Performance management – critical management systems and processes, people, culture, reputation, and controls – is what drives long-term business performance.
Because performance management involves changing human behavior, it is the hardest hallmark to improve. Building a great business takes top leaders, so we began our turnaround by transforming our management. About two-thirds of the officers with TXU three years ago have departed, and more than 30 exceptional new executives have joined us, including Riz Chand and his human resources team, who have really driven professionalism in performance management. During 2006, we refocused Mike Childers as CEO-Development, a role he is uniquely qualified for, and we hired Chuck Enze as CEO-Construction and began to build a world-class construction-management team. We promoted Jonathan Siegler to the senior leadership team as the head of corporate strategy. We have also recruited or developed strong leaders below the senior level, especially in retail sales, power plant development, lean/TXU Operating System, engineering/operational readiness, legal, strategy, and human resources.
Setting high-performance standards and targets for all our businesses has also been a priority. We now have factbased benchmarks integrated into a true five-year plan. The operating plan is very tightly linked to our performancemanagement objectives, which is real progress compared to where we started.
On the human performance side, we have put in place more thorough and disciplined management-development processes that will help our businesses, management, and employees grow. The top 60 officers have been through intensive assessment and development, and that information has been incorporated into performance commitment letters for each officer. The initial set of performance-management tools, which we rolled out in 2005, is maturing and becoming embedded into our culture.
In a year punctuated with tough business and political issues, TXU employees continued to improve efficiency and work more productively. Today, we have approximately half the employees we had at the end of 2003, yet we have grown operational earnings per share by 450 percent and market capitalization by more than 220 percent. Our plants run better, we deliver reliable electricity, we have lowered our O&M costs, and our customers are better served, all thanks to the best people in the industry.
