidents 30% (£120m by 2020) less energy TopQuartile Commercial managementContract management, planning & governance High-performing teamResource planning, operating model, capability development, good management 18

19. The year ahead –our challenges • What’s New • BT-Sport • 4G Licences • Service • Customer Experience • Right first time (RFT) • Faults and Cycle Time • Challenged by: • Economic profile of GIS • “Prove it” Leaders stand-up • Space to lead • The Science bit: • Education and learning • ALP’s • Accountability • Performance boards • What’s Hot: • IT Provision • Firewalls / Security • Power

20. How we are focussing on lifting engagement • Reinforcement plan for Lean / Continuous Improvement, to continuously build on initial successes and embed changes in ways of working & leadership • Space to Lead – Field Services & Datacentres. Organisations progressing to achieve greater clarity. DCs building empowerment into the design process – involvement & interaction

21. Field Services: OOH Working in Power Transmission & SwitchChris Pollard GM, Field Services Operations, TSO GIS Forum 3rd June 2013

22. Problem statement • During Jan – Mar 2013 there were 5721 call outs (c.1900 a month) • Of the c.1000 engineers in the TSO Field Services Power and Internal Switch & Transmission work streams, 804 were on call out lists and were asked to attend a call out. • High burden being placed on a small number of engineers resulting in potential health & wellbeing risks and breaches to the European Working Time Directive • A vast number of phone calls and escalations have to be made in securing volunteers, which is disruptive during unsociable hours for engineers and managers involved • Feedback from the engineering forums is that this is unfair and they support spreading the demand across all engineers

23. Impact • There have been many major service outages over the last 12 months that took longer than they should have to resolve due to call out difficulties. • Two attracted significant media attention and were brand damaging: London Pimlico – Aug 2012 (during Olympics) • Issue: Excessive heat in the exchange caused switch equipment to fail • Impact: Loss of resilience – same issue could have caused loss of service. • Call Out: Call out lists exhausted through not available / no replies. Escalated to GM level. Eventually got an engineer out after over 5 hours. London Bayswater – Aug 2012 (during Olympics) • Issue: Excessive heat in the exchange caused switch equipment to fail • Impact: 30,891 PSTN end users were affected for 4 hours 41 mins • Call Out: Call out lists exhausted through not available / no replies. Escalated to GM level. Eventually got an engineer out after c.4 hours. • With the launch of BT Sport and supporting TV offerings, any delay in fault resolution will have a significant impact to the business.

24. Proposal • 29% of Team Members are currently on formal call-out ( 63 on formal contractual &184 formal voluntary) with varying degrees of attendance & commitment • Propose to have to 23% of Team Members (196) on formal contractual arrangements with 1-4 week commitment • Monthly allowance of £296 for all those on call • Ensures we are WTD compliant moving forward as call out will be more evenly shared. • A key customer benefit is radical reduction in engineer response time on outages by cutting current 5-7 attempts to achieving call out at 1st response. • his proposal means we can effectively future proof risk to our business.

25. Breakdown by Region & Function SOM patch

26. Radio & Rigging • Currently under review • Need further analysis of potential impact of Radio to Cab & 4G • Will comeback in due course with proposals which will be based on addressing any foreseeable risk by future proofing via contractual OOH proposals

27. Selection Arrangements & Timeframe • Seek volunteers for 133 from existing 252 pool • If insufficient volunteers open up opportunity to remainder of 640 workforce. • Thereafter look outside of Field Services to bring in people willing to work contractual call out. • Consult and engage employees week commencing 20th May • New arrangements to be in place by 1st July 2013 in preparation for BT Sport launch

28. Project Star TSO Forum 3rd June 2013

29. What's the issue? • Engineering Roles in Field Services are not clearly defined. • There are 5 job descriptions that outline expectations of a D1, C3, C1 and B2 with a separate document for Power C3 • These job descriptions are not widely acknowledged. Instead, engineers tend to see their role as specific to the workstream they predominantly work on. For example, Switch & Transmission and Radio & Rigging. • Inhibits flexibility – people don’t want to move onto other work, and there’s a lack of direction to up-skill + no clear career path • leads to strong feelings of unfairness – people resent training people of a higher grade. People feel they are doing work that is of a higher grade than they are, but difficult to make a case for promotion • No clear peer group comparators for identifying role models, high performers or those requiring extra support • Every workstream has engineers of different grades. Just in the three workstreams in TSO there is B2, C1, C2, C3 and D1 graded engineers • Set out below is a table showing grade distribution of staff in each workstream:

30. Goals of the grading review GOALS Clearly defined agile roles with logical career path(s) through the roles/grade levels • All engineers appointed into one of the new roles • Maintain or improve flexibility of deployment of engineers onto jobs (reduce resistance to what is currently considered non-standard work) • Effective governance process for new work / technology and promotion to higher grades ROOT CAUSE ANALYSIS • It was identified that some team members in the same workstreams but at different grades are completing the same work • Engineers are recruited into the team or workstream with no change to their grade due to the lack of planning, ad hoc decisions and potential costs • New work is taken on and given to teams with little or no thought to whether it is appropriate to the grade, or in line with a longer term plan • Things which are done temporarily e.g. additional resource on a type of work to meet increased demand, become permanent, and there are no periodic reviews of whether current work-role-grade is appropriate • Career paths not seen as a priority SUMMARY Establish the appropriate grades for the work performed across Field Services and address anomalies Create a fit between New Grid grades and future skill demand in Field (e.g. multi-skilling)

31. Our Approach • 1. Review current field position and address anomalies in Internal & Power Units • 2. Review more complex grading arrangements within Radio and Rigging to ensure alignment with similar roles across Field Engineering • 3. Future proof Grading of Field Member roles with a clear link to agile working, Skills Demand & Personal development • Introduce a structured process for recruiting and promoting people • Develop a career pathway for MAs and other new joiners as well as existing staff so we can stimulate and develop talent • Introduce structured development plans within each workstream and/or across workstreams

32. Timeline

33. Field Services - Change & Improvement team TSO Forum 3rd June 2013

34. Inspiring Proud Field ServicesWe Make Change Happen……. Business Operations Change Who are my team? 14 FTE… Doesn’t sound a lot in Field Service terms but it’s a huge Team to make transformation happen Change Engagement Create a High Performing Environment Process? Systems? Lessons Learnt from the Past! Governance ….. Know your numbers I need a Winning Organisation Pride of Patch Engagement is key….. Insourcing ? Projects shift left throughout The year showing progress Who is doing what and when…Accountability … to meet our Care targets Delivering a sustainable all Involving transformation programme Such as TV’s .. …. And celebrate Our Successes !!!! Pride of Patch Field & EIPB