Energy Planning Network: Deregulation And You (December 1999)
Corporate makeovers in the form of organizational restructuring, systems reengineering, and process retooling are taking place all around the country as energy providers recreate themselves to be competition-ready. Success in a deregulated environment, however, requires true contenders to do some deeper soul-searching into the core of their organizational culture and into the heart of their corporate value system.
The Status QuoTraditional energy providers have cultivated organizations whose definition of success is synonymous with that of security. Quantifiable outcomes that follow predictable forecasts with minimal deviation are the accepted mode of operation.
By contrast, success in a competitive environment requires risk-taking that defies both the corporate status quo philosophy and the uninspiring reward system sustained by many conventional power and gas suppliers. Even in the arena of unregulated affiliates, the inert industry mindset seems to permeate decision-making.
While restructuring can bring to light the need for deeper corporate change, the process itself can become self-absorbing, thus limiting its effectiveness. Existing nuts and bolts are repolished but not replaced despite the fact that their threads are stripped. New input that may well shape a successful future is often unrecognized and overlooked because the organizational mindset may be one of change but not necessarily one of improvement.
If customers want to see tangible and continuous benefits from deregulation, then they must take the lead in making the change process one of improvement. Facility managers and process engineers can use their skills and their influence to help their energy providers structure organizations that are innovative, responsive, and operationally efficient. As customers, they can send priority feedback through their energy suppliers’ chains of command confirming the need for ingenuity, entrepreneurial thinking, and effective action.
Get Out Of The BoxIt is the customers who can begin to create the real vision for the future of the energy industry by first establishing a solid understanding for providers on specific needs, on timeframes, and on the flow of decisionmaking. The next steps are to help suppliers recognize how they are perceived in terms of their strengths and weaknesses and to comprehend how this perception affects negotiations and expectations.
It is, in fact, the customers who can drive the creation of energy companies that value and reward out-of-the-box thinking, even though the results assuredly will not always be the right answers. And while the final appearance of the new energy provider is yet unseen, successful companies will be those that take the risk necessary to achieve the proper operating balance between finance, customer relations, and offerings. The beauty in the chaos of deregulation is that there is a chance for true change that benefits both providers and customers. But change must have its roots at the core of the corporate philosophy to be meaningful; otherwise it has a limited lifespan of operation. Customers indeed have the power to make the benefits of deregulation a reality by teaching the energy industry how to garner their trust and win their hands for lasting commitments.
Excerpted from EPN’s monthly InSide Energy $avings newsletter.