BUS 733 Week 1 Business Transformation and Vision Example

From Coal Plants to a Clean, Flexible Grid: Defining Transformation and Vision for a Rural Electric Cooperative

[Student Name]

University of Phoenix

BUS/733: Transforming the Business

Week 1 Assignment

[Instructor Name]

[Date]

Great Plains Energy Cooperative and all figures are composites written for a model paper; energy policy is described generally.

Great Plains Energy Cooperative, a composite generation and transmission cooperative based in Salina, Kansas, supplies wholesale electricity to 22 distribution cooperatives serving about 410,000 member households, farms and businesses across Kansas and Nebraska. It owns two coal plants, shares in a natural gas plant, buys wind power under contracts and operates 4,000 miles of transmission lines. It employs 1,100 people, about 400 of them at the two coal plants. Coal still provides 58 percent of its energy. Some organizations can improve their way forward; others must change what they fundamentally are, and the first task of leadership is telling which situation it faces. This paper examines whether Great Plains faces transformation and what vision should guide it.

Transformation Versus Incremental Change

Incremental change refines current activities without altering their logic. Transformation changes its deep structure: its core beliefs, strategy, distribution of power, structure and control systems. For Great Plains, upgrading coal plant efficiency is incremental; shifting the generation mix, the grid model and the relationship with members is transformational.

Punctuated Equilibrium

Gersick (1991) synthesized research across levels, from individuals to organizations, and described punctuated equilibrium: long periods of stability in which deep structures persist, interrupted by short revolutionary periods in which those structures are dismantled and rebuilt. During stable periods, organizations resist change that threatens the deep structure.

Evidence on How Transformation Happens

Romanelli and Tushman (1994) studied minicomputer manufacturers over many years and found that most fundamental transformations occurred in short, discontinuous bursts rather than through accumulated small changes, and that major performance declines and changes in chief executives were associated with transformation. The finding challenges the hope that steady, small changes will add up to transformation.

Dynamic Capabilities

Teece (2007) described dynamic capabilities as the capacity to sense opportunities and threats, seize them through investment and organization and transform the firm's assets and structures as the environment changes. Transformation depends on these capabilities, which many long-stable organizations have allowed to atrophy.

Forces for Transformation: Economics

The cost of wind, solar and battery storage has fallen sharply over the past decade, while Great Plains' coal plants, built in the early 1980s, face rising maintenance costs and environmental compliance expenses. Engineering studies estimate that keeping both coal plants running to 2040 would cost more than replacing much of their output with a portfolio of wind, solar, storage and gas, even after accounting for new transmission.

Forces for Transformation: Members

Member cooperatives want lower and more stable rates, and several large members, including a food processor and an ethanol plant, want lower-carbon power to meet their customers' expectations. Some distribution cooperatives are considering buying power elsewhere when contracts expire, which would weaken the cooperative's finances and raise costs for the members who remain.

Forces for Transformation: Load and Technology

New loads, including irrigation electrification, electric vehicle charging, data centers seeking rural sites and electrified farm equipment, are changing demand patterns. Rooftop solar and batteries at members' homes and farms are turning a one-way grid into a two-way system.

Forces for Transformation: Policy

Federal and state energy policy has shifted repeatedly, with incentives for clean energy expanded in 2022 and narrowed in 2025. Policy uncertainty affects timing and financing but does not change the underlying economics of aging coal plants or the age of the equipment.

Triggers

A recent trigger was a costly forced outage at one coal plant during a winter storm, requiring expensive market purchases. A second trigger is the retirement of the chief executive of 22 years, with a new leader arriving next year.

Is This Transformation?

Taken together, the forces require changes in the generation mix, the grid's design, the cooperative's skills, its relationship with members and its culture, which has long been organized around running large central plants. This is transformation, not incremental change.

Why Incremental Change Will Not Be Enough

Great Plains has tried incremental steps: efficiency upgrades at coal plants, a modest wind contract and a pilot demand response program. Each helped at the margin but none changed the cooperative's dependence on coal, its central-station operating model or its relationship with members. Romanelli and Tushman's evidence suggests that such steps rarely add up to transformation, because the deep structure absorbs them. The cooperative's experience fits that pattern: after a decade of small changes, coal's share fell only from 64 to 58 percent.

Leadership Succession as a Trigger and a Risk

The incoming chief executive could accelerate transformation, as research on executive succession suggests, or could be absorbed by the existing culture. The board's choice of a leader with experience in utilities that have already shifted their generation mix signals intent, but the new executive will need early wins and a strong coalition among member cooperatives to move quickly.

Deep Structure at Great Plains

The cooperative's deep structure, built over four decades, includes beliefs that reliability requires large central plants, a power structure in which plant managers hold great influence, budgets built around plant maintenance and a culture of engineering conservatism. Each element will need to change, which explains why transformation feels threatening to people who have built careers within it.

A Draft Vision

The draft vision reads: "By 2035, Great Plains will deliver reliable, affordable power to rural Kansas and Nebraska from a balanced mix of wind, solar, storage and natural gas, working with members to build a flexible grid that serves farms, towns and new industries."

Testing the Vision: Clarity

The vision names a date, a generation mix, a grid model and the members it serves. It is clear enough to rule out options, such as building new coal capacity, and to guide investments.

Testing the Vision: Credibility

Credibility depends on whether employees and members believe it is achievable and fair. Coal plant employees may see it as a threat; members may doubt reliability without coal. The vision must be paired with commitments on reliability, rates and workforce transition.

Testing the Vision: What Will Stop

The vision implies retiring both coal plants by 2033 and 2035, ending the cooperative's identity as a coal-based generator. Naming what will stop is as important as naming what will start.

Stakeholder Perspectives

Distribution cooperative boards care most about rates and reliability; plant communities care about jobs and tax base; employees care about their futures; regulators and lenders care about financial health. The vision must speak to each.

Questions for the Course

The transformation raises questions the course will address: how to handle complexity and the global energy environment, which capabilities to build or acquire, how to lead change, how to integrate sustainability and how to measure progress.

Conclusion

Great Plains faces forces in economics, members, technology and policy that require a change in its deep structure, not incremental improvement. Research on punctuated equilibrium and dynamic capabilities explains why transformation is discontinuous and capability-dependent. A specific vision for 2035, tested for clarity, credibility and what will stop, provides direction for the work ahead.

References

Gersick, C. J. G. (1991). Revolutionary change theories: A multilevel exploration of the punctuated equilibrium paradigm. Academy of Management Review, 16(1), 10-36. https://doi.org/10.2307/258605

Romanelli, E., & Tushman, M. L. (1994). Organizational transformation as punctuated equilibrium: An empirical test. Academy of Management Journal, 37(5), 1141-1166. https://doi.org/10.2307/256669

Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. https://doi.org/10.1002/smj.640