And why policy on
stranded costs defies
a traditional legal or
There are sound economic reasons why policymakers should allow electric...
Nathan Rothschild knew before anyone else that Napoleon would lose the Battle of Waterloo in 1815. With this advance knowledge he dumped his British-backed government securities on the market, making it appear as if he had heard the opposite outcome. His competing merchant bankers, following Rothschild's move, also sold their securities. After Rothschild saw the market bottom out, he repurchased every piece of paper he could lay his hands on (em at fire sale prices. He made a killing.How did he accomplish this feat? Long before Waterloo, Rothschild had established a network of contacts throughout Europe. To each field contact he gave carrier pigeons. Whenever his contacts saw a critical change in the marketplace, they sent out a pigeon. They weren't always right and the news was not necessarily momentous. Yet, this carrier pigeon
network was like the E-mail of his day.
What gave Rothschild his competitive edge was his understanding of the randomness of the information flow. He therefore scattered his network throughout the European theater, not knowing where the answer would come from. At the same time, he focused his network. Rothschild knew what he was looking for and clearly told his field contacts what to watch for. This is the competitive art of "random focus," an art that all utility as well as nonutility power companies must learn.
Groupware, such as Lotus Notes(r) and other application software, provides today's utilities with the technological equivalent of an efficient carrier pigeon network. Groupware flattens the organizational structure by re-moving bureaucratic information barriers. In short, it allows a random flow of information.
Groupware will not, however, tell the organization what to look for and how to report it. Most electric utilities are still groping for strategic direction. Most executives feel overwhelmed by the strategic choices their firms must make in the coming years. They are unsure about which competitive target to watch: Nonutility generators? Energy service companies? Neighboring utilities? Overseas investments? Acquisition candidates? Investments in unregulated businesses?
In the near future, utilities will sort through many of these options (em just as the telephone companies, banks, and airlines have done. Yet, even once a utility's management selects its strategic options, the question remains: How will it become savvy enough to pull off the strategic and tactical moves it takes to succeed? Here, groupware plays a critical role.
AT&T (just prior to its divestiture), with almost 300,000 employees, and Corning, with over 25,000 employees, are both far larger than any utility and far more informationally agile. They use information technology to flatten the organizational hierarchy, employing a kind of electronic ringmaster that shuttles information to whoever needs it.
AT&T has established a companywide database of experts that anyone may call, despite their far-flung locations or different functions. This access to internal expertise has saved managers countless hours of fruitless searching.
Corning's solution is somewhat different. In the mid-1980s, it built the Exchange, a business database and information-swapping forum. A minicomputer network gives management instant access to published as well as internal information on any customer, industry segment, or competitor.