Say Goodbye to Theory X

We've had our share of Theory X managers. These are the guys who say, When I want your opinion, I'll beat it out of you. Send them to sensitivity training,

We've had our share of “Theory X” managers. These are the guys who say, “When I want your opinion, I'll beat it out of you.” Send them to sensitivity training, and they come back with, “My way or the highway.” A Theory X manager is all about control.

Why do companies allow bullies to exist? Because push works. Tell someone what to do and they'll do it, even if it's grudgingly. But “push” gets you only so far.

As an industry, we would be better served if we could tap into the “passion” that resides in all of us. But getting to that passion requires us to loosen control — a scary thought for many managers and executives. And in a crisis, when we need creative approaches to get out of a jam, we behave even worse. We need to get our passion back. It's been done in other industries. Why not ours?

Just look at Southwest Airlines. This airline is more profitable than the next five airlines combined. What is so special about Southwest? Well, this airline has reincorporated fun into an industry filled with long faces. Southwest knows that only a passionate, committed individual can thrill a customer. My last Southwest flight was a ball. We all sang Happy Birthday to the pilot. My flight attendant had an attitude and plenty of banter to go around. About the time we settled in, another flight attendant broke out in song. I even received a birthday card from Southwest. Travel is fun again, and I give Southwest the lion's share of the credit.

So, how do we get passion back in our industry? For starters, don't treat us as just another interchangeable part in a human assembly line. We are willing to give, but only if fueled by adrenaline.

We've had our share of executives who thought they had perfect vision: Just articulate the vision and the masses would follow. But leadership is more than setting direction and inspiring the troops. In today's world, we need to tap into the collective knowledge, energy and passion of our employees. Leadership is not about directing. True leadership is about serving. That is what we forgot in our mad rush to get bigger and to chase ever-higher returns.

At least one executive in our industry is staking his professional career on the belief that a “winning culture” provides the only sustainable business advantage. That person is Mike Chesser, CEO of Great Plains Energy (GPE; Kansas City, Missouri, U.S.). Chesser came to GPE in October 2003 and has already launched the biggest change initiative I've seen in 10 years.

Chesser found that GPE's regulated utility Kansas City Power & Light (KCP&L) already possessed a solid, well-managed, well-maintained transmission and distribution system, a highly performing fossil and nuclear generating program, and a competent and technical work force.

Instead of trashing what worked in the past, Chesser decided to build on what KCP&L did well, while preparing for an uncertain future. To set the direction for the company, Chesser charged six process teams to determine the most probable scenarios the utility would encounter and help set the direction for the utility.

Three of the teams looked inside, reviewing whether KCP&L had appropriate T&D and generation facilities. They investigated the impact new technologies — including distributed generation — would have on future growth plans. They considered how environmental issues might affect existing facilities. And, perhaps most importantly, they embarked on developing a winning culture.

The other three teams looked outside. They investigated how KCP&L should position itself within the greater community, looking at changing roles with customers, regulators, shareholders, vendors and Wall Street. They then investigated how these roles might impact the direction of the utility.

A Plan Emerged

The process teams sponsored a series of “strategy seminars,” held in the spring of this year. All employees were given the opportunity to attend at least one of these seminars. The seminars also were open to members of the community. I personally went to five seminars where I met mayors, regulators and customers. However, the most attentive attendees were employees who wanted to know where their company was headed.

Chesser began each seminar with words to this effect:

We are at a critical point in the history of Great Plains Energy. Our operating utility, Kansas City Power & Light, possesses a high-quality transmission and distribution system. We have low-cost, highly performing power stations. Our subsidiary, Strategic Energy, has a business model that makes money by providing energy to customers in deregulated states. Our company is financially sound, but we can't afford to coast. We face significant regulatory uncertainty and new environmental hurdles. We expect a host of new technologies, including distributed generation, to impact our industry. Our owners have changing expectations as well.

Now is a good time to step back and develop sound strategies to meet a broad range of possible business scenarios. We must have a flexible plan if we are to remain a top-performing utility in an uncertain climate.

We are engaging people from a broad cross-section of the industry to help us chart our destiny. We've asked every employee to join us in this process. Let's look out over a 10-year time horizon and see what possible futures we will face. We've seen a lot of companies fail because they focused on executing a specific strategy only to find the times have changed. Natural gas prices could go up or down. New technologies could be rolled out quickly or evolve over time. A lot of things could happen.

We are committed to developing a range of probable scenarios to enable us to prepare for the future with the highest probability of success. We intend to build this company on a winning culture based on innovation, flexibility and leveraging what we do well. Our culture will provide our sustainable advantage.

I ask each of you here today to lean into the process and do what you can to contribute. We will all participate in moderated group discussions, followed by a question-and-answer session. Make your voices count. I look forward to the journey we are embarking upon together.

Chesser got me totally fired up, and I don't even work at the company. Over the course of the past several months, I've talked with KCP&L employees throughout the company — power plant mechanics, field technicians, linemen, call center operators and dispatchers. I found that most of the KCP&L employees were willing to throw in with Chesser, although a few voiced skepticism and pockets of resentment still exist. (This utility went through repeated downsizings and two failed merger takeover attempts.) But I'm glad to report I didn't find apathy. Apathy kills. The KCP&L employees still care, and they want to make their workplace better. But first, they want to know the company is sincere. Chesser realizes integrity is everything and that the management team must earn trust by “doing what we say we are going to do.”

Those who think they can cruise at the new KCP&L will be sorely disappointed. Chesser made it clear that employees must be flexible, must be committed to continuous learning and must actively seek ways to improve the company. “There is no guaranteed job here, but there is a future for those who are willing to continuously reinvent themselves,” Chesser said.

It's been several months since the last workshop was held. I've had plenty of time to ponder why the GPE board of directors selected Chesser in the first place.

I tracked down Dr. Dave Bodde, who led the search committee that hired Chesser, and asked him what the board was looking for in a CEO. I love his answer: “First and foremost, we were looking for a commander, someone who knows how to lead. We were also looking for someone with operating experience.”

The board found leadership skills and experience in spades with Chesser, who gained utility experience at Baltimore Gas and Electric, Atlantic Energy and GPU Energy. The board is pleased with the direction Chesser is taking the company and already sees ownership of the culture expanding outside the executive suite. Bodde can't wait to see what transpires as GPE embraces a culture of openness and accountability.

Now that Wall Street is finally rewarding utilities who provide steady returns, it's up to our utility boards to put executives in place who know the business and have the ability to lead. But no more Theory X managers, please! Instead, let's tap into the talent that already exists. As Bodde says, “In the end, value is not built on Wall Street where bankers live, but in the power plants, maintenance yards and offices where the workers live.”

Utility employees, properly challenged and treated with respect, will determine the future of our industry.

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