The Case
After decades of business as usual in the highly regulated electric utilities industry, Southern California Edison found itself in a dramatically new marketplace by the late
1990s.
Deregulation was sweeping the country and SCE's territory, California, was in the forefront of change. It started in 1994, when the California Public Utilities Commission
proposed a restructuring of the industry to stimulate competition. Some of SCE's traditional roles, such as power generation, had to be sold off to outside companies, while other
corporations began to compete for its customers. While SCE had reduced its workforce in the past through attrition, it suddenly had to downsize, dropping from 18,000 to 14,000
employees in the space of about three years.
In the old, regulated environment, SCE had been a pretty compartmentalized organization, , according to Barbara Brown, manager of internal communications. In this marketplace,
the company had to become much more integrated and place more emphasis on internal communications. "Traditionally we had done a much better job communicating to customers than
internally," she says.
Outside Agency Provides Perspective
By the end of 1998, SCE had concluded its internal communications needed reorganization. "We... needed to do an extensive effort that was very focused," she says. The company
elected to engage an outside PR firm, one with a strong internal communications practice. "One of the things we wanted to do was a lot of interviewing," Brown explains. "I think
it helps to have a third party do that. People are a little freer, especially when you have the executives talking, [and] talking about other executives at times."
The company chose Ketchum Sheppard to get an honest assessment of its internal communications from two perspectives - top-level managers and front-line workers. The KS team and
company representatives decidedto conduct highly structured interviews with 22 SCE executives and senior managers (those with oversight of both line and staff teams), taking
care to ask everyone the same questions.
"Executives are more comfortable with discussion rather than a strict Q&A process," explains Roger Rittner, senior VP of Ketchum Sheppard and team leader on the project.
There's a balance between making sure the interview is informal enough for the executive to speak freely and structured enough to cover the topic, he observes.
On the other side of the equation, the KS team set up seven focus groups with employees drawn from all over the service territory. The focus groups addressed questions such as,
"How does internal communication work? Do you suspect it's being filtered? How do you get your information? Is your manager a good communicator?" Rittner says, information that's
far less specific, more environmental, than the executives' interviews. "We're looking for recurring themes... We often find the information from the executive interviews tends to
reflect the communications intent - here's what the company wants to do, thinks it's doing - while what we get out of the focus groups is the reality. [That] gap analysis is
what's most valuable."
Once all the input was gathered and analyzed, KS provided specific action items for SCE. "They decided to implement them themselves," Rittner says. The agency would have liked
to assist in the implementation, but Brown says there were cost constraints.
"The Sheppard research [validated] our approach to internal communications, which is to localize it," Brown says.
The KS team and SCE communicators jointly refined recommendations that top management agreed to implement. "The best part is when you can actually do something," Brown
laughs.
One specific recommendation that came out of the assignment was integrating the process, not the structure, of internal communications, to ensure that messages are consistent
and the flow of information across the company is coordinated. To accomplish that, the SCE Communications Network was formed, a group that meets monthly to address internal
communications issues.
The biggest benefit, Brown thinks, was the company's decision to include a communications module in SCE's new management certification program. All the managers in the company,
some 800 people, have to go through the program, which includes sections on leadership, business acumen and management responsibilities, along with communications.
"From my viewpoint, getting this mandate [from corporate management], getting the communications module into the management certification program, was a direct result of the
positioning from the research by Sheppard," Brown says. "It was such a clear mandate ... it made it possible to sell that kind of component into the [program]."
(Brown, 626/302-7877; Rittner, 818/247-9877)