By Michael A. Marullo, Contributing Editor
There`s a lot of talk these days about the future, especially with deregulation of electric utilities looming and promising (threatening?) to change “watt-fare” as we know it. The pivotal element in this industry overhaul is the introduction of a new term that strikes fear into the hearts of utility executives everywhere. Ah, yes, the C-word–competition.
Indeed, some utilities are already moving forward with aggressive plans to capitalize on the myriad of opportunities that a deregulated marketplace will surely produce. To their credit, the senior management teams of some utilities have already committed considerable time, money and resources to developing what is commonly referred to as a “future vision” for their respective companies.
You know the drill: Business process reengineering, entrepreneurial task forces, reinvention of the enterprise and so forth. But all these things (and more) are almost totally focused on trying to catch a glimpse of what the future could, or should, hold for a utility operating on this unfamiliar turf of open competition. But in many cases, precious little emphasis is being placed on the tactical implementation aspects of these sometimes grandiose strategic visions. And although the very capable management consultants who utilities increasingly rely on for insight have an innate capacity to produce alluring future scenarios, they sometimes seem to lose sight of the real world that exists just slightly beyond the slide projector.
As I recently suggested in this column (Utility Automation, July/August `96), not much attention seems to be directed toward the crucial role of automation in this “futureworld” of utility competition. Don`t get me wrong … strategic vision is a wonderful and very necessary thing. Indeed, without a well-thought-out plan for the future, it will be virtually impossible to figure out how to react to the maze of challenges and opportunities that are evolving daily. But without a tactical plan to guide their execution along the agreed-upon strategic course–and due recognition of the role automation plays in that plan–realization of the vision may prove elusive.
For example, I know of at least one utility that has spent millions to develop a strategic plan for dealing with deregulation and competition. In fact, it has developed two of them: one for its regulated business and one for its non-regulated subsidiary. The only problem is that each plan has independently developed a strategy that assumes retention of the utility`s traditional customers as the principal target market. (Note: What we might have once called cooperation is now called collusion!)
Yet strange as it might seem–and despite the potential embarrassment of having two salespeople from different divisions of the same utility show up to call on the same customer simultaneously–that possibility is actually OK. After all, that`s what open competition really means. The true problem, however, will be realized in the execution phase when they each attempt to differentiate themselves from one another to their (common) target customers. Without some serious thought having been given beforehand as to why the customer should do business with one or the other, it will be difficult for either to make a sale.
Quite a bit has been written on the subject of utility “electron differentiation strategies” of late, so I won`t attempt to revisit all of the various angles here. Instead, I would simply offer a suggestion to all utilities engaged in the strategic planning process: Take a long, hard look at the automation component of your overall strategy. If it`s lacking in detail or substance, you might want to look longer and harder before deciding that you have achieved 2020 vision.