CONTACTS 
0201 - PG&E Grid Customer Services                                                                                                                                        O-00000642 0201
020101 - Mr. Bill DeHart, PMP
020102 - Project Manager

SUBJECTS
Bill's Assignment, 960815
Demonstration for New Users
Construction (DPB)
Sales discussions
Locate Decision Maker
PG&E, Sprint, Bechtel
PG&E Demands Better Communication to Improve Productivity, Earnings
Communication Main Factor of Successful Management

1810 -
1810 -    ..
1811 - Summary/Objective
1812 -
181201 - Follow up ref SDS 18 0000, ref SDS 17 0000.
181202 -
181203 - PG&E executives met recently on improving communications at PG&E in
181204 - order to strengthen management, productivity and earnings. The meeting
181205 - identified eight (8) key challenges PG&E faces under deregulation.
181206 - CEO Gordon Smith requests improved performance through flexibility and
181207 - better work practices; he requests support for PG&E's public image.
181208 - Detailed plans will be issued in a few weeks.  Gordon asks for ideas
181209 - from PG&Eers.
181211 -  ..
181212 - PG&E's objectives can be supported by Communication Metrics based on
181213 - the PG&E report dated 941230, and publication on 970418 by the U.S.
181214 - Army Corps of Engineers of findings that adding a system of "metrics"
181215 - to communication adds value to people and improves productivity.  The
181216 - need to improve communication immediately warrants consideration of
181217 - Communication Metrics.
181219 -  ..
181220 - Submitted ref DIT 1 0000 responding to Bill's letter.  I sent copies
181221 - to Max Wideman, Merrill Malvini at Unisys, and Morris Jones, noting
181222 - the correlation with the "imploding mangement" under information
181223 - overload, in the NWO... paper.
181224 -
181225 -     [On 970910 follow up discussion with Bill. ref SDS 20 0000
181227 -      ..
181228 -     [On 971012 submission to Steve who forwarded this record to PG&E's
181229 -     CEO, Gordon Smith on 971012. ref SDS 22 9448
181231 -      ..
181232 -     [On 971027 letter to Gordon requesting comments. ref SDS 23 0000
181234 -      ..
181235 -     [On 971110 submitted USACE report on Communication Metrics to Lee
181236 -     Calloway, VP Communication. ref SDS 25 1080]
181238 -      ..
181239 -     [On 980403 Gordon Smith trying to improve profitability. ref SDS
181240 -     26 3850]
181242 -      ..
181243 -     [On 010529 PG&E earnings decline, declares bankruptcy. ref SDS 27
181244 -     L2EM
181245 -
181247 -  ..
1813 -
1814 -
1815 - Progress
1816 -
181601 - PG&E Needs Better Communication, Flexibility, Work Practices
181602 -
181603 - Received letter ref DRT 1 0001, from Bill transmitting email he
181604 - received from PG&E CEO, Gordon Smith, dated 970905, ref DRT 1 8399.
181606 -  ..
181607 - Gordon reports a Management Committee meeting held on 970829 focused
181608 - solely on "communications" to improve PG&E company-wide performance
181609 - and morale, including interaction with the public. see ref DRT 1 8401
181610 - The Management Committee feels greater flexibility and better work
181611 - practices are essential ref DRT 1 8666.
181612 -
181613 -     This aligns with analysis on 950128 showing better communication
181614 -     can improve PG&E productivity, ref SDS 9 7Y4I, and reflects the
181615 -     meeting at PG&E on 941010. ref SDS 6 M94K
181617 -      ..
181618 -     On 890809 industry executive reported communication is the driving
181619 -     force of productivity and earnings. ref SDS 2 CJ9J
181621 -      ..
181622 -     The PG&E committee recognizes communication is the biggest risk in
181623 -     enterprise, explained in POIMS. ref OF 2 IE6L, because management
181624 -     is 80% to 90% communication, reported on 890809, ref SDS 2 8812,
181625 -     and communication is the most complex and difficult task of
181626 -     management, noted by Drucker, reviewed on 931130. ref SDS 5 3851
181627 -     Article in May 1997 issue of PM Network reports that communication
181628 -     is the biggest cause of business failures. ref SDS 12 8888  Recent
181629 -     bankruptcy filings by by MK and Guy F. Atkinson show the urgency
181630 -     for improvement, reported on 970815 ref SDS 16 8849.
181632 -  ..
181633 - The memo says that detailed plans for improvement will be issued in
181634 - coming weeks, see at ref DRT 1 8666.
181636 -  ..
181637 - Gordon cites a commitment to partnership with employees, ref DRT 1
181638 - 5681, and requests ideas from all PG&Eers, ref DRT 1 5697, and further
181639 - at ref DRT 1 9438.
181640 -
181641 -     [On 971107 Russ Jackson reported that PG&E had accomplished needed
181642 -     change. ref SDS 24 6837]
181644 -      ..
181645 -     [On 030131 Virgina Stevens called to ask about SDS records on the
181646 -     Internet. ref SDS 28 0001
181648 -  ..
181649 - Communication is Critical to PG&E's Success
181650 -
181651 - Gordon's letter says "communication" is an important factor "right
181652 - now" to meet the challenges of the marketplace, ref DRT 1 8408, in two
181653 - ways....
181654 -
181655 -     a.  Every employee needs to understand the huge challenges the
181656 -         company faces in dealing simultaneously with many complex and
181657 -         serious issues (which are listed >below), and
181658 -
181659 -         1.  Direct access on 1/1/98
181660 -         2.  Power plant divestiture
181661 -         3.  The gas accord
181662 -         4.  Winter storm season
181663 -         5.  Dependability and reliability programs to improve and/or
181664 -             build new infrastructure
181665 -         6.  Tree trimming issues
181666 -         7.  Smart spending/saving programs
181667 -         8.  The general rate case
181669 -          ..
181670 -     b.  Every employee's help is needed to create a stronger trust in
181671 -         PG&E as a competent, responsible utility.  As you may remember
181672 -         from my last e-mail, I think we need to speak up more often
181673 -         about the good work we're doing for our customers and
181674 -         communities in order to counteract the negative and often
181675 -         incorrect coverage we're getting in the media.
181677 -  ..
181678 - Gordon's message is strengthened by combining the need to improve,
181679 - with getting out the word to the public on PG&E's actual performance,
181680 - which he feels is not reported by the media. ref DRT 1 8408
181682 -  ..
181683 - While public relations is a specialized job, Gordon is correct to
181684 - encourage proactive, constructive interaction with the community by
181685 - PG&E employees.  This, of course, is a huge mountain to climb, because
181686 - all the media has to do is find one disgruntled employee to undermine
181687 - effective performance and outreach by 99% of everyone else.
181688 -
181689 -
181691 -  ..
181692 - Information Requires Intelligence to Produce Effective Communication
181693 -
181694 - Gordon proposes that every employee needs...
181695 -
181696 -     "... correct, timely information about the company's programs,
181697 -     initiatives and practices, and each of us needs to communicate
181698 -     that information to our customers at every opportunity."
181699 -     ref DRT 1 8419
181701 -  ..
181702 - Caution is needed to avoid overloading employees with information.
181704 -  ..
181705 - PG&E employees, like those at Bechtel, IBM, Intel, the government and
181706 - everywhere else, are being inundated by information.  Experts from
181707 - Drucker to Kurzner recognize that more information does not improve
181708 - "communication." see review on 931130, ref SDS 4 5567
181710 -  ..
181711 - The study by the U.S. Air Force Institute of Technology reported that
181712 - entropy in the information base directly causes cost growth, see
181713 - review on 970707. ref SDS 14 0108
181715 -  ..
181716 - These new realities of the Information Age require intelligence
181717 - support that converts information into useful knowledge. ref OF 5 0582
181719 -  ..
181720 - Adding "metrics" to communication gives information meaning so that
181721 - work is aligned with organizational objectives. ref OF 5 3943  This
181722 - new level of decision greatly improves conventional management by
181723 - "guess and gossip." ref OF 5 8303
181725 -  ..
181726 - The first step is to review current practice on distribution of
181727 - information, so that new information people receive is not lost as
181728 - more "noise" due to "information overload" and "data pollution."  (See
181729 - "Managing Toward Accountability for Performance" Robert Albanese,
181730 - published by Irwin Press, 1978, ref SDS 19 2878, and report from Intel
181731 - at meeting on 970603, ref SDS 13 5803.)
181732 -
181734 -  ..
181735 - Leadership Needs "Communication Metrics" for Timely Intelligence
181736 -
181737 - PG&E reported on 941230 that a new system of communication support
181738 - improves management more than any method tried in the past 30 years at
181739 - PG&E. ref DRP 1 1759  On 940128 advantages of SDS for improving PG&E
181740 - management were reviewed in a telecon with CDWR. ref SDS 9 7XFC
181742 -  ..
181743 - This method is called Communication Metrics, explained in POIMS,
181744 - ref OF 4 1106, to align human understanding with organizational
181745 - objectives like those set out in Gordon's letter. ref DRT 1 0060
181747 -  ..
181748 - The basic concept is for technology (SDS) to empower consistent use of
181749 - good management practices (e.g., PMBOK and ISO) by aligning people
181750 - through communications to accomplish common objectives. see review of
181751 - ISO on 950721, ref SDS 10 1740
181753 -  ..
181754 - Timely business intelligence supports better decisions so that people
181755 - do not drift off course due to the turbulence of daily activity.
181757 -  ..
181758 - On 941130 plans for broader implementation was formulated for 1995,
181759 - ref SDS 7 6006.  However, PG&E's sponsor for Communication Metrics
181760 - took early retirement. Remaining PG&E management did not understand
181761 - the methodology because they had not worked with it.  Therefore,
181762 - despite reports from a spectrum of PG&E staff who had worked with
181763 - these methods, and strong endorsement to continue the program from a
181764 - major customer, CDWR, ref SDS 8 8841, broader implementation was not
181765 - made.
181766 -
181768 -  ..
181769 - Business Intelligence Adds Value to Information and People
181770 -
181771 - After the trial at PG&E, Communication Metrics was used at the U.S.
181772 - Army Corps of Engineers.  They published a report on 970418 stating:
181773 -
181774 -      ... Communication Metrics [is] a business "Intelligence" role to
181775 -      organize and analyze information, so that cause and effect, and
181776 -      needed actions are revealed to make leadership effective.  We
181777 -      found Communication Metrics improved our results. ref DRP 3 0537
181779 -       ..
181780 -      This "intelligence" is vital to leadership because management is
181781 -      mostly communication from dialog and documents. Patterns of cause
181782 -      and effect are obscured by high information flows.  When there is
181783 -      not enough time for analysis, understanding fragments.  People
181784 -      trying to "expedite" get mixed up without realizing it. Decisions
181785 -      become disconnected from relevant details, causing a morass of
181786 -      mistakes under the rule that "Haste makes waste!" ref DRP 3 3637
181788 -       ..
181789 -      Communication Metrics summarizes critical details to facilitate
181790 -      understanding and maintain shared meaning among team members.
181791 -      Follow-up actions are linked to original sources, so decisions
181792 -      are aligned with objectives.  Empowering people to use business
181793 -      "intelligence" for daily work leverages the innate mental process
181794 -      of converting information into knowledge, which is the essence of
181795 -      "managing." ref DRP 3 3142
181796 -
181797 -      ...the San Francisco District found that Communication Metrics
181798 -      improves teamwork, productivity and cost savings. ref DRP 3 1302
181800 -       ..
181801 -      PG&E... reported, that experience with SDS shows a lot more
181802 -      "knowledge" can be gleaned from events than seems apparent at the
181803 -      time.  Our experience ...appears to bear out the ... PG&E report
181804 -      that using SDS, according to its design, improves management.
181805 -      ref DRP 3 4729
181807 -  ..
181808 - Thus, wider experience seems to support PG&E's initial conclusions
181809 - about the benefits of Communication Metrics.  Therefore, it should be
181810 - considered for wider use at PG&E, as recommended in 1994.
181812 -       ..
181813 -      Better Communication Saves Time and Money
181814 -
181815 -      [New report from the U.S. Army Corps of Engineers (USACE) issued
181816 -      on 971008 shows Communication Metrics saved $317K in 3 months and
181817 -      avoided extra costs of $3.4M, for a total outlay of $50K. USACE
181818 -      estimates ROI of 10:1, ref SDS 21 5775, indicating potential for
181819 -      dramatic savings in a large scale environment like PG&E where
181820 -      performance and earnings are dependent upon communication, as
181821 -      Gordon reports.]
181823 -  ..
181824 - Better Communication Improves Performance, Morale, Public Support
181825 -
181826 - It is enormously disheartening to continually hear of dissatisfied
181827 - employees at a time when everyone seems to be working hard to improve
181828 - conditions.  As noted, discontent can never be fully avoided. However,
181829 - it is well to recognize the fundamental covenant between manager and
181830 - employee that causes low morale, but also illuminates a solution...
181831 -
181832 -      People are upset by managers (and others) who do not act in good
181833 -      faith to accomplish organizational goals, but rather exercise
181834 -      personal whim, because they are not held accountable.  It causes
181835 -      anger because it conflicts with the employer-employee covenant
181836 -      that people are setting aside personal whims at the work-place in
181837 -      order to achieve common organizational objectives that serve
181838 -      everyone's goal of survival through a successful community.  When
181839 -      that covenant is impaired by arbitrary conduct, people feel
181840 -      deceived and trapped. They lash out, obstruct, shirk.  see the
181841 -      record on 951103. ref SDS 11 8853
181843 -  ..
181844 - The PG&E memo on 941230 shows that management improves by using
181845 - Communication Metrics to show correlations between what is done and
181846 - organizational objectives, requirements and commitments.  As set out
181847 - in the memo, improvement is a daily endeavor, ref DRP 1 ON6K, like
181848 - tending a garden, because without SDS the pace of daily activity makes
181849 - it difficult to keep original objectives in mind.  People are easily
181850 - blown off-course by "turbulence" from daily information that
181851 - overwhelms span of attention, and so are naturally drawn to conduct
181852 - that feels good in the near term, even though it causes eventual pain,
181853 - as noted by Gordon in his memo, and explained in the record on 920128.
181854 - ref SDS 3 1199
181856 -  ..
181857 - The engine of Communication Metrics to improve management productivity
181858 - provides traceability to root causes, so that accountability reduces
181859 - the disconnect between senior executives and relevant details of the
181860 - work.  Removing the sense of isolation will reduce arbitrary conduct.
181861 - This improves performance and morale by restoring the covenant between
181862 - manager and employee.  It also enables management to discover the true
181863 - facts in time to tell the full story to the media, rather than be
181864 - whip-sawed by malcontents, on the one-hand; and, to institute
181865 - corrective action when warranted.
181866 -
181868 -  ..
181869 - Change is Challenging, But Inevitable; PG&E Must Lead Not Follow
181870 -
181871 - The saying that "If you keep doing what you have always done, you will
181872 - continue to get what have already gotten," offers a kernel of insight
181873 - that seems timely.
181875 -  ..
181876 - In 1994 and 1995, PG&E was forced by circumstances to "reengineer" but
181877 - this mainly entailed cutting staff and loosing business under
181878 - deregulation.
181880 -  ..
181881 - PG&E's focus on improving communication, reported by Gordon, reflects
181882 - the correct remedy for PG&E to take command of its fate, by adopting
181883 - stronger, proactive management.
181885 -  ..
181886 - Clearly, we cannot stem the tide of change.  We can, however, shape it
181887 - and mold our work practices to meet future realities so that PG&E is
181888 - positioned to lead in a new market environment.  Better communication
181889 - is the heart of this opportunity, because communication is the engine
181890 - of "community" that focuses the diversity of skills and perspectives
181891 - into a productive team.
181892 -
181893 -
181895 -  ..
181896 - Communication Metrics Empowers PG&E to Control Its Future
181897 -
181898 - Since we seek to meet the challenge of change, let's add to our
181899 - arsenal the tools and methods needed to be successful.
181900 -
181901 - Let's evaluate potential for Communication Metrics to accomplish the
181902 - alignment between our people and our goals, as Gordon has layed out.
181903 -
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