Real-time strategy implementation in the electricity industry

[摘要] English: This study focuses on the electricity industry with specific referenceto the manner in which organisations in the industry implementstrategic plans. The electricity industry was chosen in particular as itoperates in an increasingly complex and volatile environment.Restructuring and deregulation are phenomena that occur currentlyin electricity markets across the world. Organisations that oncefunctioned in a protected, monopolistic environment are now enteringthe era of full competition. In their traditional approach to strategicplanning, electricity organisations generally utilise one-year planningcycles. This study focuses particularly on testing the concept of realtimestrategy implementation in electricity organisations as analternative to using planning cycles.The empirical research for the study was conducted in the UnitedStates of America. Included in the sample were four of the largestelectricity holding companies in that country. The United States ofAmerica was specifically chosen because the electricity industry inthat country was one of the first in the world to introduce acompetitive market for electricity.Through this study a number of gaps were identified betweenstrategic planning and strategy implementation in the electricityindustry. These gaps led increasingly to the general perception thatstrategic planning is ineffective in the industry. In summary thesegaps are:(a) The problem of responding to isolated and unpredictable issuesthat arise in a volatile and complex industry situation and thathave the potential to erode the current competitive position of theelectricity utility.(b) The restructuring of the industry and the subsequent unbundlingof the vertically integrated nature of many electricity utilities,giving rise to conflict between business units and corporatestrategy issues. This tends to reduce strategic planning to thelevel of a business review process.(c) The associated issue where the strategic planning processemployed is often too time-intensive for senior management toparticipate in, or it cannot provide the leverage required to getmaximum value from the time that senior personnel are able toinvest in the process.(d) Despite the existence of strategic instruments like industryanalysis and competitor analysis, most of the strategic planningprocesses in electricity utilities remain highly introspective ofnature.(e) A general problem of linking the resulting strategy with explicitmeasures of success and associated tracking systems.The following are the most important recommendations based on theresults of this study:(a) Top management should build a solid foundation for theimplementation of strategy in real-time. This should be donethrough their visible commitment and voluntary involvement instrategic planning and strategy implementation, building thestrategic capabilities of the organisation and implanting strategicautonomy throughout the organisation.(b) Real-time strategic planning processes need to be initiated,including intensive and ongoing situation analysis andimplementing initiatives to resolve strategic issues at marketspeed.(c) Effective strategy support systems and processes need to beimplemented. This includes information support as well asensuring effective integration of strategy throughout the entireorganisation.(d) Effective strategic alignment of the entire organisation isrequired. This includes the linking of effective performancemanagement processes to the strategy of the organisation andmulti-level involvement of as many employees as possible instrategic planning and strategy implementation.Further recommendations for the implementation of real-timestrategic planning systems include the following guidelines:(a) Involvement of top management in strategic planning andstrategy implementation is a prerequisite for strategic success.(b) Organisations should allow for autonomy in strategic decisionsby lower levels of employees and departments.(c) Real-time strategy systems should be designed as effectiveinformation systems.(d) Strategic objectives and strategies should be reviewed on areal-time basis.(e) Strategic planning cycles should be discarded to allow for realtimestrategy implementation(f) Performance contracts should be negotiated on a consensusbasis, including aspects of performance expectations from boththe subordinate and the manager, and between differentdepartments.(g) The use of comprehensive and complex written strategicplanning documents should be discarded.(h) Strategic control should be implemented through the use of abalanced scorecard.

[发布机构] University of the Free State