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Episode #18: ‘Utility Leadership During Unprecedented Crisis’ with Patti Poppe, CEO of Consumers Energy - [an Energy Central Power Perspectives™ Podcast]

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The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. Each two weeks we’ll connect with an Energy Central Power Industry Network...

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  • Aug 11, 2020 12:00 am GMT
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As utilities looked to 2020, the changing landscape of power generation, energy policy, and consumer needs already promised to make the year one of unprecedented change. But as the impacts of the COVID-19 pandemic have spread and put utility companies and their workers squarely on the frontline, it’s safe to say that the pace of adaptation and innovation has gone beyond anything imagined by those sitting in the C-suite. But unexpected developments are not an excuse to fall behind for utilities that serve such a foundational role in modern society, and so leaders have found themselves called upon by employees, customers, and government representatives alike to step up and navigate these unchartered waters. Patti Poppe, the CEO of Consumers Energy, found herself in that role of leading her company through the unknown, and on today’s episode of the Power Perspectives Podcast she shares some of her lessons learned.

Through shifting her workforce to be as remote as possible to adapting new programs that could ensure quarantined customers still found ways to integrate energy efficiency to many late nights and early mornings planning out next steps and communicating the latest developments to her employees, all while keeping an optimistic attitude and positive outlook, Patti has demonstrated the type of leadership that should be recognized and replicated, both among peers in other utility companies and in industry more widely. You won’t want to miss this captivating conversation where Patti leads Jason Price and Matt Chester through a mile in her shoes in what it takes to navigate unprecedented crisis from the CEO’s (virtual) office.

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Thanks to the sponsors of this episode of the Energy Central Power Perspectives Podcast: West Monroe, Esri, Guidehouse, CPower, and Hancock Software

Key Links:

Patti Poppe’s Energy Central Profile: https://energycentral.com/member/profile/257141

Consumers Energy’s Support for Small Business During COVID: https://www.consumersenergy.com/-/media/CE/Documents/news-and-information/small-biz-covid.pdf

Big Picture Clean Energy Plan for Michigan: http://www.MICleanEnergyPlan.com

Consumers Energy Providing 100,000 Google Nest Thermostats to Michigan Households During Pandemic: https://www.consumersenergy.com/news-releases/news-release-details/2020/05/19/consumers-energy-providing-100k-google-nest-thermostats-to-michigan-households-during-pandemic


 

TRANSCRIPT

Jason Price:

Welcome to Energy Central's Power Perspectives Podcast where we discuss the future of the energy and utilities industry and the people making it possible. Our next guest is no exception. Today we are speaking with Patti Poppe, President and CEO of Consumers Energy. And she's going to talk us through what it's like managing through a public crisis from the C-Suite. But first let me introduce my colleague and Energy Central's Community Manager, Matt Chester, based in Orlando, Florida. Matt, how are you doing today?

Matt Chester:

Hi, Jason. I'm doing great today. Thanks for asking. I'm wondering if you're as excited as I am about our episode today and how important and timely the conversation's going to be, not to mention how terrific to the guest I know Patti will be. I really can't wait to get into it.

Jason Price:

Absolutely. Me too. I'm Jason Price of West Monroe, host of the Power Perspectives Podcast on Energy Central, and located in New York City. Before we bring today's esteem guest into the booth, we'd like to thank Energy Central's partners who make this podcast possible. From West Monroe. West Monroe works with the nation's largest investor owned utilities in their telecommunication grid modernization and digital and workforce transformations. From defending a rate case to preparing a business case, West Monroe utilizes a multidisciplinary team that blends utility operations and technology expertise covering topics, including aging infrastructure, electric vehicles, AMI, MDM, AVMS deployment, and industry disruptors like DER and cybersecurity. To Esri. Esri is an international supplier of geographic information, GIS software, web GIS, and geo database management applications. To Guidehouse formerly Navigant Research, a premier market research and advisory firm covering the global energy transformation.

Jason Price:

To SeaPower. At SeaPower, we help our customers make the decisions today that guide them across the bridge to energy's future. Where will your energy take you? For more information, visit the SeaPower way dot com forward slash future. And to Hancock Software. Streamline commercial and residential energy efficiency retrofits with Hancock Software. Our customers are delivering more than double the number of retrofit projects with the same energy engineering staff. And now back to today's episode.

Jason Price:

For those who may not be familiar with Consumers Energy, you really should be. The company's on the Fortune 500 list and boasts our workforce at 8,000 employees and annual revenues exceeding $7 billion. Based in Jackson, Michigan, Consumers Energy is a public utility focused principally on providing electricity and natural gas to more than 6 million of the 10 million residents of the Wolverine State. Currently 34 public companies in the Fortune 500 lists are run by female CEOs. Two of these companies are utilities, Duke Energy run by Lynn Good and Consumers Energy, run by our guest today, Patti Poppe.

Jason Price:

To level set for our audience, Patti is a second generation Consumers Energy employee. Her father was a nuclear engineer at the company for over 20 years. In school, Patti studied industrial engineering at Purdue and earned a master's degree in management from Stanford University. Prior to joining Consumers in 2011, Patti worked for DTE and General Motors among others before taking the helm as President and CEO of Consumers Energy in 2016. As a fun fact, Patti is also an inductee into the Automotive Hall of Fame. How cool is that? Every generation of utility leaders faces uncertainties. Patti, I think it would be fair to say that this company is far different than when your father worked here. Keeping energy safe, reliable, and affordable, continue to be central goals, but you must also do this under a completely different construct of climate change, renewable and distributed energy generation, grid modernization, workforce and utility transformation, and of course a global pandemic, and I'm sure this is only half the list. Patti Poppe, we are honored to have you today on Energy Central's Power Perspectives.

Patti Poppe:

Thank you. Great to be with you. Thanks for having me. It really is a pleasure to be on the podcast. You know, I'm an energy geek. So I love the opportunity to talk to others who share my passion.

Jason Price:

Before we get into today's theme of managing during crisis, I heard you speak at a conference about the triple bottom line. This speech underscores the mission of Consumers Energy and serves as the foundation for why consumers exist. Can you share with us a bit about consumers and the triple bottom line as well as what was the public's response to this speech?

Patti Poppe:

You know, Jason, some companies and many frankly business school graduates believe that there's only one bottom line, shareholder return. And instead we at CMS and it Consumers Energy believe there is a triple bottom line and that is the most sustainable business model. You know, we believe that when a company serves people, the planet, and profit great outcomes for all of our stakeholders are possible. When we share this message publicly, actually, I'm always surprised that people are surprised to hear me say it. It's always received well. And I think people are actually hungry for businesses to be a force for good. And increasingly our investors are asking for the same commitment to ESG environmental, social, and governance practices. And so I believe our triple bottom line is exactly what ESG investors are looking for.

Jason Price:

Given COVID, can you still move forward with the goals outlined in the triple bottom line? Or have you had to put this on hold for the time being in order to address a new set of priorities during the pandemic?

Patti Poppe:

You know, our triple bottom line has been as valuable as ever during the pandemic. Obviously our emphasis on people, our emphasis on the planet continues, our emphasis on protecting the prosperity of Michiganders, which drives to the profitability for my company all still go hand in hand during the pandemic, in fact, as much as ever.

Jason Price:

As mentioned, you stepped into this role in 2016. Innovation and adaptation do not come easily for large energy providers. Putting COVID aside for a moment, describe for us what is required to institute change at consumers, namely the pace, the people, and the barriers to change.

Patti Poppe:

Well, I will say this. As I've often remarked and marveled at the receptivity of my ideas once I became the CEO, sometimes I feel like the girl in the Frozen movie. I point at things and they start to freeze. And so I had to quickly learn to keep my hands in my pocket until I really wanted something done. And then our team just steps up, and delivers. It was a big change from being an executive prior to that where I'd have worked a lot harder to get people to enjoy my ideas.

Patti Poppe:

But you know, I'll just say that when I first became a CEO, and prior to it, frankly, we've been slowly implementing our Lean operating system. And then when I became CEO, people really knew that I was an advocate and they got on board and realized that Lean could be deployed quite effectively in the energy business. And it just took off. And so that was a sort of a no regrets early move. I'm glad my hands were out of my pockets on the lean move, but the Lean and our triple bottom line certainly have gone hand in hand. And the transformation at our company has been quite extraordinary.

Jason Price:

Fantastic. Let's now pivot to today. It's early March, Michigan governor, Gretchen Whitmer, is on TV providing daily reports on the coronavirus outbreak and she issues a moratorium on water shutoffs. At the same time, your company announces you're suspending shutoffs for low-income and senior citizens through July 1st. Cities across the country are scaling back activities and companies are shutting down. Everyone is sheltering in place. Just like hospitals, sanitation, police, and fire, we see that utilities and their workers are very much on the front lines. We need water, gas, and electricity running. Your employees are essential workers. We need the power flowing. Patti, take us into the C-Suite during these early weeks of March 2020.

Patti Poppe:

Well, I can honestly say, I don't believe I remember a more uncertain and unsettling time. You know, our first priority was the safety of our coworkers and their families. And we knew that we were in essential service. Hospitals need electricity and natural gas. And yet we had to figure out how to do that with this new hazard present. You know, I'm so proud and grateful that our safety culture that we've been working on for the last decade really took over. We quickly found ways to keep people safe, namely 5,000 plus of my coworkers transitioned to working from home. Some reported from home directly to a job site and skipped our service centers where they normally would meet to start their days. And then there were others of us who had to report to our facilities like our power plants, our control rooms, material warehouses, garages.

Patti Poppe:

Those team members really had to work side-by-side, but do it in a way that was safe. And with new safety practices put in place and quickly put those practices in place so we could continue to serve. And so they proved that we could keep serving safely. We had a thing. We're going to come together by staying apart. And I would say that definitely happened. So that's from the coworker perspective, but simultaneously we were obviously seeing the economic impact on our customers and the pain that our business customers in particular and therefore their employees were facing. And so commercial and industrial sales dropped about 20 to 25% literally overnight. And we knew that those customers were going to need our help, not just to deliver gas, but to help them figure out how to economically survive during this time. And so we were contacted by a large law firm here in Michigan that offered to partner with us and prepared our business customers for how to navigate during this time. There were a lot of stimulus, and grants and funding available, but it was very complicated for business customers.

Patti Poppe:

And so we partnered with this law firm to get all the programs buttoned down, and then we transitioned our business customer care team basically into a full service financial advisory team for our customers. And so we do think that in the long run, this will prove to have more of our businesses survive through this pandemic because we know the prosperity of Michigan depends on particularly the heartbeat of the small business across our state. And so we are working closely with those businesses to thrive. And then I'm particularly proud of our foundation giving. You know, we targeted it to minority owned and small businesses. And 60% of our grants were awarded to minority and women on businesses. And in fact, I just saw a report the other day that only one restaurant of the 700 plus Detroit restaurants that were recipients of PPP grants of greater than $150,000 were minority owned so only one of those 700 plus, and 60% rather of the grants that we have issued were for minority and women owned businesses.

Patti Poppe:

So I'm proud of the fact that our grant making under very uncertain circumstances was effective in reaching the types of businesses that are often left behind. And so, you know, our team just really came together. And as I mentioned earlier, the triple bottom line became essential during, especially the early days of the pandemic. And we really hooked on to our purpose, which our purpose at Consumers Energy is world-class performance delivering hometown service. There is no doubt that we had to draw on that purpose to deliver for customers during all of the uncertainty that was around us.

Matt Chester:

Patti, it's interesting to hear you say, the law firm reached out to you and there was kind of a partnership there. And I was curious if in the utility industry more widespread you noticed in response to the pandemic, if there was more of a trend to collaborate or discuss with peers what was going on, how to operate in this new world? How did the industry as a whole step up to work together?

Patti Poppe:

Our industry can be so collaborative. It's really inspiring. Every Friday, the CEOs of all the electric utilities would get on a phone call Fridays at 5:00 PM and just hear from each other best practices. So early on I shared this business customer influence and then quickly multiple utilities called us, asked us how we were doing it, and they did the same thing. And so we know that we're stronger by association, as we like to say, and that when we help each other learn best practices and deploy them quickly, we can be a real force for good in the economy.

Jason Price:

Patti, there's a lot going on obviously. The weight is on your back. How do you personally manage a company and maintain sanity and control throughout all of this? What did you do and what did you turn to?

Patti Poppe:

Well, I can just say this. You know, I relied on my coworkers and I mentioned our safety culture earlier. Our safety culture brings to life, both a mindset about safety, but also strong technical practices. And so our emergency response experience is very strong. You know? We respond to emergencies as a matter of practice. When others are taking shelter, we're heading out to respond. And so we had initiated our incident command structure in mid February, and my senior management team took on the role of what we called our crisis management team. And we met daily at 7:00 AM on the phone, I mean, video conference at 7:00 AM to talk about what had changed overnight. And we counted on each other to share what we have been learning and seeing. And we could quickly pivot as conditions changed, which they did daily. And this was really comforting for me.

Patti Poppe:

And I think it really brought our team together. As I mentioned earlier, we have this Lean operating system, the CE Way, early on one of the four basic plays of our system is called leader standard work, which is our daily operating routine. And we already had that in place. And so we already had a communication infrastructure in place and designated meeting times, a cascade of information, both to deploy direction to the team, as well as gathered daily feedback, and I can honestly not overstate how vital it was to demonstrate agility and adapt to all of the uncertainty around us. I know everyone was feeling it every day, like the whole nation was learning something new. And so the fact that we could demonstrate that agility because of the infrastructure, the management routine that we had in place was very reassuring to me. I was also really comforted to access our values.

Patti Poppe:

You know, I knew I needed to talk to my team. And frankly, when I didn't know what to say, because I didn't have new information, I just went to our values. And so I know a lot of companies have value statements and mission statements hanging on the walls. And all I'm going to tell you is that we took those words and we activated our purpose driven culture very intentionally during this time. And our coworkers noticed. We're doing kind of pulse surveys and we showed a 20% increase in my coworkers' feelings of empowerment, which you would think under a crisis, there would be less empowerment. We had more because there was so much uncertainty. And so we had anywhere from a hundred to 150% increase in the frequency that my coworkers actually experienced our values. Like they felt us coming together and mobilizing through our values.

Patti Poppe:

It was extraordinary. I just have to tell you, I was so surprised on a video call, on video communications in this new era of separation that we could come together so much. And it truly gave me confidence to keep doing what we're doing. And I knew that if our team felt valued, if they felt safe, if they felt cared for, then we'd get through this together. And I'm very certain that by leaning into our purpose and our values and leveraging the CE Way, it really helped us have a sense of certainty in very uncertain times.

Jason Price:

That's extraordinary. But I have to ask, what have you learned about yourself during this crisis?

Patti Poppe:

Oh. It's such a great question. You know, I'm a really optimistic person by nature. Under pressure I can always find something to laugh about. It is sort of that my expression of stress comes in the form of laughter. And there are times during this crisis when, honestly, even I could not find the laughter and I knew my team needed a cheerleader. We needed somebody to hold us up during this time. And so even I suffered personal losses through this time. I lost my dad at the end of February and then my sister six weeks later. And so, excuse me, but I had some tough moments and I was grateful in those times that, as a leader of a company, I actually could compartmentalize my sadness and channel it to joy for my team, helping them experience joy, even under pressure, and when they were having their own sadness.

Patti Poppe:

So I received a lot of gratitude from my team, for my encouraging messages and really frequent communication. I sent out a weekly video message and always tried to keep it upbeat and demonstrate sort of optimism for where we were headed. Now it wasn't a hundred percent, but you know, a lot of my coworkers really did appreciate the positive energy because there was really a sense of isolation that people were feeling or stress for their families or their own personal losses. And so bringing everyone together, I can say I didn't hit pitch perfect every time, certainly. But I think by being authentic with the team about what everyone was experiencing, I've just learned that even with a video communication, you can authentically express your care and love for someone else and it can come through. And so I've been very pleased with how technology has been more of an enabler than I expected. And so I think the lesson for me was just that I just needed to be where I was and try and bring that optimism and positivity to the team, even when it was hard to find for myself.

Jason Price:

Thank you for sharing this. Patti, a lot of us in the energy and utility industry are wondering if the pandemic is an opportunity not to waste. Do you agree with this? And how do you work COVID into your IRP and future capital plans? What changes do you anticipate at Consumers? And what do you expect from the regulators?

Patti Poppe:

Well, I'm happy to report that our clean energy plan is intact. You know, we launched it live last year. I did a tour all over the state, enrolling our customers and communities into this ambition for our clean energy plan. And frankly we don't plan to take our foot off the pedal. And when I talk about our foot on the pedal, I'm talking about our electric vehicles, of course, and that's on our path to a clean energy plan for Michigan. And we've reduced our carbon emissions by already 40% already. We're on track to an industry leading net zero methane for our gas business by 2030. And we've committed to net zero carbon company-wide by 2040, which is a decade earlier than the Paris Climate Accord, a decade earlier than many of the other energy companies. And a big part of that plan is our renewable energy to replace our coal plants, as well as energy efficiency and demand management to reduce peak load on hot summer days like we've been certainly having this year.

Patti Poppe:

And so flattening the curve was critical to stop the spread of COVID-19 and flattening the energy demand curve is just as important as a climate change mitigation strategy. And so we've been working hard at getting that message out, but it takes something different from our customers than before. And so we're doing the supply part by retiring our coal plants. We are adding renewable energy, but a critical part of our clean energy plan is the participation of customers with us in demand management that both saves them money, but also helps save the planet and is consequential to prevent the building of three power plants just for us through demand management. So early in the pandemic, we realized we couldn't get into customer's homes and do our traditional energy efficiency that we've been doing. And so I'm so proud of our team.

Patti Poppe:

They quickly pivoted worked with Google and a company called Uplight to launch the first in the nation, a hundred thousand Nest thermostat giveaways. So we made available to a hundred thousand of our customers free Nest thermostats with the support of Google so that we could help them save money, save energy, and save the planet. And so that's the kind of partnerships that even during a pandemic, we were able to deploy because our commitment runs so deep. And again, you asked earlier, how does the triple bottom line show up during a pandemic?

Patti Poppe:

This is exactly how it shows up. We can care for the health and safety of our communities and our coworkers. We can continue to put our future forward, clean energy plan, and put it into action by demonstrating agility with partners like Google. And we can serve the people of Michigan's prosperity, helping our businesses thrive, helping them earn a profit that then in fact leads to our prosperity and our to continue to deliver profitable growth for our shareholders. So the triple bottom line I continued to subscribe is the most sustainable business model. And during this pandemic it's been as important as ever.

Jason Price:

Yeah. These are unprecedented times for the utilities no doubt. Patti Poppe, thank you so much for joining us and sharing a bit about what it's been like to be in your shoes during these past few months.

Patti Poppe:

Well, thanks for having me. It's such a pleasure and it's a scary and uncertain time for a lot of people, but I hope everyone knows that they can count on their energy companies. And certainly my coworkers and I at CMS and Consumer's Energy to be there when you need us.

Jason Price:

If any of our listeners want to reach Patti, then you can do so through the Energy Central platform. Thank you once again, Patti Poppe, for your generous time on today's podcast. I'm your host, Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at Energy. Central dot com. And we'll see you next time at Energy Central's Power Perspectives Podcast.


 

About Energy Central Podcasts

As a reminder, the Energy Central Power Perspectives™ Podcast is always looking for the authors of the most insightful articles and the members with most impactful voices within the Energy Central community to invite them to discuss further so we can dive even deeper into these compelling topics. Posting twice per month (on the second and fourth Tuesdays), we'll seek to connect with professionals in the utility industry who are engaging in creative or innovative work that will be of interest to their colleagues and peers across the Energy Central community. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason PriceCommunity Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at community@energycentral.com. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening, and stay tuned for episode #19 in a few weeks! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

All new episodes of the Energy Central Power Perspectives™ Podcast will be posted to the relevant Energy Central community group, but you can also subscribe to the podcast at all the major podcast outlets, including:


Thanks to the sponsors of this episode of the Energy Central Power Perspectives Podcast: West Monroe, Esri, Guidehouse, CPower, and Hancock Software

Discussions
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Rami Reshef's picture
Rami Reshef on Aug 17, 2020

Thanks Patti Poppe for your truly inspiring message! The combination of dedication to your team, to your customers and to your "purpose-driven culture" that has enabled you to navigate with such creativity and finesse the enormous difficulties that @ConsumersEnergy faced and still faces during the pandemic is extremely encouraging. I was glad to hear that utility leaders meet and share best practices, further expanding the impact of your strategies. I was especially encouraged to learn of your commitment to net-zero carbon and net-zero methane and that your Clean Energy Plan has come through Covid intact. Congratulations to a true leader that enabled her team to "Come Together by Staying Apart" and who steadfastly drives for an indivisible goal of People, Planet and Profits. Utility leadership of this calibre will go a long way towards achieving the green energy future that we need to sustain our children.  

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