Lights Out for SoCal Edison

It‘s still hard to believe that it has come to this.

Hard to believe that a blue-chip electrical utility that has been operating successfully for more than a century has just been pummeled to near death in the past nine months. Hard to believe, considering the wellspring of talent and wealth that Southern California Edison could draw upon, just how flat-footed the company was caught in the crisis. Hard to believe that such a venerable corporation could misjudge and mishandle a crisis so completely that it was forced to fire more than 1,800 of its workers -- and put hundreds and maybe thousands more in the cross hairs.

Hard to believe, that is, unless you work there.

For if you have spent any amount of time walking the halls at its imposing “G.O.” (general offices) in Rosemead or sat through any number of three-hour meetings at its state-of-the-art conference center in Irwindale, just how a bewildered SCE came to the brink so quickly is hardly a mystery at all.

The short version is this: SCE was so good at what it did for so long -- generating and delivering electricity relatively cheaply and very reliably -- that when the tidal wave of this crisis started to swell in the distance last spring, the ranking brass on the poop deck merely noted it, maintained course and ordered the band to play a little louder. There was a massive, pervasive disconnect, one that seemed to stretch from the water cooler to the executive boardroom. Even as unmistakable signs of impending doom began mounting, there seemed to be an Alice in Wonderland quality to the atmosphere at Edison. Everything was going to be all right. Why? Well, because it just had to be. After all, we’re SCE . . . the Power Behind Peace of Mind.

I‘m no expert in the history of corporate America, but SCE’s botched response to the energy crisis has to rank as one of the all-time great failures of a major company when its ass was on the line.

The most striking element of the collapse is that, at nearly every juncture since the onset of the crisis, SCE has failed to make its case effectively to its customers, its shareholders, government officials, the people of California and the nation. A disastrous combination of corporate arrogance -- where we made the mistake of believing our own myth -- and a fanatical adherence to a command and control structure produced the slow-motion shipwreck that‘s been unfolding for the past nine months.

SCE failed to understand that the dangerous currents swirling around it in the fast-moving new market ultimately required a political response -- and in politics, public perception is everything. Yet we clung to our management organizational flow charts like a condemned man would a Bible on his way to the firing squad.

More devastating is the fact that we’ve lost the confidence of some of our biggest customers, a bleed-out that has been occurring for months.

According to a report circulated among top management last month, SCE‘s efforts to rally its biggest (and therefore best-treated) customers to its aid fell flat. In December, SCE appealed to more than 1,400 of its top customers, pleading with them to write the governor in support of its position. Only 180 companies agreed to do so.

The meltdown of support among our customers and the public at large finally seems to be sinking in among the top management, as their near-daily e-mail dispatches to the troops are taking on an ever more desperate tone. Taking shots at the media is a favorite of late.

SCE president and CEO Stephen Frank fired off an e-mail to all employees two weeks ago deriding the “no-news that’s capturing all the headlines” over the fact that SCE transferred $4.8 billion to its parent company, Edison International (EIX), during the past four years. He decried the “critics‘” misinterpretation of the audit’s conclusion -- though Frank apparently felt few of us had seen EIX president and CEO John Bryson on KNBC just a few weeks earlier, flatly denying on camera the same figures we were now conceding.

For many of us in the company, there is a simmering bitterness over the crisis and its impact on SCE employees that makes the rage of professional mouth-off Harvey Rosenfield seem pale in comparison. It is a bitterness that springs from the belief that people like Bryson, Frank, SCE senior vice president--customer service Pam Bass, EIX vice president--corporate communications Andrea Simpson and other top executives responded to this crisis with all the effectiveness of the United States‘ Navy fleet commanders at Pearl Harbor, circa December of 1941. We got bombed, and they were out golfing.

Of course, uttering such thoughts -- never mind committing them to paper for publication -- is still pure heresy to many at SCE, particularly in management. This cadre of party-line apparatchiks is the sort who dress in Edison-label clothing on casual days, policy wonks whose idea of a good time is using 15 industry acronyms in a single sentence to impress fellow propeller-heads. If there were an Edison song, they’d sing it, proudly.