A centennial utility decided that it was not capable of producing the capital to re-tool and deal with the pace of change. Instead, the company chose to wring out costs by replacing experienced workers with new and relatively untrained people.
Those mechanical manipulations made the rates stable, for a while. During the halo period when the revenue and expenses kept pace, the decision-makers accepted a buy-out offer…the pot was just too sweet! As the service deteriorated, costs soared, turnover continued, and local rates increased every six months. Local control was gone and cost decisions were made by state regulators.
The dam burst because the local management and control that could have solved the problems—through joint action and strategic planning—chose the quick and easy way out.
The moral of the story?
Unless your exit strategy is to plump up the bottom line, sell for whatever you can get and run off to the Bahamas, you need to lead change – or be prepared for changes you probably won’t like.