CONTACTS 
0201 - PG&E CEO                           Telephone;   fax or 800...
020101 - Mr. Gordon Smith; Chief Executive Officer

SUBJECTS
Demonstration for New Users
Locate Decision Maker
PG&E, Lee Calloway

1005 -
1005 -    ..
1006 - Summary/Objective
1007 -
100701 - Follow up ref SDS 6 1080, ref SDS 1 2515.
100702 -
100703 - Article on PG&E's Transmission subsidiary headed by Gordon Smith says
100704 - they need to improve profitability.  One approach is to increase
100705 - rates.  Another might be to improve PG&E's management, which some have
100706 - found is indecisive. Gordon's message to PG&E staff in September
100707 - called on improving communication, which reflects Peter Drucker's view
100708 - that profitability comes from good management, which is primarily a
100709 - question of "communication."
100710 -
100711 -
100712 -
100714 -  ..
1008 -
1009 -
1010 - Progress
1011 -
101101 - Received article ref OF 3 5423 from San Francisco Chronicle on page E1
101102 - of the Business Section.
101104 -  ..
101105 - This article explains PG&E's top priority to improve earnings in the
101106 - face of deregulation, ref OF 3 3122, ref OF 3 1750, and also noted at
101107 - ref OF 3 6394, which reflects the need for better communication cited
101108 - by CEO Gordon Smith in the record on 970908. ref SDS 1 2515
101110 -  ..
101111 - The article highlights Smith's career at PG&E, strong in finance.
101112 - ref OF 3 3337  Smith's father had a successful career at PG&E.
101113 - ref OF 3 5637
101115 -  ..
101116 - Smith is accountable for results -- the article says he is on the "hot
101117 - seat." ref OF 3 4499
101118 -
101119 -     Can Smith's chances of success be improved by accountability below
101120 -     his position, per discussion with Bill Dehart later this morning?
101121 -     ref SDS 8 5065
101123 -      ..
101124 -     The disjunction between Smith being accountabile for results, and
101125 -     lower managers avoiding accountability, seems like "strategic
101126 -     dissonence" cited in Andy Grove's book "Only the Paranoid
101127 -     Survive." ref SDS 7 5517
101129 -  ..
101130 - Smith says PG&E has "...a long way to go," to improve profitiability.
101131 - ref OF 3 6772   The most direct way is to raise rates. ref OF 3 1326
101133 -  ..
101134 - Opposition to raising rates centers on an arguement that having been
101135 - granted rates to recoup "stranded" costs, PG&E should carry the risk
101136 - of the cost for upgrading the transmission system. ref OF 3 1843
101138 -  ..
101139 - There is no discussion in the article of how PG&E can recover the
101140 - costs of upgrading transmission without rate increases.  Does this
101141 - mean that the original rates were insufficient to amortize or
101142 - otherwise "improve" the system?  Why would that have been done?  Why
101143 - would rates have been set too low to pay for maintenance?  Why doesn't
101144 - "upgrading" the transmission system pay for itself by supplying more
101145 - customers at less cost?
101147 -  ..
101148 - As a result of deregulation, PG&E organized into subsidiaries in 1997.
101149 - ref OF 3 4143
101151 -  ..
101152 - Gordon Smith is CEO of the biggest subsidiary.  It is a "cash cow" per
101153 - ref OF 3 4143 and ref OF 3 4499, that manages electrical transmission
101154 - which has not been deregulated.
101156 -  ..
101157 - The article says Smith is "first among equals" with respect to CEOs of
101158 - other PG&E subsidiaries, and is considered the "heir apparent" to
101159 - become CEO of the parent company. ref OF 3 4562
101161 -  ..
101162 - Smith is respected for being concerned and energetic, ref OF 3 3983,
101163 - but some observers worry that PG&E's middle-management is indecisive.
101164 - see ref OF 3 5674
101165 -
101166 -     The concern about middle-management reflects Andy Grove's worry
101167 -     that middle-managers are "wimps" in his book "Only the Paranoid
101168 -     Survive." ref SDS 7 1091
101170 -      ..
101171 -     Grove criticizes those who attain positions of leadership, but
101172 -     then are unwilling to actually lead. ref SDS 7 3286
101173 -
101175 -  ..
101176 - PG&E is investing "billions" to upgrade its systems. ref OF 3 5184
101177 -
101178 -     Can PG&E's profits be improved by better management that avoids
101179 -     communication problem cited to Bill at ref DIP 3 1789, and
101180 -     developed on 970921, ref SDS 2 1025.
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