Information
about Wired For ProfitAbility®
- Understand the financial
basis of success in the T&D business
- Understand how accounts
are used to measure success
- Know what has and
has not been important under regulation
- Know what will drive
success in the future
- See how they personally
contribute to that success
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Course
Outline
| Agenda
Item |
Description |
| Moving
Balance Sheet |
- A
demonstration of basic financial concepts
|
|
Year
One (regulated)
|
- The
business cycle, Income Statement & Balance Sheet
- Why
regulation was introduced, and the pros and cons of regulated
monopolies
|
| Year
Two (regulated) |
- Reinforcing
the business cycle, retained earnings, accounts
- Ratio
Analysis: ROR, CR, ROE, EPS
|
| Year
Three (regulated) |
- Running
the business under your own steam
- Regulation
issues: the Rate Case, cost-plus pricing
- Reregulation:
what will happen to the T&D business
- Keys
to success: growing the business, service levels, cost reduction,
marketing
- Reregulation
Rules introduced
|
| Year
Four (reregulation) |
- Improvement
Programs
- New
Ventures
- Share
Price exercise 1
- Strategic
Planning
|
| Year
Five (reregulation) |
- Differentiation
and Cost Leadership strategies
- Budgeting
and Cash Flow
- What
your company has done, and still needs to do, to compete
- Effect
of New Ventures Investments
|
| Year
six (reregulation) |
- Cost
reductions pay off
- Effect
of cost reductions on profit and competitive position
- Stock
Price exercise 2
- Break-up
and Acquisition strategies for utilities
- Break-Even
analysis of the business
|
| Action
Planning |
- My
job and how I affect the business
- Operating
figures from business unit
- Summary
of learning points
- Action
Planning: how I and my team can contribute to success
|
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Wired for Profitability®
is an intensive 2-day program. Group sizes can range from 12 to
24 participants, preferably from the same business unit, but often
of mixed level and job type.
To picture what experiencing
the simulation is like, imagine yourself in a room with 12 to 24
other participants. You are seated with 2-4 team mates at a table
with a game board representing the T&D
business that you and your team members are going to run. There
are 5 other teams in the same room each seated in front of their
own game board. As the industry becomes reregulated, you will have
the opportunity to compete with other companies in the New Ventures
market. You can also implement cost reduction programs and pocket
the savings. However in the new environment, you will not be allowed
to automatically pass on your increase in costs or have consumers
automatically pay for your investments.
Each year the participants
fill out an Income Statement and Balance Sheet for the business,
reinforcing their understanding of the basic financial concepts,
and seeing how profit, leverage and shareholder's equity are affected
by the performance of the business.
There are are short
lectures and discussions about the challenges of deregulation, so
that the events in the simulation can be related to the participants'
own work. Participants calculate several financial ratios, and see
how these change with the ups and downs of business. They also run
a stock market on the industry, valuing each other's shares. This
enables them to link their decisions, the financial results, and
the stock prices.
Finally, a series of
exercises and discussions helps each participant see how they contribute
to the financial success of their real company, and how they can
help it succeed in the future. A local manager presents the figures
for their own operating units, in the roughly the same simple format
used throughout the simulation, and leads to a discussion of their
role in meeting the present challenges.
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- Shows us how the
market works now and in reregulation
- Visual model helps
our understanding
- I think the model
really drives home the point on reregulation
- One of the best simulations
and biggest learning by transferring what you see on the board
to the income statement and balance sheet and building an understanding
of what all the numbers mean.
- See the big picture
and its effect on the bottom line.
- Visual experience
of what you see on the board and what you put on your financial
statement
- Key to this is the
process of learning, I think is an important 3-way method of understanding
financial (1) hear, (2) see, (3) write it.
- Key understanding
of the change from regulation to reregulation
- All employees need
to understand that a 2% cost reduction makes a big difference
in profits
- Hands-on eye opener
- We are all in this
together - we need to pull together
- Really simulates
what we are going to be up against in a very short time
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