Monday, March 31, 2014

‘I'm OK, You're OK’ a good read for hated utilities*


* See also:  "Using 'Engineering of Consent' to break gridlock." Mar. 27

The popular book I'm OK, You're OK, by Thomas A Harris MD, is one of the best selling self-help books ever published. It is a practical guide to Transactional Analysis as a method for solving problems in life, says Wikipedia.

Public utility firms who have alienated their customers will do well to read it.

From its first publication in 1967, the popularity of I'm OK, You're OK gradually increased until, in 1972, it made the New York Times Best Seller list and remained there for almost two years. It is estimated by the publisher to have sold over 15 million copies and to have been translated into many languages.


Unraveling memories


Wikipedia continues:

In the preface, Harris praises the then-new procedure of Transactional Analysis (TA) as a major innovation addressing the slow process and limited results that he and other psychiatric practitioners believed was characteristic of conventional psychiatry. 

He was motivated to write I’m OK, You’re OK because TA offers an approach that is accessible, produces results and offes many ordinary people affordable ways to deal with issues in their lives. Furthermore, it can be used in group situations which are less costly than traditional one-to-one therapy.

Rather than working with abstract concepts of consciousness, Harris suggested that the pioneering work of brain surgeon Wilder Penfield in uncovering the neurological basis of memory could offer complementary insights grounded in observable reality. 


In vivid detail

Specifically, Harris cited reports of Wilder’s experiments stimulating small areas of the brains of conscious patients undergoing brain surgery (the brain does not have any pain receptors, so this can be done in relative comfort for the patient). 

Though the patients were conscious that they were on an operating table, the stimulation also caused them to recall specific past events in vivid detail—not just facts of the event, but as a vivid "reliving" of "what the patient saw and heard and felt and understood" when the memory was created. 

Based on these experiments, Harris postulated that the brain records past experiences like a tape recorder, in a manner that makes it possible subsequently to relive past experiences with all their original emotional intensity.


Intense childhood memories

Harris continued by linking his interpretation of Wilder’s experiments to the work of Eric Berne, whose model of psychotherapy is based on the idea that emotionally intense memories from childhood are ever-present in adults. Their influence can be understood by carefully analyzing the verbal and non-verbal interchanges (‘transactions’) between people, hence Berne’s name for his model: Transactional Analysis.  

Harris saw great merit in the ability of TA to define basic units through which human behavior can be analyzed—the ‘strokes’ that are given and received in a ‘transaction’ between two or more people—and a standardized language for describing those strokes. 

This readily understood standardization, and the association Harris developed between TA and Wilder’s neuroscience, gives TA a degree of credibility not possessed by earlier abstract models such as that developed by Freud.


The Parent, Adult, Child (P-A-C)

After describing the context for his belief of the significance of TA, Harris described TA, starting from the observation that a person’s psychological state seems to change in response to different situations. The question is, from what and to what does it change? 

Harris answered this through a simplified introduction to TA, explaining Berne’s proposal that there are three states into which a person can switch: the Parent, the Adult and the Child.

Harris described the mental state called the Parent by analogy, as a collection of "tape recordings" of external influences that a child observed adults doing and saying. 


Tape-recorded rules

The recording is a long list of rules and admonitions about the way the world is that the child was expected to believe unquestioningly. Many of these rules (for example: "Never run out in front of traffic") are useful and valid all through life; others ("You can never trust a cop") are opinions that may be less helpful.

In parallel with those Parent recordings, the Child is a simultaneous recording of internal events — how life felt as a child. Harris equated these with the vivid recordings that Wilder Penfield was able to cause his patients to re-live by stimulating their brains. Harris proposed that, as adults, when we feel discouraged, it is as if we are re-living those Child memories yet the stimulus for re-living them may no longer be relevant or helpful in our lives.

According to Harris, humans start developing a third mental state, the Adult, about the time children start to walk and begin to achieve some measure of control over their environment. 


The Adult matures

Instead of learning ideas directly from parents into the Parent, or experiencing simple emotion as the Child, children begin to be able to explore and examine the world and form their own opinions. They test the assertions of the Parent and Child and either update them or learn to suppress them. 

Thus the Adult inside us all develops over time, but it is very fragile and can be readily overwhelmed by stressful situations.

Its strength is also tested through conflict between the simplistic ideas of the Parent and reality. Sometimes, Harris asserted, it is safer for a person to believe a lie than to acknowledge the evidence in front of them. This is called Contamination of the Adult.


Four life positions

The phrase I'm OK, You're OK is one of four "life positions" that each of us may take. The four positions are:

1. I'm Not OK, You're OK
2. I'm Not OK, You're Not OK
3. I'm OK, You're Not OK
4. I'm OK, You're OK

The most common position is I'm Not OK, You're OK. As children we see that adults are large, strong and competent and that we are little, weak and often make mistakes, so we conclude I'm Not OK, You're OK. 


Communication gap

Children who are abused may conclude I'm Not OK, You're Not OK or I'm OK, You're Not OK, but this is much less common. The emphasis of the book is helping people understand how their life position affects their communications (transactions) and relationships with practical examples.

I’m OK, You’re OK continues by providing practical advice to begin decoding the physical and verbal clues required to analyze transactions. 

For example, Harris suggested signs that a person is in a Parent ego state can include the use of evaluative words that imply judgment based on an automatic, axiomatic and archaic value system: words like ‘stupid, naughty, ridiculous, disgusting, should or ought’ (though the latter can also be used in the Adult ego state).


Restoring communication

Harris introduced a diagrammatic representation of two classes of communication between individuals: complementary transactions, which can continue indefinitely, and crossed transactions, which cause a cessation of communication (and frequently an argument). 

Harris suggested that crossed transactions are problematic because they "hook" the Child ego state of one of the participants, resulting in negative feelings. 

Harris suggested that awareness of this possibility, through TA, can give people a choice about how they react when confronted with an interpersonal situation which makes them feel uncomfortable. Harris provided practical suggestions regarding how to stay in the Adult ego state, despite the provocation.

Popular culture

The name of the book has since become used commonly, often as a dismissive categorization of all popular psychology philosophies as being overly accepting. Examples of the influence elsewhere are:

One parody of the book has the title, I'm OK, You're not so hot.

George Carlin parodied the name in his Join the Book Club routine, offering the book I Suck, You Suck.

In one episode of the ABC television sitcom Taxi, character Latka Gravas suffers from multiple personality disorder. 

One of his personalities is a cowboy called Arlo who favors urban cowboy fashion. Cool, outgoing personality Vic Ferrari, upon replacing Arlo, remarks on his clothes as he finds himself in a psychiatrist’s office, “What is this? The I’m OK, You’re OK Corral?”


Transactional lesson

The gunfight metaphor gives the book relevance to the showdown scenario we find so often in the transactions between public utility firms and their beleaguered customers. 

Maybe it’s time for the utilities to read up on some books they missed in their childhood.

 



Sunday, March 30, 2014

It’s okay to say okie dokie, with OK 175 years old


Climactic scene of "Gunfight at OK Corral," the iconic movie   >>>>>


WASHINGTON (AFP) — It’s been 175 years since OK—or, as some prefer, okay—first appeared in print, on page two of The Boston Morning Post, then one of the most popular newspapers in the United States.

“I think OK should be celebrated with parades and speeches,” Allan Metcalf, an English professor in Illinois who is the world’s leading authority on the history and meaning of OK, told Agence France-Presse, the French news agency.

“But for now, whatever you do (to mark the anniversary), it’s OK.” 

The AFP story continued: 

In his 2001 book, “OK: The Improbable Story of America’s Greatest Word,” Metcalf calls OK “the most frequently spoken (or typed) word on the planet”—used more often than “Coke” or an infant’s “ma.” 


Quintessentially American

Concise and utilitarian, it’s quintessentially American in its simplicity. Etymologically, it has no direct relationship with Latin or Greek or any other ancient tongue.

Oxford Dictionaries, on its website, rejects speculation that OK is derived from the Scottish expression “och aye,” the Greek “ola kala” (it’s good) or the French “aux Cayes,” which refers to a Haitian port famous for its rum.

Rather, it favors a theory—shared by Metcalf—that it’s an abbreviation of “orl korrekt,” a derivative of “all correct” from the 1830s when jokey misspellings were all the rage, like Internet memes are today.


Lifelong quest

Credit for finding its first use in print goes to Allen Walker Read, a Columbia University professor who died in 2002 after a lifetime interest in OK and another widely used word with four letters that starts with the letter F.

It appeared in the Post in the context of an article concerning the ironically named Anti-Bell Ringing Society, founded in 1838 to oppose a municipal law in Boston prohibiting the ringing of dinner bells.

Society members were en route to New York, it reported, adding cryptically that if they should transit Rhode Island en route home, the newspaper editor in the New England state might well “have the ‘contribution box,’ et ceteras, OK—all correct—and cause the corks to fly, like sparks, upward.”


NG: ‘No go’


Other abbreviations proliferated at the time, like NG for “no go,” GT for “gone to Texas” and SP for “small potatoes.”  But OK truly entered the national lingua franca in 1840, when spin doctors for Democratic presidential nominee Martin Van Buren, a native of Kinderhook, New York, insisted to voters that it meant “Old Kinderhook.”

Today, OK is used “to ask for or express agreement, approval or understanding” or to add emphasis to a sentence, as in “I’m going to stay here, OK?” according to its entry in the Merriam-Webster dictionary.


‘I’m OK, You’re OK’ the Book

“I’m OK, You’re OK,” published in 1967, remains one of the best-selling self-help books of all time, while Rodgers and Hammerstein declared Oklahoma in song to be OK! in their eponymous 1943 musical.

There’s also the OK Corral in Tombstone, Arizona—but in this instance, OK stands for Old Kindersley and the infamous 1881 shootout that supposedly took place there but actually occurred down the street.

Internationally, OK has traveled remarkably well on the wings of American popular culture—and found a niche in the digital era, fitting easily into 140-character Twitter and text messages.

Using Google Glass eyewear, in fact, calls for a voice command that begins: “OK, Google Glass.” 


OK for getting by

“It’s a nice, short abbreviation and it fits abbreviations in other languages,” said Metcalf, the executive secretary of the American Dialect Society who teaches at MacMurray College.

It’s distinctive, yet easily pronounced and very readily understood … It uses the vowel O, the vowel A and the consonant K—and those are found in almost all languages of the world,” he added.

“So if you’re speaking with somebody who has a totally different language than you, chances are you can get by with gestures and OK in various tones of voice.”  

Metcalf, who blogs about the English language for the Chronicle of Higher Education, personally celebrates OK’s birthday by ordering up to four dozen frosted cookies with OK in green on a white background.


Enough alrady

In New York, retired English tutor Henry Nass has been pounding the sidewalks of Manhattan, handing out cards to passersby inviting them to celebrate “Global OK Day.” 

“Some people say OK too much. I can’t say there’s anyone who uses it too little,” Nass, who is making customized US postage stamps honoring his pet word, said in a telephone call.

Letting the anniversary pass without fanfare was Okay, Oklahoma, population 620, where residents trace its toponymy to the long-gone Okay Truck Manufacturing Company in the early 20th century.


No fanfare

Four hours’ drive from Okay, OK, as it’s known by the US Postal Service, is Okay, Arkansas—but don’t expect any OK festivities there, either. The one-time limestone quarry town has been all but abandoned for years. – AFP

Okay?



Photo credit: “Gunfight at OK Corral,” the Movie, dailymail.co.uk

Saturday, March 29, 2014

How these companies endeared themselves to us

The legendary CEO of The Coca-Cola Company, Roberto Goizueta, liked to tell this fascinating story to illustrate a company’s endearment value to its customers:

 Robert Kuan: Good customer care pays

“Imagine that by some strange twist of fate, all Coca-Cola bottling plants all over the world were burnt down, totally destroyed.  

“Admittedly, we would have a problem, short-term, but any bank in the world would be more than willing to provide the funds to rebuild.

“Now supposing you wake up one day and find out that brand Coca-Cola is simply not known.  A strange virus has wiped out the entire world’s memory.  No one knows what Coca-Cola is.  What do you have?  Nothing but idle plants.”

The Goizueta story is remarkable, but while a company’s economic values are staggering, they do not fully capture how much the brand is worth to its consumers.


Endearment values at ChowKing

There are other values which are hard to quantify.  Let’s call them the brand’s endearment values.

Two local brands stand out for their endearment values.  These two brands are as disparate as Chowking and St. Luke’s Medical Center, but they share common endearment values brought together by Robert F. Kuan.  

What ties Robert Kuan to the values of Chowking and St. Luke’s is a story as fascinating as Roberto Goizueta’s rise from a child immigrant from Cuba to become the iconic CEO of Coca-Cola.  It seems not coincidental but providential that the two men share the same first name.


The plunge

Robert Kuan, an entrepreneur who knew the fast-food business, plunged into the quick service restaurant (QSR) industry by founding ChowKing, which served Chinese dishes, in 1984.  

It was not the best of times to start a new business, and friends thought Robert was crazy.  But he reckoned, “In good times or bad, we all have to eat!”  And so began a journey of discovery that taught him valuable lessons in life that he nurtures to this day.

Robert has sold ChowKing to his friend and business partner, Tony Tan Caktiong, who himself was well on his way to building the international brand that Jollibee is today.  

Along the way, Robert recalls, “Chowking taught me many lessons. One of them, a very important one, is to share, to give back – with your employees, whose honest toil and caring concern made your success possible; and with the community, which has allowed your business to flourish.”


Servant-leadership

He continues: “The lessons of Chowking served me in good stead as I immersed myself in humanitarian work as chairman of St. Luke’s Medical Center. 

"I have moved on and upward, from having an eye focused on profit, to a new role as servant-leader – crafting the vision and mission of St. Luke’s, setting its direction, and building a culture of service founded on time-honored values.

“I found a way to fuse the business lessons I learned at ChowKing with the demands of service at St. Luke’s,” Robert Kuan concludes. “The social values we honed at ChowKing found a home at St. Luke’s.” 

Those values animated ChowKing’s brand attributes, and they now sustain Robert Kuan’s mission in life: to serve his fellow men. 


Social responsibility

Consumers imbibe these lasting values, not from traditional marketing communications, but from a company’s activities in Corporate Social Responsibility.  For example, Coca-Cola recently announced an initiative to recycle all the water it uses in bottling operations, estimated at seven liters for every liter of product.

A corporate reputation is an important strategic asset because it calls attention to a company’s “endearment” features. The phenomenal success of The Body Shop and Ben & Jerry’s ice cream was due in large part to their support of environmental causes. These efforts are enlightened investments that shine light on a prosperous future.

Our public utility companies – whether in water, energy, transportation or telecommunications – can learn a lot from these examples for free. As Yogi Berra once said, “You can observe a lot by watching.”

(The author is chief executive of a management think tank specializing in transforming social and political trends into public policy and business strategy. E-mail mibc2006@gmail.com.


Photo credit: Robert Kuan, inquirer.net

We adore these firms because they care for us

Intrigued by our discussion of how to improve the performance of our public utility companies like energy, several readers suggested listing down current best business practices. 

Porsche is up to speed in customer care:

Let’s call them a firm’s “endearment values.” These endearing qualities endow them with an aura that transforms them from being merely good companies to great ones. Here are 10 qualities of greatness (you can add more):

One – Great companies not only stay close to their customers – they are fiercely loyal to them.  In return, their customers remain fiercely loyal to them.

Great companies remain close not only in delivering performance or value satisfactions but also in interacting with customers at every opportunity.


Conversing with customers

In Germany, 60 percent of new Porsche owners like to pick up their cars at the factory to get a free tour of how their car was made..  Porsche executives find this an excellent opportunity to talk to their customers and learn more about them. 

In the local market, a BMW sales person or service advisor will keep in touch, continually informing you of new models or reminding you of service schedules. 

In return, customers reward these companies with the highest repeat purchase numbers in the industry.

Two – Great companies compete on superior value, not price.

A cup of coffee at Starbucks is not inexpensive, as is a pair of Levi jeans. Or, for that matter, Nike shoes. It’s not the coffee or the jeans or the shoes – it’s where they transport you.


Heroic deeds

Three – Great companies provide excellent service, not occasionally, but consistently.

They don’t over-promise, and are never late in responding to customer needs. 

My Domino’s pizza always arrives on time, unless the delivery guy gets into an accident, which has happened.  Foul weather or heavy traffic does not faze him.

Four – Great companies stretch themselves to achieve objectives.

They set goals to be the leader in their chosen market, not second best. They think long-term. San Miguel Corporation says it “shall be a premier company in Asia-Pacific.”


Think global, act local

Five – Great companies focus on their target markets sharply but adopt a global orientation to compete with the best internationally.

While they look beyond the horizon in defining their goals, great companies remain crystal clear about what they do, including the emotional benefits they provide customers.

Jollibee has grown to world-class status, but it’s brand personality is very Filipino.


Continuous improvement

Six – Great companies build customer loyalty by continuous improvement in product s and services. 

They keep on innovating; they never stand still. Look at the constant stream of new-and-improved shampoos and toothpaste you get from Unilever, Colgate-Palmolive, and Procter & Gamble.

They create significant advantages over competitors, not merely incremental improvements. They keep their core competencies inside the company but outsource non-core activities so they can focus on what gives them their competitive edge.


Customer care for employees

Seven – Great companies match their love for customers with caring concern for employees.

They invest in their people. They are picky in recruiting, relentless in retraining, and obsessive in retaining them. 

Barnes & Noble gives employees time to read so they can advise book lovers what to buy. Home Depot employees can tell you all you need to know to improve your home.

Eight – Great companies manage by values. Their core values are “non-negotiable.”

Great companies are authoritarian on values but participative on the details.They articulate their vision, mission, and values clearly and often. They align all tasks to their core purpose – why they exist.


They nurture their culture

Nine – Great companies nurture their culture.

They evolve a unique style of serving their customers. They worry about details. They sweat the small stuff.  

They learn from their mistakes. They obsess about their goals. They shape their history.  

At Nordstrom, employees keep a notebook to jot down “heroic” deeds of serving customers so that they can share these with the rest of the organization. 

Nordstrom employees will go to great lengths to please customers, like paying for an expired parking ticket because of a long line at the cashier’s. Or changing a customer’s flat tire at the parking lot.


They set trends

Ten – Great companies show masterful creativity and imagination.

They are always on the prowl for opportunities, and finding none, will create one. They can adapt trends quickly to benefit customers.

Nike rode the fitness trend with its running shoes. Danone exploited the health food craze with its yogurt.


They exist to serve customers

Thumbing its nose at the yuppie excesses of the 1980s, Lexus offered the luxury of a Mercedes Benz at a price reflective of the practical 90s. Even the richest man in America, Bill Gates, could not resist and bought a Lexus.


Great companies are agile, flexible, competitive, creative, imaginative, innovative, trendy, cool, practical, caring, revolutionary – and visionary. 

They exist to serve their customers.


Next: Where public utilities can learn to love customers.


(The author is chief executive of a management think tank specializing in transforming social and political trends into public policy and business strategy. E-mail mibc2006@gmail.com.)


Photo credit: A racing Porsche, enwikipedia.org

Friday, March 28, 2014

Try smelling the coffee to craft energy strategy

Why is Starbucks so successful when all coffees come from the same beans?

When nuts are tough to crack, take a break

A reader sent that question in response to yesterday’s blog, where we introduced the concept of approaching the energy crisis as a management problem -- and using tools from the managerial toolbox to fix it.

Obviously management aficionados, several readers requested for more concrete examples of successful management interventions. 


The classic 4M’s

If we are to think of energy as a business enterprise, what would make people work together to make it succeed?  A quick review of basic management concepts will help.

In the classical model, business organizations are made up of Men, Money, Machines and Materials. These 4M’s are the building blocks of business, or “hardware,” in current lingo.

To make them produce profits, we craft “software” to give our products and services an appealing uniqueness to customers better than our competitors’ offerings. The software components are: People, Organizational Structure, Systems and Technologies, and Culture.


Competitive edge

Current management thinking suggests that all companies have access to the 4M’s. Putting them together using their unique software imparts the competitive edge.

Thus, among the software components, “culture” has emerged as “the glue that binds” all the elements together to make the company succeed. 

Today, all businesses express their goals in inspiring language everyone in the organization can understand. They call this their Mission, Vision and Objectives statement.


Shared values

The organizations that succeed have found an even more enduring fourth element: a system of values that they share and consider “non-negotiable.”

The value system answers these basic questions: 

“Why do we exist?” 

“What is our reason for being?”

“What is the single ingredient that once removed will cause our enterprise to fail?”


Sustainability

In the search for a sustainable competitive advantage, companies are putting less emphasis on money, men, machines and materials. Shared values, which express the corporate culture, spell success.

But values change over time because successful corporate culture must adapt to shifting customer needs.  How deftly the company adapts to changing customer expectations separates the quick from the dead.

Now the hard part: How do we apply these principles to our present task? Here are a few concrete examples:

That coffee aroma

--Starbucks found a business opportunity in the need of harassed urban dwellers to slow down once in a while to smell the coffee.

Starbucks noted the harassed lifestyle of the urban dweller and, instead of catering to this fast-paced life, offered quality time to linger and enjoy a great cup of coffee while curling up with a book. 

--Barnes & Noble brought back the joy of intellectual exploration and discovery in buying a book.

It’s show time!

--Disney employees relish the thrill of a Broadway performance.

At Disneyland where entertaining customers is a core value, employees have developed a unique vocabulary borrowed from Broadway: employees are “cast members,” show time is “on stage,” break time is “off stage.”

--Nike products celebrate the joy of victory and athleticism. 


Culture vultures

--Nordstrom employees like to delight customers with passionate dedication.  They nurture their culture.

At Nordstrom, employees keep a notebook to jot down “heroic” deeds of serving customers so that they can share these with the rest of the organization. They will go to great lengths to please customers, like paying for an expired parking ticket because of a long line at the cashier’s.

Successful companies show masterful creativity and imagination.

Sweet smell of success

They are agile, flexible, competitive, creative, imaginative, innovative, trendy, cool, practical, caring, revolutionary – and visionary.  They are led by visionary leaders who have soul. 

They all have one thing in common: they talk to their customers and they listen … with their heart. 

Those are some of the qualities we need to solve our energy crisis.

Next: Terms of endearment -- Why we love these companies

(The author is chief executive of a management think tank specializing in transforming social and political trends into public policy and business strategy. E-mail mibc2006@gmail.com.)

Photo credit: guardian.com.uk

Thursday, March 27, 2014

Senator's solution to energy crisis: 'You’re fired!'

Uniquely among the protagonists in the energy debate, Sen. Sergio Osmena III has chosen to treat it as a management problem. He departed from the usual rational approaches to the energy problem when Osmena blamed President Aquino and Energy Secretary Jericho Petilla for the country’s power supply woes, calling both officials “awful managers.

Energetic Secretary Jericho Petilla at work on site

Osmena’s non-traditional approach could be criticized as being personal and/or political. After all, he was a key strategist in getting Mr. Aquino elected in 2016.  Osmena is also allied with the Lopez group of companies, which has substantial interests in energy production and distribution. But, as chair of the Senate committee on energy, he is also as well versed as any legislator on energy.

Because he is taking a new approach to energy, it is worth examining his views on management. Let’s hear out his views on energy as a management problem.


‘Good politics, bad economics’

Off the bat, Osmen says the decision of the Energy Regulatory Commission (ERC) to void the huge rate increase that Manila Electric Co. (Meralco) imposed after the power shortage in late 2013 was “good politics but bad economics.”

“If we do this again, the investors [who will put up the power plants] will not believe us again anymore. We’re going to have real shortages decades ahead,” Osmeña told reporters.

He said he advised the President to fire Petilla two months ago but Aquino ignored him. While the energy secretary is an able executive, his mind is divided between doing his job and politics, Osmena believes.


‘Not focused’ 

“I told the President to fire him two months ago because he is not focused,” he said.

“You know … managing is not an easy profession. And he (Aquino) is a very poor manager, we know that. He is a good man, he is an honest man, but he is an awful manager.”

Besides the power rate hike that has been stopped by the high court, the executive branch has yet to resolve the power crisis in Mindanao and speed up the snail-paced restoration of power in disaster areas, the Inquirer reported

“We would not be having this type of problems now if they were good managers. We really would not,” Osmena said.   


‘No planning’

Osmeña said there was no planning on the part of the Department of Energy (DOE) when the power shortages in Luzon started on Nov. 11, 2013.

“You knew three years ago that Malampaya is down for maintenance,” Osmeña said.

He said if he were Petilla he would have told the government-owned Malaya power plant to make an offer on the Wholesale Electricity Spot Market and make available its 600 megawatts of power.

“Nothing like that happened. Why? Super Typhoon Yolanda hit on Nov. 8 and it hit his province,” Osmeña said.


Preoccupied

“So, right away he was diverted. Suddenly he had two huge problems, when he should have taken care of only one big problem that happened because it was under his specific jurisdiction, the Department of Energy,” Osmeña saidd.

“But no, he was running around in Leyte. Emotionally, I can understand that. But wait a minute, who is running, who is taking care of the energy problem, which is affecting the whole of Luzon?” he said.

“I have been observing him and I don’t like what I see. Not because he is not gifted, he is very intelligent, but because his mind is elsewhere,” Osmeña said.


‘Accept mistakes’

As for Aquino, Osmeña said the President should sometimes accept that he has made a mistake.

“…when you’re willing to accept that you made a mistake, it’s easier to correct it. I am not saying that the corrections we’ll make will be ideal, but first, you accept that you made a mistake. Then, ‘yes, we will make corrections,’” Osmeña said.

There is some value to Osmena’s approach.  In management schools, when a management problem becomes a tough nut to crack, professors suggest taking a backward step to look at issues beyond the obviously rational. Issues like the ones Osmena is discussing: personal and political. They provide insights to what may be really causing the problem.


Management precepts

Uhmm.  Osmena might be on to something here.  Let’s take his approach a little further – all the way back to Petilla’s predecessor, Energy Secretary Jose Rene Almendras.

Before joining the Aquino government in what is turning out to be a thankless job, Mr. Almendras worked at several jobs in the private sector. Two of those jobs were with the Aboitiz group as treasurer and with the Ayala group as president of its water utility firm.

Both companies are in power generation, which puts them under the regulatory umbrella of the Department of Energy. It was a potential conflict-of-interest situation which confronted Mr. Almendras.


Hear him first

In the wake of the energy summit in Davao City in the summer of 2012 -- which pleased no one and possibly displeased everyone -- Mr. Almendras spoke out candidly about his travails. Following are excerpts from an interview he granted a Manila daily before the energy summit. It is best that we hear him verbatim. Following are his remarks:

“A year and 10 months into the job, I realize that I can’t play for today’s game the cards that I’m holding. As I’ve said, it’s a nightmare for any energy minister to come up with the right energy mix, which will be realized five or 10 years from now.”  

“And maybe it’s my personality. I’m boring. In my whole lifetime, it’s just all about doing the best you can and never mind what happens and that maybe went against me. I really should have made more noise.”  


Find a way

“I should have found a way to solve the Iligan problem so that the facility could have provided 100 megawatts for Mindanao. Lawyers tell me there’s nothing I can do, but I think I could have done something if I pursued it.”  

“I wish there was a way we could have gotten those electric cooperatives to sign the power-supply contracts because there was available generation then of as much as 200 MW but was not being used because no one was buying.”  

“I am not blameless. We had a plan and my failure was in executing the plan. I can say yes, we were lacking on some respects, particularly in implementation … 


Price to pay

“I tried, but (the issues and the solutions) are not all within our powers. I’m not saying we’re blameless, I’m responsible—I even offered to step down.”  

 “People seem to have forgotten that my first order in 2010 resulted in a revenue reduction of almost P400 million for the Aboitiz group over the use of ancillary services in Mindanao.” 

“I cannot evade that perception with my previous connections with them. The best for me is to get out of this job. But definitely, I can face anybody in the eye and say I have not done anything that will favor anyone.” 


‘Kick me out’

“So please sign the petition to kick me out of this job.” 

“I’m ready and willing to get out of this job. I did not volunteer for this job. I have no plans of staying on this job forever.”  

“It’s a decision I made to help the country and I have to pay for it.” 


Management lesson

These are the dynamics of the energy problem. They are as important as the rational arguments. The solutions will have to factor them in to succeed.


Next: Customer service lessons from the private sector 

(The author is chief executive of a management think tank specializing in transforming social and political trends into public policy and business strategy. E-mail mibc2006@gmail.com.)


Photo credit: Secretary Petilla at work, inquirer.net

Using 'Engineering of Consent' to break gridlock*



*For the science, see: 'I'm Ok, You're Ok' a good read for hated utilities, March 31 



President Aquno and Energy Secretary Jericho Petilla find themselves in the center of a perfect electrical storm after Sen. Sergio Oseman III went to town assailing them as “awful managers.”

The lump-sum description begs the question, If the two were better managers, how might they solve the energy crisis as a management problem? 

Phrased anither way, Are there sime things in the management toolbox that they could use to save tgem from the oppressive opprobrium "awful managers"? (*For lessons in pop-culture psychology, see: "i'm OK. You're OK" a good read for hated utilities, March 31, 2014.)



Private-sector executives are used to serving multiple stakeholder interests, such as those we find in the political killing fields.

Executives are also used to finding a common ground in serving opposing interests to produce a profit for the enterprise. 

To do this effectively, managers become adept at using all the tools available in their management toolkit to build a consensus among diverse stakeholders.


Consulting

One effective way to build consensus is to consult with all stakeholders before making a decision so that their particular interests are ventilated and addressed fairly. 

In the end, the best course of action may require biting the bullet and making adjustments here, there and everywhere. 

When consulted as part of the decision-making process, stakeholders generally are willing to make adjustments to achieve the common good.


Uproar

For the lessons it may impart, contrast this consulting process, which we may call the "engineering of consent," to the Mindanao energy summit in 2012.  

After the stakeholders presented their positions, President Aquino delivered the government prescriptions.  The reaction was almost a unanimous uproar.

Ronald Barrios, a member of the Kidapawan Chamber of Commerce and Industry, said: “We are disappointed that the President ignored the general sentiment of the Mindanao people.”


Consensus ignored

“It was obvious that the President had already made up his mind not to listen to the consensus reached in the summit’s morning session because his prepared speech was opposite the stand made by Mindanao,” he said.

Thus the summit pleased no one and possibly displeased everyone. The summit participants had hoped that the President came to listen to all points of view first before delivering a policy statement.

The policy-making process was curious because if Mr. Aquino were a private-sector CEO, he might have adopted a tried-and-tested approach to building consensus: listen to all sides first before making a decision.

What happened?


Nobody happy

After the summit, consumers and business and political leaders in Mindanao were disappointed with President Aquino’s response to the power crisis.

Various sectors, including the Association of Mindanao Rural Electric Cooperatives (Amreco) alleged that the state-owned National Power Corporation (Napocor) had “fabricated” the power shortage to force the government to sell the Agus-Pulangi hydroelectric complex to private firms.

Davao City Councilor Leah Librado said the summit served merely as “theatrics” to make it appear that the people in Mindanao were heard.


Listening skills

Mr. Aquino has his job cut out for him. Aside from his problem-solving skills, it seems he also has to sharpen his listening skills, considered mandatory for survival in both the public and private sectors.

Just by listening first to the summit discussions, Mr. Aquino might have appeared more responsive in prescribing a three-pronged managerial approach to the energy crisis: quick-fix solutions to relieve the power crisis immediately, medium-term solutions to buy the government time, and an open mind to explore alternative energy resources to address the long-term problems.

Nexr: Senator's solution to energy crisis: 'You're fired!'

(The author is chief executive of a management think tank specializing in transforming social and political trends into public policy and business strategy. E-mail mibc2006@gmail.com.)

Tuesday, March 25, 2014

Energy crisis song: 'Hello darkness, my old friend'

In the 60s hit tune “The Sound of Silence,” the poet of song, Paul Simon, crafted the words that would echo in the energy summit in Mindanao some half a century later: 


The Three Wise Monkeys...

Hello darkness, my old fiend
I’ve come to talk with you again …

People talking without speaking

People hearing without listening

Those four lines described the discussions on the power crisis in Mindanao in 2012.  Many people were talking, but not one was listening.  Listen to this report from the Inquirer correspondents in Davao City:

Mindanao governors have reiterated their stance against the national government’s plan to sell power facilities to private firms as a way to solve the energy crisis on the island.


Amend the law

During the Mindanao Power Summit last Friday, Davao del Norte Governor Rodolfo del Rosario, president of the Confederation of Provincial Governors, City Mayors and Municipal Mayors League Presidents (Confed), conveyed to President Aquino the group’s stand against privatization of the Agus and Pulangi hydro-power complex.

Del Rosario even asked the President to certify as urgent amendments to the Energy and Power Industry Reform Act (Epira), but the President hardly listened when he told the summit that years of Mindanao’s cheap power were over.

On Monday, Aquino said he would be willing to have more dialogues with stakeholders in Mindanao’s power industry, but also hinted that privatization of the plants would be the best solution to the problem.


Fix plants, don’t sell

On Tuesday, the governors insisted on their positions – no to privatization, and a review of the Epira law.

Surigao del Sur Governor Johnny Pimentel said that instead of selling the power plants, government should rehabilitate them.

“It would be better for us stakeholders just to rehabilitate our power generation assets than privatize them,” Pimentel said.


Unreasonable prices

Agusan del Sur Gov. Eddiebong Plaza said he feared that giving up government control and regulation over the plants would lead to unreasonable increases in power costs.

“My apprehension is that privatization might lead to unreasonable power pricing and result in monopoly,” Plaza said.

Agusan del Norte Gov. Erlpe John Amante said privatization would mean higher power costs that would work to the disadvantage of Mindanao’s ability to attract the much-needed investments.


Consumers will sufer

“Privatizing the power plants, which currently provide us cheaper source of power, would lose Mindanao’s advantage to attract more investments because power cost would surely increase in that event,” Amante said.

South Cotabato Gov. Arthur Pingoy, on the other hand, said people would suffer the high cost of electricity if these power plants were privatized.

“We already passed a resolution for our position. Definitely, once these are sold to private companies, electricity cost will increase,” Pingoy said.


Stop, look, listen



North Cotabato Gov. Lala Taliño-Mendoza expressed the hope the President would listen to them eventually.

“We wish he (Aquino) would take a second look at our resolution,” Mendoza said.

Davao del Sur Gov. Douglas Cagas agreed, saying: “He already heard the sentiments of the people of Mindanao during the summit. Although he has the power to exercise as President, he must also review our resolution.”


Hydro plants profitable

Del Rosario on Friday said the National Power Corp. (Napocor) should rescind the Operational Management Agreement (OMA) with the Power Sector Assets and Liabilities Management Corp. (PSALM). It required Napocor to remit all its gross receipts to the latter, including those coming from the Agus and Pulangui hydropower complex.

“Let’s shatter the myth that the Napocor and the Agus-Pulangi complex are a losing proposition,” Del Rosario said. 

The nine-year annual income of the government power generation firm posted an annual gross generation average of P36.9 billion, with an average profit margin of P73.2 billion, he said.


‘Too much’ private profits

The Davao del Norte governor added that the present situation would only turn from bad to worse should the government sell these power plants to private energy firms.


“It is bad enough as it is. It will be intolerable once it is surrendered to the private sector,” he said.

Del Rosario also called on the reclassification of the power generation sector as “utilities” and place caps on these firms’ profits. 


Protect the consumers

He said some independent power producers (IPPs) have earned up to 50 percent return on rate base, “which is too much.”

“Just a one-centavo-per-kilowatt-hour increase imposed nationally translates into a P670-million annual income,” said the governor. 

President Aquino should now appoint a Mindanao consumer group representative to the Energy Regulatory Commission, he added.


Pursue dialogue

Misamis Oriental Gov. Oscar Moreno said the Power Summit in Davao City opened the discussion between the government, the electric cooperatives and the stakeholders. 

“We should pursue the discussion, that is the best we can do,” Moreno said.

Paul Simon continued:

But my words like silent raindrops fell
And echoed in the wells of silence.

Next: The engineering of consent is zapped.

*Photo credit: "The Three Wise Monkeys," en.wikipedia.org

Monday, March 24, 2014

Tsunami of voices swamps energy crisis summit

Addressing an urgent summit on the energy crisis in Mindanao in the summer of 2012, President  Aquino dismissed the widespread opposition to the sale of the state-owned Agus-Pulangui hydroelectric plants and warned Mindanao’s residents they would have to pay more or brace for more brownouts.

He was met with a Babel of discordant voices:

“You have to pay more because this is the reality of economics, not the rhetoric of politics,” Mr. Aquino said in his keynote address, the Manila Standard reported. “Everything has its price.”
  
“There are only two choices: pay a little more for energy or live with the [rolling blackouts],” the President said.  “(T)he old days of cheap power are no longer sustainable.”

He said that, over the years, the government’s inefficiency in operating the Agus-Pulangi plants and other assets led to P1.3 trillion in debt for National Power Corp.

‘Nothing was resolved’

Before he spoke, businessmen, local executives, power cooperatives, environmentalists, lawmakers and civil society groups had taken a unanimous stand against the privatization of the Agus-Pulangui hydroelectric power plants, the use of expensive power barges, the interconnection with Luzon and the Visayas power grid, and higher electricity rates.

After four hours of presenting their position by sector in the morning, they submitted their position to the President, who locked horns with them despite an earlier promise to heed the consensus at the summit.

“Nothing was resolved,” Agham Rep. Angelo Palmones said.  “The President’s position was drawn and completed even before the summit started and outside of the fruitful exchanges of ideas and concerns of the stakeholders.”


'Gravely misinformed'

Bayan Muna Rep. Teddy Casiño added: “The President has obviously already made up his mind even before he came to the summit. He did not even bother to listen to the voice of Mindanao.”

Casiño said the President seemed “gravely misinformed” about the negative impact of power privatization in Mindanao, the facts about renewable energy. and the failures of the Electric Power Industry Reform Act.

“It was a truly disappointing exercise. The morning session was great but things turned sour when the President spoke.”


‘Hydro earned P7 billion a year’

Ricardo Juliano, vice president for Mindanao of the Philippine Chamber of Commerce and Industry, said. “The government has failed despite our warning of power outages since two years ago. We see no need for privatization and interconnection with Luzon and the Visayas.”

At the open forum, Menchie Ambalong, representing the civil society group and the Mindanao Commission on Women, informed the President of the united opposition to privatization and said the government’s inefficiency should not be an issue because Agus-Pulangui earned P7 billion a year.

Ambalong and Juliano, who joined the debate, were applauded by the 350 delegates to the summit.


'Government inefficient'

Mr. Aquino insisted that the government was inefficient in operating the plants. “We know for a fact that the government is inefficient in operating the Agus-Pulangui and other assets and the debts that resulted from that inefficiency were even bigger than the national budget,” he said.

“You insist on operating it? So who would spend for the rehabilitation?”


Hydro loses a ‘myth’

Davao del Norte Gov. Rodolfo del Rosario, president of the Confederation of Provincial Governors, City Mayors and Municipal Mayors League, said investors might start shunning Mindanao.  

“In Mindanao cheap hydro power is the only incentive that could attract investors and drive commerce and development,” he said. 

“Let’s shatter the myth that the Napocor and the Agus-Pulangui complex are all losing propositions,” he said, noting that the state-owned power company earned P73.2 billion at P2 per kilowatt hour from 2003 to 2011.


‘Our competitive edge’

The President’s ally, House Deputy Speaker for Mindanao Isabelle Climaco, spoke out against privatization. 

“Electricity rates provide the competitive advantage of the region that is stricken with insurgency and peace and order problems.”

The Mindanao Legislators Association, led by Misamis Occidental Rep. Loreto Leo Ocampos, signed a resolution calling for a stop to the privatization of the Agus-Pulangui.


Aquino: ‘All must share costs’

In his keynote speech, the President said:   “But, still, prices will increase, and you need to play your part.” 

He cited the cost of building hydroelectric power plants, which could run up to P170 million per megawatt. He said it also cost $2 million per megawatt on the average to build a coal or natural gas power plant.  

“These are costs all of us must share,” the President said.   


'I will step on you'

Earlier, the summit organizer made clear that she would not tolerate “Noynoying,” a form of protest in which demonstrators sit and do nothing to mimic the President’s perceived tendency to procrastinate.

“I told them, don’t lie down on the streets or I will step on you,” said Luwalhati Bautista, chairwoman of the Mindanao Development Authority.

The civil society groups that oppose the government’s energy policies on the island were given only two seats at the summit, the Manila Standard reported. 

Next: Hello darkness, my old friend

Photo credit: freebibleimages.org