Success Stories » Hydro-Québec

CASE STUDY: Hydro-Québec

Profile of the Organization

Hydro-Québec is a government-owned public utility established in 1944 by the Government of Québec. Based in Montréal, the company is in charge of the generation, transmission and distribution of electricity across Quebec. With sixty hydroelectric and one nuclear generating stations, Hydro-Québec is the largest electricity generator in Canada and one of the world's largest hydroelectric generating company. The combined capacity of its power stations was 36,810 megawatts and its distribution network served over 3.96 million customers in 2009.

The development of several large-scale hydroelectric projects which took place non-stop from the late 1940s to the mid-1990s — the Bersimis, Carillon, Manic-Outardes, Churchill Falls and the two phases of the James Bay Project — allowed Québec to reduce its reliance on fossil fuels. In 2006, primary electricity accounted for 40.4% of all energy used in the province. However, the construction and operation of these projects has led to conflicts with Aboriginal populations living in Québec's North.

Services and/or goods provided
Hydro-Québec generates, transmits and distributes electricity, mainly using renewable energy sources, in particular hydroelectricity. It is one of the biggest electric utilities in North America. Its sole shareholder is the Québec government. Hydro-Québec is known worldwide for its expertise, mainly in the areas of hydroelectric generation and high–voltage transmission

Organization Structure
In 2000, the new regulatory framework governing the North American Power industry led HQ to adopt a new organizational structure with four divisions in order to adapt to current market conditions:

  • Hydro-Québec Production: generates power for the Québec market and sells its surpluses on wholesale markets. It is also active in arbitraging and purchase/resale transactions.
  • Hydro-Québec TransÉnergie operates the most extensive transmission system in North America for the benefit of customers inside and outside Québec.
  • Hydro-Québec Distribution provides Québecers with a reliable supply of electricity. To meet needs beyond the annual heritage pool which Hydro-Québec Production is obligated to supply at a fixed price, it mainly uses a tendering process. It also encourages its customers to make efficient use of electricity.
  • Hydro-Québec Équipement and Societe d’énergie de la Baie James (SEBJ), a subsidiary of Hydro-Québec, design, build and refurbish generation and transmission facilities, mainly for Hydro-Québec Production and Hydro-Québec TransÉnergie.

This structure promotes the concentration of leading-edge expertise in each of the divisions and gives each the flexibility to adjust to their particular business environments. Other components of the organization are the corporate groups: Technology (Hydro-Québec’s Research Institute, Telecommunication, IT), Finance, HR, Corporate Affairs and communication.

Human Resources

Hydro-Québec has approximately 23 000 employees broken down as follows:

  • 30.1% female
  • Rate of unionization: 85.2 %
  • Average age:  45.4 years with 19.4 years of service
  • Occupational groupings
    • 9. 4 % Management
    • 22.4 % Scientific/Specialist
    • 19.5 % Engineers and technicians
    • 21.9 % Clerical/Administrative
    • 26.8 % Trades

New Business Drivers and Major Workforce Risks

Hydro-Québec’s primary mission is to ensure the long-term supply of electric power in Québec. The focus is on continuing to develop its hydropower fleet and integrating a large volume of wind power into its transmission system. These renewables, combined with Hydro-Québec’s ongoing efforts in energy efficiency, form the basis of energy security in Québec and to continue developing Hydro-Québec’s export markets and to pave the way for a sustainable future through ground transportation electrification.

In the years 1998-2000, Hydro-Québec was focused on making changes in order to keep serving its customer well and continue growing in a fast, evolving industry. Hydro-Québec faced at the same time two major challenges that were rated (or considered) by the top management of the company as risks having the highest impact on business and a probability of occurrence higher than a low level of hydraulicity and the risk of climate change. These two risks were:

  • To hire and train another generation of employees to remain competitive and build on the often unique expertise developed by its experts in a variety of critical sectors, and
  • To improve the mobilization of the employees that was at that time at his lower level since HQ started an employee survey in the 1990.

A Corporate Approach to Knowledge Transfer

Knowledge Mobilization, Cultural Change and Manpower Renewal
To address the key business drivers and risks noted above Hydro-Québec developed a mobilization model that clarified the management style and the values that were expected from the managers and the employees. This model is outlined below.

Figure 1: Mobilization Model


In 2002, the HR function developed a corporate succession and expertise renewal management plan to address the following issues: 

  1. Major risk that expertise will be lost in the medium (2006) and long (2012) term;
  2. Recruitment difficulties in the medium (2006) and long (2012) term (also in the short term for outlying regions);
  3. Collective agreements lack flexibility with respect to large-scale hiring/staffing and high skill requirements;
  4. Weakness in competency management; and
  5. Renewal of Hydro-Québec's management team.

Figure 2 outlines the corporate Succession Support Plan.

Figure 2: Overview of Hydro-Québec’s Corporate Succession Support Plan

A Plan with Six Dimensions

The first two years were spent developing creating or improving tools to support the improvement of HR processes involved and in developing the competency management toolkit.

Situational Assessment
A critical first step was identifying the key business and workforce risk in relation to knowledge assets. This was done through workforce mapping and analysis to identify the jobs or positions that were most vulnerable considering 1) the projected retirement (projected dates calculated based on age and tenure data or on employees estimates/feedback when available); 2) a knowledge loss risk analysis based on the level of expertise and the rarity of the expertise of the job (position), the incumbent and availability both inside and outside the organization; 3) the estimate of the difficulty or level of effort to replace the job incumbent and to train and integrate him or the volume in hiring and or in training the new employees

As figure 3 shows, the situational assessment has given a better estimation of the proportion of vulnerable positions and of the effort to manage the replacement staffing. Hydro-Québec found that there were actually only a few job classifications that were contributing the most to the KT problem.

Figure 3: Identify Vulnerable Positions

Knowledge Transfer
After undertaking targeted knowledge mapping, Hydro-Québec found that there were actually only a few job classifications that were contributing the most to the problem and, in those cases, the knowledge was unique – developed within the company over many years; the loss of which would have a significant impact on the organization and its competitiveness. For the cases where the knowledge was at risk, a formal program was launched in 2002 to:

  • Identify experts and the knowledge at risk (importance, rarity, difficulty of recovery);
  • Finance advance staffing for strategic positions in order to facilitate the knowledge  capture and transfer of the most at risk positions;
  • Improve the capture and sharing of high value undocumented knowledge and improve overall knowledge sharing; and
  • Improve or shorten the length of formal training and introduce/improve the informal learning strategies for those job categories where a large number of job incumbents were being replaced and the organization had to fast track learning and development times.

Competency Management
A key foundational piece developed and implemented was a competency management approach and related tools. The competency management framework was seen as the key component of the corporate succession plan in the organization’s first years working in the area of KT.

To support the introduction of competency-based management approach Hydro-Québec developed agreements with the unions on the introduction of competency dimension in assessing employees for job transfers and promotion.

Hydro-Québec also focused on improving key HR processes including:

  • Analysis of why employees were leaving;
  • Shorten the recruitment and new employee integration process; and
  • Fostered partnerships with Québec universities to increase the supply of electrical engineering graduates to the organization and sector.

The Shift from KT to KM

Increasingly Hydro-Québec has shifted its focus from KT to incorporate a broader and more strategic approach to KM –particularly in relation to communities of practice or technical networks and in the capturing and documentation of high-value undocumented knowledge in the technical functions and in the strategic problem-solving activities. Within this framework, learning and KM were seen, around 2002, as being in the same value chain. Figure 4 below identifies the link between competency management (CM) and knowledge management (KM).

Figure 4: CM and KM Linkages

CM and KM processes and strategies 2002+
  • Continual adjustment of retirement requests
  • Vulnerability stratification
  • Maps of critical knowledge
  • Expertise management plans
  • Competitive hiring conditions
  • Evaluation system at hiring VIP service
  • Partnerships (Institute of Electrical Power Engineering)
  • Watch benechmarking
  • Development plans
  • Situational learning (apprentices, buddy system, coaching, mentoring, online tutorials, collaborative work)
  • Networks (technical or functional)
  • Performance management and management of individual contributions
  • Networks (technical or functional)
  • Hiring in advance
  • Transfer plans
  • Knowledge modeling
  • Netwroks (technical or functional)
  • Demonstrate knowhow and highlight innovation
  • Daily actions to recognize contributions and attitudes

Figure 5: Hydro-Québec’s Competency Management Roadmap (1998-2006)

Development and deployment of the CM approach Development of products linked to the succession plan and knowledge transfer initiatives Management of strategic and critical knowledge
Monitoring added value for current and future enterprise performance

The Introduction of Communities of Practice
By 2002, HR was looking for leaders and champions to support KM, as well as researching best practices and lessons learned in and outside the electricity industry. Specifically Hydro-Québec took part in a research project in Québec on ways of working and collaborating in the Internet age. The purpose of the project was to study the implementation, operation and evolution of virtual communities of practice. The two pilot communities did not stay with the project until the end. Key challenges to sustaining these communities were: 1) a lack of situational analysis prior to the establishment of the communities and 2) the tensions between daily work and the managers and employees expectations about what to expect/was required from communities of practice, collaboration and informal learning among co-workers, among geographically dispersed.

Meanwhile, in 2002 and 2003, 14 intentional sharing and collaboration networks were created or recognized because they were already well-rooted in existing natural or formal networks. Some of these networks already stood out for their ongoing support and leadership from sponsors, their flexible and open-ended design, their focus on network facilitation (and therefore the support for and training of facilitators). For four of the networks, their implementation of a virtual environment suited the needs of members for their practices. This experience therefore led the organization to recognize the importance of communities of practice and technical networks as a transfer method and to implement other knowledge transfer strategies.

Differential Approach to Communities of Practice and technical networks
Hydro-Québec tested two different collaborative approaches for both technical networks and communities of practice. Networks are more functionally based and communities of practice tended to focus on a knowledge domain or a common practice field where there is no content authority. Technical networks are a mode of collaboration that is sponsored by a manager responsible for key areas of expertise. Technical networks include support level expertise and exchange of knowledge that is more fluid in terms of sharing. Networks include both higher and lower levels of technical support level in a business lines or a functional domain or an activity including: transmission line, distribution line, production installation, etc. This worked really well in these areas of the business but in other areas the networks were not as successful as the target groups were not open to collaborating.

While some areas and professions are more prone to collaboration, on the whole, Hydro-Québec found some resistance to communities of practice and collaboration occurred when the need was not sufficiently recognized by management, co-workers and/or colleagues. As a result, Hydro-Québec focused on engaging and developing support from upper management and managers responsible for domains or functions and among the targeted professional groups where there was an interest in developing a network or community of practice.

Critical KM/KT Supports

Role of HR
Hydro-Québec put in place “gestion du savoir faire” (What To Do Guide) network that included a team of HR advisors that were supporting the different business unit’s plans for knowledge transfer. This network supports the business unit and develops a KM/KT guide to support KM/KT interventions. HR advisors also played a role on the learning side of capturing the knowledge of the experts. Hydro-Québec uses transfer plans to support knowledge transfer in critical areas. The development of these plans includes:

  • Gathering of material;
  • Review of procedures, process, and technical data sheets;
  • Review of equipment/training requirements; and
  • Support the transfer of information through mentoring/coaching.

Understanding Employees KT Needs

While implementing an approach to KM/KT, it became important to understand what employees consider to be “knowledge” and what they saw as important from a corporate perspective. Through focus groups, employees were asked what they saw as “KT” and if they were satisfied with Hydro-Québec’s approach to KT. What they heard was that employees wanted Hydro- Québec to look at KT beyond staff turnover particular KT between the regional operations; consultants/researchers and between branches and units. They also indicated that employees need to be better prepared to transfer and receive information (including through coaching).

Establishing knowledge management governance
Proof of concept experiments illuminated the importance of IM and IT contributions for the success of the deployment of KM processes and a KM toolkit.

After much reflection and discussion, the decision was taken in 2008 to introduce a Chief Learning Officer position, which has all responsibility for training and the KM/KT Strategy and all related activity. It was a significant decision to take and took a long time to receive final approval from upper management. Currently HQ is working on a KM corporate strategy and developing pilot projects to improve the integration of IT and IM services, KM services and HR.

There were a number of initiatives that were introduced to support knowledge sharing. Knowledge portals were introduced and tested through a proof of concept approach. Most functions now have a knowledge portal on the shared drive – but these are not truly knowledge portal as they are located on the hard drive and not online knowledge portals. Hydro-Québec now has knowledge portals for critical functions in the organization and uses Live-Link to support document management and collaboration.

Key Successes and Challenges

Key Successes
In terms of measuring mobilization, Hydro-Québec has developed an annual employee survey in which a number of factors are assessed including: succession readiness, climate, tracking improvements related to knowledge transfer. While Hydro-Québec has found it hard to measure impact of KM/KT on productivity, the annual survey of employees, on the KT program has demonstrate that satisfaction with the transfer of knowledge and with training had traditionally been relatively low. A more specific survey conducted each year from 2002 to 2007 with managers and experts that were leaving and successors showed high satisfaction with the corporate KT program and showed a relation between organizational climate, and succession readiness and knowledge transfer in the parts of the organization where there has been knowledge transfer plans with advance staffing.

KM/KT strategy has helped Hydro-Québec focus on the formal transfer of knowledge but it is recognized that KT could have a greater impact across the company. Assessment of Hydro-Québec’s KM/KT strategy has helped the organization focus on the formal transfer of knowledge but it is recognized that greater impact is needed across the company.

Key Challenges Encountered
Investing Enough Resources in KT – The main reasons cited for a failure to effectively transfer knowledge include:

  • Lack of planning and resources;
  • Lack of availability of the experts;
  • Lack of supporting organizational culture; and
  • The suspension of jobs as a result of a reallocation of resources.

Introducing and Supporting Communities of Practice

From Hydro-Québec’s experience it is important not to underestimate the need to develop and introduce new KM/KT strategies.  It took a great deal of time to successfully implement communities of practice and the technical networks. HR had to make the business case for them, as well as the collaborative tools required to support these networks. In benchmarking other firms, Hydro-Québec noticed that communities of practice in leading private sector organizations are linked to bottom line targets but at Hydro-Québec this has not been easy to do. The organization is working to link collaboration to performance and in finding ways to link communities of practice to the interest of experts in order to get them more interested in actively participating in the communities/networks.

Given the importance of co-development, those working to support KT have recommended that the organization needs to make available the time of experts and HR to effectively support the development of succession and KT plans.

Workforce Forecasting
In 2005, Hydro-Québec began to review the impact of its investment in succession planning. The findings of the review were that people did not retire at the same rate as forecasted. People left but a lot of people postponed their retirement and this directly impacted their forecasting of workforce turnover.

Risk Analysis
In 2006 Hydro-Québec did an audit of manpower planning and KT strategy and it was determined that they needed to strengthen key HR processes:

    • Make succession concerns, including critical knowledge transfer and organizational memory, a part of HR planning process;
    • Emphasize vulnerabilities/risks in planning;
    • Assure continuous monitoring of the workforce and feeder groups (external and internal) through both forecasting and simulation;
    • Identify critical knowledge and the people who hold it – knowledge mapping;
    • Put in place methods that encourage acquisition of knowledge and organizational memory encourage the identification and sharing of tacit knowledge, facilitate access to explicit knowledge, value knowledge asset base and ensure its use;
    • Identify and capitalize on opportunities for medium- and long-term optimization; and
    • Value the knowledge asset base throughout the organization and ensure to use it.

Redefining the Role of HR in KM/KT

For the HR managers globally – when the KT program was introduced it was clear that the Hydro-Divisions HR specialists who were members of the Gestion du savoir-faire network were coordinating the program, supportingthe first knowledge transfer plans and were coaching other HR specialists and trainers that were directly involved in the local projects; but in retrospective unfortunately, the succession plan was not much strategically influencing the training departments and HR generalists in how they worked or their focus in supporting the succession plan. HR realized that they needed to assess how the function needs to change to better support KM/KT. This included breaking down its silos; introducing greater integration among HR’s key activities; and moving towards more informal learning, job aids and easier access to organizational memory and to online training to provide employees with more flexibility.

Lessons Learned

Engaging Senior Leadership
In developing the corporate succession support plan (the primary KT strategy), it was recognized that upper management had to be more engaged in order to effectively link the succession plan to the business side of the organization.

Hydro-Québec has also found that the CLO role is not sufficient in and of itself to realize the full potential of its KM and KT initiatives. Rather senior management needs to drive KM/KT at a corporate level and ensure resources are available to support it. Best practices research at TVA and other leading industries has demonstrated to Hydro-Québec that the successful implementation of KM/KT within these organizations was the direct result of upper management being actively and visibly involved. Hydro-Québec’s corporate succession support plan has been a critical tool for ensuring support and buy-in from senior management/executive team.

Hydro-Québec has also found that it needs to invest more in the introduction and understanding of communities of practice and collaborative work particularly in ensuring the supporting technology, leadership, labour relations, and culture is in place to support knowledge sharing. To develop leadership and build a supportive culture, Hydro-Québec has invested in more training and coaching of managers so that they are better able to use tools to mobilize the experts in order to share critical knowledge.

Strengthening KM/KT Efforts as Follows:

  • Continuous integrated planning:
    • Make succession concerns, including critical knowledge transfer and organizational memory, a part of the ongoing business and HR planning process.
    • Emphasize vulnerabilities/risks.
  • Position the project well at the corporate level and in each of the functions or business activity:
    • Demonstrate the value proposition for the top management, functional managers, the employees and line responsibilities well defined?
    • Develop a business case to get the buy-in from senior leadership.
    • Combine and integrate all activities into a project structure and promote synergies.
  • Identify and capitalize on opportunities for medium- and long-term optimization:
    • Make sure to target expertise (who, why, how, consequences etc.).
    • Operational knowledge needs to be linked up with supporting systems.
    • Strategic knowledge needs to be linked up with the key business domains, in the domain of activity or in one specific domains of expertise.
  • Identify the key elements of transfer.
  • Capture knowledge of the expert and produce a document in a format appropriate to the context.  These could include:
    • Heuristic schemata (Knowledge maps) and references;
    • Models of knowledge by object portrayed and references;
    • Electronic repository of knowledge or knowledge books, collection of good practices, case studies, learning stories;
    • Demonstrations on video; and
    • Updated of processes, procedures, norms, of contents of training, telephone directorys.

Provide to all managers simple tools to address knowledge sharing and knowledge transfer issues within teams, as well as the continued promotion of collaboration, inter-generational dialogue and internal networking.

Future Directions

In the future the focus of Knowledge Management at HQ is to get a buy-in from managers at all levels to put in place or improve informal learning processes and tools as well formal learning processes adapted to the business needs and the needs and preferences of its employees.

Currently representatives from management, as well as information technology management and information management are involved in developing the Learning and KM corporate strategy or value proposition and are partners in the development of solutions at the corporate and division levels.

From Hydro-Québec’s experience the KM/KT Strategy cannot just focus on critical workforce factors and knowledge documentation and transfer. It must be linked to business priorities and critical and performance improvement priorities. It must also be supported by the proper IT environment and by sound document management practices and content management systems.