Newsletter No.

16, Monday, 18th May 2009

"We have learned that power is a positive force if it is used for positive purposes.” – Elizabeth Dole

In this Issue:
• “ENERGY BUSINESS TALKS”: The Power to Fail or The Power to Succeed
• Coaching: Strong decision needs you hold firm
• Legal: Commercial Code Project
• Global Financial Crisis: We got to the Point (last part)

“ENERGY BUSINESS TALKS”: The Power to Fail or The Power to Succeed

It took 6 weeks for me to come back with our newsletter but I think this break was worth it.
Manny stories are circulating about reasons to fail and reasons to succeed in business. I have seen at work some of them in both ways. Always I was asking
myself if I am right when I am getting back and forth, veering left or right when data suggested me that I am not on the right path. Fortunately, the wheel was
invented already and the power to teach is present if you need it. Could be just a question of time to find the right moment to read some learned lessons by
others and avoid wasting your resources in the wrong way.
What could be the right recipe for succeeding in business? David L. Dotlich and Peter C. Cairo in their book “Why CEOs fail” made a promise to write a new
book “Why CEOs succeed”. It is just a matter of time and to wait the golden recipe for succeeding in business but what if somebody doesn’t have time to wait
and is eager to succeed now and not later after book is ready. If so, he must know the mistakes first and then put the logic to work. According to the book, he
must learn where the right limit should be set between arrogance and self-confidence and between many other pair characteristics. But what if the logic
doesn’t work in the direction we like. Do we have the power to fail and to get back on the right track? The 80s and 90s generations are coming to show us
soon their answers. If you think that 80s were still a little bit slower, then wait a bit to see the 90s. The most powerful force to change the wrong culture of an
organization is not coming from inside but rather from outside, it is just a learned lesson the experts knew it. And where the young generations are staying
now?
According to the book, it is not easy for CEOs to find the right balance between self-confidence and arrogance, charisma and melodrama or vibrating energy
and volatility? Ask yourself what is the right choice for some trends in our electricity industry:
- A CEO refuses to take responsibility when his obsolete strategies and over-estimated budgets elaborated for a growing electricity market didn’t work
during the first wave of this financial crisis.
- A CEO is unwilling to give up the huge investments of billions EUR in thermal or wind power plants that have been announced before crisis and tries
 to get the perception that everything is right and it is just a matter of time until the financing is agreed.
- A CEO is trying to get compassion by complaining that crisis was coming suddenly and nobody has predicted that things may go so wrong.
- A CEO or a leader is asking charitable measures and actions from third parties and even from investors in order to please and to protect his
employees.
- A CEO or a leader creates enthusiasm one day saying that crisis is not affecting the energy business and next days he announces suddenly a
restructuring crisis plan which includes hundreds or even more of unemployed.
- A CEO or a leader creates enthusiasm one day saying that finally the long expected solution is coming and next days he announced that solution is
still investigated and needs more time to work on it even nobody is been seen working on it.
We want the energy businesses to grow and to bring healthy flows to the nation. Accordingly, our mission and our vision fit together on the same path. Being
not involved and letting out the opportunity to do the right things on the good trend might be absolutely the same like we are involved in the bad way.
Nowadays, what we know is when and how other businesses have failed and we learnt that the power to teach is doing miracles only when mistakes are
avoided. The famous bad recipe that we have learnt from the business history is the lethal combination of high lucrative brain, high competence but mediocre
emotional abilities. Is the arrogance inside? If you ever see this combination, I bet you may like to stay out and wait. It is not only my long term opinion but
also what an executive search company knows very well.
Actually, once appointed, a leader or a CEO might be aware about the potential dilemma: Opportunity vs. Treat? Or what exactly he has gotten is the Power
to potentially succeed or the Power to potentially fail? Working with Power during the financial crisis might become a risky job. If you have never touched with
your hands electrical equipment, you may never know how hot might become when the electrical insulation failed. The Risk Management asks a CEO dealing
with his personal risks during the crisis.

Alexandru Ionescu, Consultant

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Coaching
Performance Management should matter

Generalizing an organization, the basic function of a business is to collect and deploy Financial resources (and their synonyms, “assets” and “liabilities”) to
enable an organization’s employee Workforce to serve Customers.
We can count 3 “M’s”: Financial Resource Management (FRM), Customer Relationship Management (CRM), and Employee Performance Management
(EPM), in all of their variations, are the real-world application of these basic priorities.
Are any Generally Accepted Performance Management Principles?
Given that labor costs represent one of the most significant expense items for most organizations, it should come as no surprise to anyone that “personnel”,
“talent”, or “human resource” management is a major strategic and tactical priority.
Too many organizations, however, both in and outside of the commercial arena, take far too much for granted when it comes to the management of
workforce performance (I don’t mean glorified historical job assessment tracking, but the actual on-the-ground, hour-to-hour performance of real work).
The facts are that when it comes to the workforce, most organizations implement broad-based yet highly fragmented initiatives, invest the minimum required
by regulation and law, or both (unfortunately, the same can also be said for most CRM initiatives).
Yet, since there are no “Generally Accepted Performance Management Principles”, each organization is left to its own devices to imagine, construct,
implement, sustain, and evolve its own ‘unique’ approach. And, do so with the participation of stakeholders, coaches, consultants, technologists and
governments who have not agreed on any standards.
The Financial Resource Management equivalent of this would be for each business in an economy to use its own accounting methods, systems, rules,
processes and procedures. This would lead to total chaos. And, that’s the world within which most employees perceive they live and work. The fundamental
consequence is the under-performance of most human organization.
Employee Performance Management (EPM) is an approach that applies the same process, procedure and technology rigor, consistency, and
universality to workforce performance as organizations now apply to Financial Resource Management; at least within an organization. EPM’s objective is
to create a coherent and comprehensive environment within which a workforce can thrive and optimize, and an organization can fulfill its potential and
achieve its objectives.
Some may characterize this approach as Human Performance Improvement, Talent Management, or simple Human Resource Management. However, each
of those approaches neglect the broader day-to-day street-level realities of linking strategies, tactics, customers, managers, the workforce, technologies, and
business processes that are addressed by EPM.
In the strategy development and implementation a coach can help the client to discover and evolved a range of guidelines that define the keys to success in
rigorous and integrated EPM. These “Rules” evolve in scope from “big-picture” strategy-focused, to those that are more tactical and action-focused.
Based on the foundation of these guidelines, the coach may post ongoing observations, information, and opinions about business, organization, and
government and their ongoing performance management initiatives.

Rodica Obancea
Associate Certified Coach (ICF)
Executive &Team Coaching

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Commercial Code Project of Wholesale Electricity Market

In light of the Commercial Code Project of Wholesale Electricity Market (in the following the Project), we propose that in the following we analyze the aspects
regarding the changes that are intended regarding electrical energy purchase-sale Contracts.
Regarding electrical energy purchase-sale Contracts, the Commercial Code of wholesale electricity market approved by Order no. 25/2004 emitted by ANRE
(in the following the 2004 Commercial Code), does not state the fact that these contracts may be the object of electrical energy import/export operations, and
also it does not state that these can be concluded by upholding the terms included in the license, as stated by art. 4.1.1.1 of the Project.
As such, art. 4.1.1.1 of the Project explicitly states the freedom of all license owners to conclude bilateral electrical energy purchase-sale contracts, including
import/export, by upholding the standing legislation, including the new Commercial Code, as well as the terms included in the license.
An essential modification of the code’s provisions refers to the negotiated contract’s confidentiality, regarding the contracting parties, the quantities of
electrical energy and the prices stipulated in the contract.
Through the Project, according to art. 4.1.1.3, only the contract’s parties confidentiality will be assured, the competent authority remaining to publish the
information regarding the prices on the competitive market, as well as the prices and quantities stipulated in the contracts.
In this way, in our opinion, it is intended to be assured a better and more efficient transparency regarding the quantities and prices at which electrical energy
is traded, without affecting the commercial interests of the contracting parties and those of the other players on the electrical energy market.
The wholesale trade electrical energy market knows two main types of contracts, regulated contracts and negotiated contracts.
REGULATED CONTRACTS
According to art. 4.1.1.1 of the 2004 Commercial Code, regulated contracts must abide by the minimal content stipulated by the competent authorities.
The Project eliminates from the regulated contract’s definition the term “minimal content”, stipulating that these contracts will respect the content established
by the competent authority by means of approved frame contracts, this being, in our opinion, a much clearer formulation that does not leave room for the
different interpretations and discussions regarding the aspects of the “minimal content” imposed for regulated contracts.
As such, the proposal is to annul the provisions of art. 4.1.2.10 of the 2004 Commercial Code by which the frame contracts in base of which regulated
contracts were to be concluded are enumerated as follows:
a) The purchase-sale of electrical energy portfolio frame contract;
b) Long term electrical energy purchase-sale frame contract concluded between S.C. Nuclearelectrica S.A. and the captive consumer’s suppliers;
c) Frame contract of electrical energy acquisition from the self producers/independent producers;

Ioana Precup, lawyer

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Global financial crisis: We got to the Point (last part)

Going back and forth with some theories during the crisis has proved interested and even benefic. Actually, there are some clear facts of what the crisis
affected and where is most probably heading. There are many things to come and significant changes possible to occur. I have chosen to become optimistic
and neutral, leaving the realistic prediction inside, and not in a public paper. What we need is to be optimistic even the second wave of crisis has not yet
come and crisis might bottom in 2010 and waiting a sustainable recovery in 2011. As a consultant, I may blame myself if I spread pessimistic forecasts and
theories to the large public. The analysts in media now explain why and how, in details, even none of them have predicted last year that worst is to come. As
for me, having said in public only a part of the puzzle and not the whole one, might create confusion and make somebody to take wrong decision if not
reaching the same understanding with what was intended to present.
Few recommendations to follow during the crisis in order to survive:

- Observe what the global leading sources of information are saying and keep silence on the ad-hoc comments presented on the second, third or
even fourth level of interpretation and the noised news. Leaders exist because they are needed and people learned to trust and follow them.
Obsolete gurus were probably right once in the past but this is not a recipe for a second success in different times. Moral hazard applies mostly to
them.

- Observe the logical correlations among facts, events and information. Nothing happened by fortune, there is always a leading reason and a lagging
effect.

- Reduce the volume of information you have to know to what is really important and matters.

- Invest in your knowledge and increase the ability to manage your emotions. Crisis may take longer than everybody expects, and learning courses
might be shorter. Once you may manage better your emotions, believe nothing you heard or you read unless fit well with your inner reason.

- Observe the differences among national cultures when you interpret information from different countries. During the crisis, cultural discrepancies are
to be exacerbated.
Good luck!

Alexandru Ionescu, consultant

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Issuer of this newsletter: SC Power Advisors SRL, Alexandru Ionescu – Manager

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