sábado, septiembre 26, 2015

Conclusive evidence: transformative deregulation is the key to electric service innovation

Here is reported conclusive evidence to answer the question of the blog post Is the VAE-AF the Biggest And Boldest Idea For How To Stop Rising Inequality? [that post is no longer available, but its question stands). It comes, in turns, from conclusive evidence to "the IEEE Spectrum Smart Grid Game update after 4 years" of the post  Was the Smart Grid 2025 a transition scenario? Do we need a transformation scenario? In fact, as you will see below there is now no doubt that we need a tranformation scenario on the retail and wholesale markets.

In his classic 1993 article "Managing the Metaphors of Change," Robert J. Marshak wrote:
Metaphors of Change 
The “Fix and Maintain” imagery described above, while frequently encountered, is hardly the only metaphor of organizational change. We can consider three additional types of organizational change processes: Developmental, Transitional, and Transformational. Each has its own characteristics and associated change technologies:

Developmental change builds on the past and leads to better performance over time, e.g., better teamwork.  
Transitional change involves a move from one state or condition to another, e.g., from manual to automated operations.  
Transformational change implies the transfiguration from one state of being to a fundamentally different state of being, e.g., from a regulated monopoly to a marketdriven competitive business.
It is very clear and direct from Marshak's transformational change example that it comes"... from a regulated monopoly to a marketdriven competitive business" that there is no longer any need to doubt. But, here is an update to Marshak's Metaphors: while the first 3 are in fact managing metaphors, the fourth is actually a leading metaphor.

It was because a transformation scenario was not available or developed before deregulation, that we now have an excessive amount of regulations that block any opportunity to deregulate and innovate as statu quo interest came in control of the electric power sector. In fact, the incentives provided by the transformation are so large, that they might not need to be financial at all, as the customer becomes the industry center stage.

This is where the electricty pact of the Dominican Republic can apply the great opportunity to set up the country as the world leader in electricty innovation. In order to sucessfully innovate, we the need to introduce competive deregulation that emerges from transformation without privatization, as privatization leads to soaring inequality. Earlier convincing evidende on the need for leadership can be seen in the 2008 post Leadership Answers What to do First.