PG&E Takes the Lead in Leadership; Charged with Overseeing a Massive Business and Cultural Transformation, the California Utility Establishes a Dedicated Leadership Team to Guide Employees

Article excerpt

After Pacific Gas and Electric Co. (PG&E) emerged from bankruptcy following the California energy crisis, it began a massive business and cultural transformation that would fundamentally change business operations and processes, and would require a significant shift in employees' attitudes.

In late 2004, the company started identifying ways to change nearly every aspect of its operations. It upgraded call centers, began developing a new asset management registry, and employed technology in new ways, such as introducing wireless "smart meters" that automatically transmit energy usage data and that do not have to be "read" like ordinary meters.

At the beginning of 2005, the company also rolled out a new vision of becoming the leading utility in the U.S., and set about guiding the transformation efforts and uniting employees around a common goal.

The cultural transformation focused on developing a new set of company values and promoting behavior that supported these values. The values were defined as:

* We act with integrity and communicate honestly and openly.

* We are passionate about meeting our customers' needs and delivering for our shareholders.

* We are accountable for all of our own actions. These include safety, protecting the environment and supporting our communities.

* We work together as a team and are committed to excellence and innovation.

* We respect each other and celebrate our diversity.

Benchmarks showed that PG&E was not keeping up with rising industry standards and customer expectations. The company's infrastructure was aging, and there was room to be more cost-effective. Employees expressed the need for better communication, tools and resources to do their jobs more efficiently and to better serve customers. Results from PG&E's 2004 internal climate-measuring premier survey, conducted by the Mayflower Group, and the annual Towers Perrin Communication Effectiveness Survey indicated that there was little open, two-way communication; supervisors weren't passing on information, and messages across departments and across levels of management weren't consistent.

Despite the need for change, internal research showed that many employees were suspicious of the company's transformation program, viewing it as a "flavor of the month" effort, similar to previous reorganizations that were never fully mobilized or were considered synonymous with downsizing.

To help PG&E's 20,000plus employees embrace the transformation, the internal communication department identified the need for an Extended Leadership Team (ELT) that would include not just company officers but also directors, managers, supervisors and superintendents. The communication department established the criteria for inclusion in the ELT and a process for people to become involved. It then developed and implemented a robust, multipronged ELT Communications Program to engage and educate this select group of 2,400 people, and equip them with the communication skills and tools they needed to fulfill their new responsibilities as leaders in the transformation.

ELT members ultimately have the responsibility for cascading communications to all PG&E employees. They serve as informal opinion leaders who are critical to the success of companywide change.

Objectives

The internal communication department set the following goals for itself. First, it should support PG&E's transformation by informing, engaging and motivating members of the ELT to embrace and promote the changes that would enable the company to achieve its vision of becoming the leading utility in the U.S.

Second, it should communicate PG&E's new set of values and demonstrate the values in action, so that ELT members would have clarity around the day-to-day behavior that would unite the company and drive both the business and culture transformation. …