Initial Successes in Minnesota Power s Strategic Realignment

Initial Successes in Minnesota Power's Strategic Realignment

MP's results in relationship repair were impressive. In mid-1996, the experts were saying that power deregulation in Minnesota was no more than two to three years off. Utility customers around the country were challenging contracts; some were breaking them. But at MP months of work in relationship management, alignment, and collaborative negotiation began to pay off. In August, MP and its largest customer agreed to a new precedent-setting, 11-year service agreement, which then had to be accepted by the Minnesota Public Utilities Commission.

In November of 1996, when it became clear that MP's 18 months of work had paid off, Eric Norberg held a celebratory dinner for his 30-member relationship-repair team. At one point Norberg had the entire group stand in a circle, recognized people by name, and read their contributions to the repair process. Norberg then gave each employee a plaque that had a newspaper headline mentioning him or her by name, followed by a story that celebrated each person's role in turning the relationship around. It was a celebration and appreciation of all the efforts of the team members. We consider this public recognition a best practice in both relationship repair and strategic-realignment work.

The success became official on December 23, 1996, when the Minnesota Public Utilities Commission approved the MP-customer contract. MP's competitors—those firms seeking to supply power to MP's largest accounts—were floored, both by the agreement and by its length. At that point, with deregulation looming, virtually no large-power customer was signing a long-term contract.

In mid-1997, Norberg wanted to ensure that MP would learn from its past. He commissioned a learning history about the repair of its largest customer relationship. The learning history captured all the key steps in the MP-account relationship as well as critical decisions, victories, and mistakes. The learning history was used to train MP executives and staff and to identify other potential high-risk account relationships.

Bob Edwards held a critical meeting in the fall of 1997 at Bluefin, Minnesota. Almost everyone to whom we spoke singled Bluefin out as a milestone in his or her MP career. Thirty MP leaders, led by two outside facilitators, met to map out MP's new strategic direction. Looking back at that meeting, Edwards says, "We saw that for our company to be successful, we had to work with customers, whether we were regulated or not. Based on these insights, we flipped the organizational chart, putting customers at the top, and decided what we were going to be doing in the next 10 years. I had attended many brainstorming meetings that never led to anything so I was not looking forward to this meeting. But Bluefin was structured in such a way that the communication was of a very different sort. The discussions were very candid. Together key MP areas and managers identified our current strengths and weaknesses.... We then decided what we were going to do... and, just as critically, what we were not going to do. We closed offices, consolidated our efforts, stopped selling nonpower products, and stopped accepting projects below a certain dollar level. We identified the MP activities that were basically distractions from where we wanted to go—even if they seemed to offer a big payoff."

"What I remember especially about that meeting was that we had scheduled it for two days, a Wednesday and a Thursday. After two days we saw we would need more time and every single participant agreed to meet again—not grudgingly—because they could see that our decisions were going to reshape the company. I'll always remember that; it was so different from a traditional utility's 8 to 5 commitment." Dave McMillan, then an MP corporate lawyer with a commitment to customer relationships, recalls that Bluefin "fundamentally changed the way we did business."