The approaching 100th anniversary of regulation by public utility commissions in the United States calls for some reflection. How much have things changed, and how much have they stayed the same...
THE AVERAGE UTILITY EXECUTIVE IS A "'NAVEL-gazing'" introvert, according to Frank Ruotolo. But that executive isn't alone.
Ruotolo is president of The Futures Group, a Connecticut company that has examined how much time U.S. executives spend looking at external factors - new markets, competition, regulatory constraints - versus internal factors such as budgets, organization, and human and capital resources. (The definitions above are his.)
The Group's most recent study of execs in the water, gas and electric utility industries, and their compatriots in many other sectors, revealed similar results in all industries. Those industries include telecommunications, health care, pharmaceuticals, industrial products and services, consumer products and services, and financial services.
Some 48 percent of planning time is spent on external factors. Utility executives averaged 49 percent.
Other findings from the utility respondents:
• 51 percent don't feel comfortable forecasting company performance beyond one year, and 74 percent said they can't forecast comfortably beyond two years.
• They rated the effectiveness of their strategic plans at 6.4, on a scale of 1 to 10. (Telecommunication company execs ranked the effectiveness of their plans at 5.2.)
• The top three external factors executives believe they will have to face are the political/regulatory climate in the U.S. (77 percent of respondents), competitor actions (20 percent) and the international political/regulatory climate (14 percent).
• Long-range planning committees don't play a part in utility strategic plans; central planning departments and individual business units work together at the companies of 37 percent of those surveyed.
The good news is that deregulation has forced the utility industry to face competition and to learn to make informed decisions so that it may act ahead of rivals. The strategic planning tools utility executives use the most are financial forecasting (91 percent), competitive intelligence and scenarios (74 percent each), and brainstorming (71 percent). Trend analysis, which came in last (69 percent) among utility respondents, was the top technique used by all other respondents.
For information on the "Extroverts or Introverts" study, contact The Futures Group at 800-229-5075, or www.tfg.com.
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