Deregulation and Culture Change
In the mid 90s Houston Lighting and Power began using a Income/Outcome business simulation to change the mindset of managers, supervisors, and corporate staff. The energy industry was facing deregulation, and these key personnel needed to be jolted out of their historically comfortable environment, in which everything was stable, including prices, profits, and territories. A regulated environment allows you to set out your costs (including finance charges), tack on some profit, and thereby determine your prices which are then approved by the responsible agency.
The new culture would be one of cutthroat competition, where price has far more impact than brand loyalty, name recognition, or customer service. Therefore, price is determined by the market – not the corporation. Profit is achieved by managing sales and costs. This change in corporate culture was seen as essential to the company’s long-term survival and success. Houston Lighting & Power grew from 8,500 to 12,000 employees, and it continues to evolve.