The Hometown Connections model to utility modernization addresses:
alignment with the governing body towards a strategic direction
requirements for the utility to be a high-performing organization
By Patty Cruz
Recently, I attended a Board meeting focused on the most strategic issues the utility is facing. Board members grilled the staff about a vendor pitching solar panel installs to local residents. What does this mean for our utility? Should we be in the business of installing solar panels and offering storage options? How will this impact the utility’s bottom line? What about our rates? How will our utility continue to be sustainable in the future? Good questions!
For over 100 years, the electric utility industry has revolved around one organization providing safe, affordable, and reliable power to communities. The electricity services market is expanding far beyond helping customers be more energy efficient. New entrants to the market are offering customers opportunities to take control of their electricity use at home and at work. For example, there are vendors promoting new technologies to help customers generate electricity on their own premises and even to allow customers to buy and sell their excess electricity to their neighbors using blockchain. As customers, we like options, but what does this mean for the utility’s business model?
Let’s be clear. Contrary to claims from those eager to gobble up new service territories, community-owned utilities do not remain stuck in an ancient past. Over time, each has adapted to regulations, market conditions and customer preferences. They’ve invested in new metering systems and other technologies to improve operations and customer services. They’ve deployed innovative energy education and savings programs. Yet today, it’s the pace of change that is accelerating and may seem overwhelming. How can a community-owned utility adapt to the fast-pace environment it’s competing in today?
Yes, the key word is “competing.” Community-owned utilities are competing with other industries to attract and retain a qualified workforce. They are competing with companies that want their customers. They are competing with private electric providers promoting their success stories in the community. All of this places intense pressure on the utilities to change without jeopardizing their mission to provide high levels of service, reliability, and lower rates.
During a meeting the other day, a utility executive asked me “what do we do?” He isn’t sure the utility has the people, processes, technology, and finances to deal with all of the industry changes and continue successfully. I welcomed the question as change and adaptability for any organization starts with leadership.
What is leadership? Think about your favorite coach for your favorite sport. The best coaches are those who have a clear vision for the team, define effective strategies to achieve that vision, and create a shared purpose that inspires team members towards action. Most importantly, winning coaches are creative and adaptable. They recruit the players they need, build offenses and defenses to fit the players they have, and design game plans to thwart the strategies of their opponents.
Leadership is a “must have” for any organization to succeed. For community-owned utilities, the scope of leadership includes the utility’s governing body. Boards of directors and city councils provide guidance and make decisions that impact the utility’s operations, service, and overall future. Efforts to support each member of the utility’s governing body in understanding industry challenges and opportunities and the role they play is an important and significant endeavor for every utility. A governing board that is aligned with the utility’s desired future enables change.
So, does your utility need to change? If daily business operations continue as they are today, what will your utility look like in five years? Ten? No one has a crystal ball but we do have reliable information about trends, threats, and opportunities in the industry that clearly indicate conducting business as usual is no longer an option. We also know that the core purpose of community-owned utilities is to provide utility services to the community in a safe, reliable and affordable manner. How can we take what we know, what we are passionate about and apply it to today’s market demands? A well-defined strategic planning process is the tool that enables organizations to create their future and define the steps to achieve it.
Let’s return to our coach example. As a leader, a coach builds the team and develops the game plan. Then it’s time to assess whether the team has the right equipment, that players are in the right positions, that the support staff is ready, that the schedule is set and more. For a utility, an organizational check-up lays the foundation for strategic planning by taking a detailed snapshot of its current condition. It looks at structure, staffing levels and skill sets, processes and procedures, technology, and performance metrics as a starting point to understand the current situation and create a baseline for future success.
Hometown Connections has assisted many community-owned utilities with leadership and workforce issues, the development of effective governing boards, strategic planning, and organizational check-ups. In future articles, we will elaborate on each topic and provide insights to help strengthen these areas within your utility.
For more information
Vice President of Consulting and Training
Hometown Connections, Inc.
About the Author
A Certified Birkman Leadership Consultant, Patricia Cruz is Vice President of Consulting & Training for Hometown Connections, Inc. Previously, she was with Leidos Engineering where she provided consulting services to electric and water/wastewater utilities related to strategic planning, organizational effectiveness, cultural alignment, business communications, process improvement, and public outreach. Ms. Cruz brings a dynamic portfolio of qualifications to a variety of service areas to positively impact client companies’ organizational performance, enhance customer service, determine strategic direction, define talent management initiatives, identify key processes in need of improvement, and obtain stakeholder endorsement.
Ms. Cruz has recently presented and authored papers on topics vital to sustaining healthy utility operations, such as stakeholder engagement, strategic planning, workforce management, and business culture.