Creating a Process-oriented enterprise at Pinnacle West Case Solution

2. What are the requirements for creating a process-oriented culture in an organization? To what extent does Pinnacle West address these requirements? Where is it lacking?

In order to have a process- oriented culture in an organization, it is necessary for departments to have proper communication. A communication system, that ensures every stakeholder to be on the same page aiming for the same goal. This transformation process required business process change skill, proper methods for change to occur, supported by proper tools.

In trying to address requirements, Pinnacle identified key process and distributed them in four different processes. These processes were backed up by different initiatives like the information service and professional development etc. The foundation of transformation was an innovation; these were backed up with strategies to achieve targets like service performance. These steps were somewhat successful as the establishment of CPE represents its success in information service.

What Pinnacle was lacking, were the fears of Brown. These fears can be noted in term of lack of departmental communication and were not proper defining of the roles, specially the IT and business customers. Both of them look out for each other’s input. Addition to that, the requirements from customers are also increasing which are pushing for lower cost, but Pinnacle has an old infrastructure which is not capable of catering to increasing demand and distribution.

3. Should process transformation always occur in response to major events and/or failures? If not, why do organizations seldom embark on major transformations when there is no "burning platform"?

Risk management is always emphasised to save the company from risks of failures. This states that a company should take some preventive measures before facing of a bad event. This prevention can be taken on the basis of anticipation of events as per the market conditions. If a company anticipates and try to mediate risk it can save itself from heavy risks and losses. Usually, when a company starts to transform after a catastrophe, it’s on the basis of necessity and it has no other option left.  Therefore, anticipators are always admired and respected as compare to companies responding to a threat. These companies are usually successful and categorized as more responsible, more innovative and creative then the other organizations.

The reason that company seldom embarks on the major transformation until happening of a burning platform is that they are happy with what works and, so they don’t look for the best available options. This attitude can spur due to numerous reasons. One of the primary reasons for this attitude is cutting on cost and investment in a major transformation is attributed with an increase of cost. These investments are taken as cost, so these organizations are usually short term oriented. In addition to that people don’t want to be pushed out of their comfort zone. Means, when some rules and practices are established, people get used to them, and if these are tried to change, people are pushed to learn more. This increase in burden is not appreciated, and as a result, they restrain change.

4. How well do you think the grassroots strategy is working at Pinnacle West? Do you think it is sustainable?

Current strategies are working for the current period of time, but these strategies lack proper inter departmental and subsidiary communication. Addition to that, they are not facing any competition due to strict regulations and, so they don’t need to be superior in technology or create differentiation of services. Pinnacle is enjoying monopoly, and so, these strategies as per competition are fine. If they are doing small scale improvements to meet demand, this strategy is also fine to go with during current period.

However, the grassroots strategy is certainly not working for Pinnacle west for long term. Brown has observed that and because of that he has planned to go through a transformation. Pinnacle has been facing many problems and challenges for achievement. There is a requirement for an increased production as per the anticipation for 2025, but Pinnacle has an old infrastructure. It is not really facing a threat of new entrant, but certainly it cannot cater to the increase in demand with this infrastructure and technology. Because of that, Brown put a stride in moving it from a function to a process oriented organization. This strategy has worked for Pinnacle in the past and it is still working, but Brown’s visionary thinking put Pinnacle in moving forward. This requires a cut down in cost and expanding its production and distribution capabilities.