Wednesday, March 19, 2008

On the road in Miami

I am on the road this week down in Miami attending a Palladium conference on "Developing a Dynamic Strategy". I felt compelled to do a quick post on one of the speakers this morning since there were some interesting points that he made during his presentation. The image to the left is the Biltmore Hotel where the conference is being held. It is a very historic hotel with a great golf track where Bobby Jones would frequent back when golf clubs were actually made of materials like wood!

Ralph LaRossa from PSE&G gave an entertaining overview of how his organization links their strategy to the operations of the business. As a utility company, PSE&G has a focus and strategy built around areas like safety, customer focus and environment. They seem like pretty basic concepts, but what was interesting was how they actually tied these strategies to operational metrics. For example in the area of safety, they track number of incidents and duration of leave for an employee associated with accidents. PSE&G then takes it one step further and measures themselves against industry benchmarks in the utility industry. They use their measurement system across the entire organization to drive visibility and accountability. PSE&G shared positive quantifiable results across their measurement system and have become leaders against their peers.

From a compensation perspective, Ralph provided insight into how employee contribution and compensation ties back to the performance of the organization. They have a well defined compensation system that makes ultimate company performance a function of how individuals will be compensated. This allows everyone from the field to understand how their role and how measures associated with safety and customer satisfaction impact the strategy and ultimately the performance results.

Like I said, Ralph was very entertaining. He had some funny anecdotal stories about being a company based in New Jersey and made many references to The Sopranos. During the Q&A at the end, I wanted to get his thoughts on the final episode, but I thought better of it.

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