THE WELCH COMPANY

440 Davis Court #1602

San Francisco, CA  94111-2496

415 781 5700



[Submitted via Internet]

October 27, 1997                                    04 00061 97102701



Mr. Gordon Smith
Chief Executive Officer
Pacific Gas and Electric Company
77 Beale Street
San Francisco, CA  94177

Subject:  Communication Metrics

Ref:   a. R Jackson Email Steve Buck Oct 14, 1997
          b. G Smith Email Russ Jackson Oct 13, 1997
          c. S Buck Email Gordon Smith Oct 12, 1997
          d. Welch Email Steve Buck Oct 12, 1997
          e. G Smith Email PG&Eers Sep 5, 1997

Dear Gordon


On Oct 13, you requested comments from Russ Jackson on an initiative to improve
communications, ref b.  Russ notified Steve Buck on Oct 14 that you reviewed
Steve's submission, ref c, d, on your request for ideas, ref e.


The U.S. Army Corps of Engineers reported on Oct 8, 1997 that adding "metrics"
to communication reduces overhead expense in the range of 6% and improves field
operations at higher rates.  A pilot program for a month or so can show that
Communication Metrics accomplishes your goal to improve results at PG&E. If you
received comments from Russ, these might be forwarded to me for anaysis toward
initiating a pilot program at PG&E.


If you have not received comments, it reflects information overload ("entropy")
cited by the U.S. Air Force Institute of Technology.  The changing business
environment causes communication to tend toward disorder over time.  Management
is overwhelmed and degrades to "guess and gossip" which stifles initiative and
reduces earnings.









Mr. Gordon Smith                                                   Page 2 of 2
Subject:  Communication Metrics




Since communication is the engine of leadership, adding metrics at the highest
level produces the biggest impact.  Therefore, when you reported on Sep 5, 1997
on the need to improve communication, ref e, it seemed appropriate to present
this opportunity to leverage your voice.  Please advise of the best way for
PG&E to review Communication Metrics.


Sincerely,


THE WELCH COMPANY






Rod Welch




cc:  Russ Jackson