How video helped change a corporate culture.

During the past decade, companies in many industries -- telecommunications, utilities, transportation and banking -- have experienced the pain of deregulation.

One U.S. company that has been actively facing the challenges of deregulation is Public Service Electric & Gas (PSE&G), New Jersey's largest electric and natural gas utility. The company faces competition from aggressive, independent power producers who entered the business because of attractive government tax incentives and new regulations imposed by the U.S. Federal Energy Regulatory Commission. Deregulation also encouraged PSE&G's industrial customers to install their own generating capacity, further threatening PSE&G's core business.

To meet the competition, the company had to change the way it does business.

In 1989, the communication department of the Electric Business Unit (EBU), PSE&G's largest division, set out to develop a comprehensive, long-term communication strategy. The essence of the strategy integrates video with discussion groups to explain the corporate change process to all employees. The EBU, an organization of some 7,600 employees, is in the business of generating, transmitting and distributing electric power.

Having developed ambitious communication plans in the past, we wanted to establish continuity in the EBU's communication with our work force. Our hands-on experience taught us what leading communication gurus had theorized: To achieve organizational objectives, key messages must be credible, consistent and continuous.

Selling the strategy to upper management

We realized the need to secure unqualified support from top management. Their support not only included the production and effective distribution of the video programs, but also the integration of these videos in the overall change process within the organization. Employees had to perceive the videos as credible status reports on changes as they evolved throughout the company, not just manufactured news substituting for real change.

Fortunately, we received a major commitment from Larry Codey, former senior vice president of the EBU, and now the president of PSE&G. He believed that for change to take place throughout the organization, employees had to know the reasons for the change. They also had to understand how they would play a role in the change process by doing their jobs differently.

He also believed it was important for management to understand this, too. Its commitment was critical to explain the business issues and answer questions about the threats and opportunities in this new business environment. Without management's commitment, we would be wasting time and money.

Videos designed to convey business strategy

The second objective was to ensure that the video programming would not be considered a "one-shot deal" -- a tactic divorced from the long-term plan. The positioning of video would be critical to the program's success, since the knowledge of long-term objectives would affect the way subsequent video programs were designed.

Knowing there would be a series of programs distributed on a measured basis, we tried to sharpen each program to improve the focus and effectiveness of the overall program.

The dual strategy of integration and continuity was initially presented to EBU's top management in a way that reflects the realities of corporate change itself. The EBU's communication department secured management commitment as part of an evolving learning process that continues to this day. The ideas of continuity and integration were emphasized as sound business principles, and were shaped by many of the executives involved in the presentation.

During the extensive pre-production period for the first video, we asked for management input on the most effective means to communicate business issues. Detailed creative treatments were circulated for comment and criticisms. When we received approval for the first program, management also supported the idea of an ongoing, integrated employee communication program.

Deregulation & competition: meeting the challenge

Working with New York Television, Lebanon, N.J., we designed the first program in the video series to achieve two major goals: alert employees to the urgency of the situation and explain how the company got there. Since so many employees were unaware that something as bureaucratic-sounding as "deregulation" could affect their lives, PSE&G designed the program to make the realities of the new competitive environment tangible.

The program captured the viewer's attention with a hard-hitting news approach. Employees at the power plant explained how the company had lost a major customer through the changes brought about by deregulation. One employee summed up the real world consequences: "It could mean a loss of jobs or a change of jobs."

Once we communicated the gravity of losing a major customer, the program explained the historical context, and outlined the company's strategic response to competition.

Distribution and feedback: the first steps to the next program

We distributed the video throughout the organization with the backing of senior management. The vice presidents in the EBU showed the video in meetings. They encouraged dialogue to heighten the impact of the program, personalizing it to each division's business. Evaluation forms and observation by communication managers gave crucial feedback. The program achieved a 96-percent approval rating. Anecdotal evidence showed both a much higher level of worker understanding of deregulation, and of the competitive forces threatening the company.

Employee surveys proved that the first program was a success. Feedback mechanisms helped us to further refine the approach for a follow-up program.

Take two: the power to change

The next step in our communication plan was to describe how the company must change to combat the competitive threat. Planners within the organization had developed a 10-point strategic plan. However, how could the communication department get all employees to comprehend and internalize such a complex document?

And there was a greater challenge. How could we show that change was not a mandate from the top, but an evolving process throughout the organization?

The creative design of the program responded to these challenges by reducing the plan to its essence. Specifically, the plan identified "strategic metaphors" that would explain the 10-point strategy in everyday terms, as well as report on success stories taking place throughout the company.

Once again, the program's design evolved through meetings with the same executives who helped in the development of the first video. They endorsed the creative approach and, at the same time, modified and improved it. The first program convinced management of its effectiveness and they clearly saw the value of a follow-up program.

The final form of the video used a professional actor in the role of a typical employee refinishing his basement. The program follows him through the process of planning the job, buying quality materials at the lumber yard, working with his son as a "teammate" and celebrating the handsome finished product. As he works, he uses metaphors to explain the company's 10-point strategic plan. He also sets up examples of "success stories" throughout the company.

Mini-stories enhance credibility and comprehension 

In a total of 13 mini-stories -- ranging in length from 90 seconds to three minutes -- workers from every division explain a particular initiative that corresponds to one of the company's strategic goals.

One mini-story focuses on a repair project done by PSE&G workers rather than an outside contractor at the company's Bergen, N.J., generating station. In a re-creation of events, the video shows station mechanics, offering their suggestions for completing the project in a cost effective manner, and examining the feasibility of outside proposals.

The manager closes the segment by reporting that the workers volunteered for overtime. Station workers completed the project in three months for a cost of U.S. $50,000 in labor as compared to several million dollars if done by an outside contractor.

The mini-stories show the change that is already taking place in each division. They also serve as role models by showing that pockets within the company are clearly making great strides in the change process.

While the actor's warm appeal helps to de-mystify the complexities of the strategic plan, the mini-stories add an invaluable measure of credibility. Once the viewer has gained a basic understanding of the strategic plan in a form that makes sense "in the real world," the stories become hallmarks of change. The actor becomes an unobtrusive guide, leading viewers from story to story.

On the road to take three

"The Power to Change" has been in circulation at PSE&G for about a year. The program is being shown within and outside the EBU. Surveys indicate that the video is accomplishing its objectives. For example, 90 percent of the viewers said that the program gave them a better understanding of the company's strategy, 79 percent said they have a clearer idea of what employees need to do for the company to succeed. Ninety-seven percent said they have a clearer idea of what the company is doing to beat the competition.

While the company finished evaluating the second video, the communication department began designing the third in the series.

We plan to look outside PSE&G to examine how customers perceive the company, tracing how those perceptions are formed by the actions of PSE&G employees. The objective is to dramatically illustrate the "chain of quality" that reaches through every part of the company before ultimately connecting with the end product: satisfied customers and a successful business.

Senior managers in other divisions learned of our multi-part strategy. As a consequence, we are currently exploring ways of integrating the video communication plan with the rest of the company.

Joseph P. Krawczyk is electric communication manager, Electric Business Unit, Public Service Electric and Gas Co., N.J.