Captain Obvious

“Pain heals. Chicks dig scars. Glory…lasts forever.”

-Shane Falco, Quarterback in the movie
The Replacements

I hope you have seen the movie at least once. It has been described as the greatest football movie of all time. Thanks to a football strike by dozens of pro players, Gene Hackman who plays the character Coach Jimmy McGinty assembles a rag-tag group of semi-pro and amateur football players to keep the team’s standings intact ’till the end of the season… they turn out to be even more awesome than the actual professional team they’re replacing.

If you have seen it, you may remember that Shane prefaces this quote above with this: “I wish I could say something classy and inspirational, but that just wouldn’t be our style.” He then follows that quote on the next and final play of the game with “It’s been an honor sharing the field of battle with you.” As I close out my career in the energy space, this sums up my feelings well. It has been an honor … my distinct honor. Many of you are my closest friends and part of my extended family.

After they go on and win the game on the next play, Hackman says in the final voiceover: “When the replacement players for the Washington Sentinels left the stadium that day, there was no ticker tape parade, no endorsement deals for sneakers or soda pop, or breakfast cereal. Just a locker to be cleaned out, and a ride home to catch. But what they didn’t know, was that their lives had been changed forever because they had been part of something great. And greatness, no matter how brief, stays with a man. Every athlete dreams of a second chance, these men lived it.”

I feel that way. I have been changed forever having been a part of something great. I entered the industry as a kind of Red Adair, putting out the flames of competitive battles the electric utilities were having with cogenerators and the like. It was a wild ride in those days. Thank you all for that. In many ways I was the character Danny in the movie. I didn’t know what to be afraid of. I tackled it all.

In the process I made many friends … and probably a few enemies along the way. Sorry about that. It is just who I am. I was true to myself and, despite my wife’s fears I was going to get sued, dauntless. I knew we could win this game together. And we did.

I watched this movie for the first time on a flight to visit a utility client who had a cogeneration fire to put out. The flight was delayed so they handed out free headsets. What the hell. I don’t follow football, but if they are going to give it to me for free, I’ll watch it. Perhaps the reason I don’t follow sports is that my alma mater set the all collegiate record for most losses … I never saw them win a single game in the six years I attended to get my BS and MS in Chemical Engineering at Rensselaer. When I landed that night after watching the movie, I realized I had seen the best illustration of how good people perform when they are part of something bigger than themselves and don’t let fear cripple them.

Getting to that last scene in the movie was tough for the team. Just like all good movies, there are serious troubles along the way. In fact, a satisfactory result seemed hopeless. The key turning point in the movie is when Hackman pulls the team together after a devastating loss to Dallas. They are in the locker room and Hackman writes the word FEAR on the white board and asks what the players were afraid of. http://www.youtube.com/watch?v=i3O-kYwM8qY

The conversation starts out sidetracked by some silly talk about spiders and bees but then settles in on the word “Quicksand.” Shane expresses frustration about things going wrong which then leads to these players admitting that fears in their own lives were limiting their full potential on the field. They were all only one more game away from going back to their “normal” lives. This was their chance and they were afraid of blowing it. Sometimes just admitting we are afraid can go a long way towards losing that fear.

Silly movie? Perhaps not.

I love the way the movie starts where Hackman confronts the old guard of the coaching staff with illustrations how their paradigms based upon the professional players they lost were limiting them seeing the potentials in these replacement players. “They all have something unique to bring to the game. Let’s try to put together a winning team. If nothing else, they should be fun to watch!”

I wish we could play the energy game today the same way I saw it played when I entered it 30 years ago. I wish we still had the gall to do something truly outrageous like using a bunch of strippers as cheerleaders to distract the opposing team. We have gotten truly stale and bland. I wish we had people like Danny who, when I told them to get me the ball, would do almost anything to get it. I do share Hackman’s concern about him killing someone, but I love the attitude and full on engagement. I wish we had receivers you couldn’t overthrow.

I love the scene in the jail after the bar room brawl brought about by their defense of one player being ridiculed. I can only hope the team would stand behind each member with that much of a heart felt attitude. And, I guess I can’t get the song by Gloria Gaynor “I Will Survive” out of my head ever since.

This movie just makes me laugh and cry every time I see it. It was brilliant even in its silliness.

So, yes, I believe in the utility industry. Yet, at this time, it is frozen with fear: fear of doing nothing … fear of doing something. It is time to move beyond those fears.

Rarely in life do you get the chance in life to be part of something really big and important. Think it over. This is your second chance. You could be part of something.

I was a terrible student of history in high school.  It was my worst subject.  I barely graduated because back then you had to pass a four year comprehensive Regents exam in history.  I had high 90s in math and science but a low 70 in history.  It was so bad, and I was so afraid of not passing, that I took the class my senior year twice each day from the same teacher … twice!  I passed by one point.  Whew!

The only thing I remember from all that was the title of this blog.  Of course I remember more, but that quote was often repeated to me in my senior year as a reminder that we simply do not learn very much from history, and as a consequence, we are doomed to repeat it.  Albert Einstein’s definition of insanity is doing the same thing over and over again and expecting a different result.

The energy industry is stuck in a rut for the past few years.  We seem to simply regurgitate what we have all said and heard before, and we assume we have the complete truth when we do.  We don’t think critically.  We don’t look at the trends.  We assume we are on the right track and that all we need to do is stay in that rut and perhaps move a bit faster.

At the same time, I am witnessing the average American shutting down on energy agendas.  They are tired of trying and achieving so little.  They want to “escape” from today’s worries and woes and they simply don’t want to work very hard at anything any longer.  Don’t get me wrong, there are and always be that vibrant 1-2% that we always seem to attract and engage, but once you try to move off that to mainstream, you get lost in the whirlwind that distracts them.

What should we be learning and what should we be doing differently as a result?  I think you have to go back to the basics. We now make things way too complex.  People are tired and want easier things to do.  We assume people are rational decision makers.  They are not, they are emotional.  We assume people want to improve their lives.  Most are happy and just want to be left alone.

 

Sure, everyone would like more money, more respect, a nicer house, etc.  These are silly things so when you ask people silly questions about them you get silly responses that make you think you understand them.  One of my friends said it best.  People want something to do, someone to love, and something to look forward to.  Think about it.

People are happiest when they are productive.  People want to do things that make a difference.  We all know the story of the three brick layers who are asked what they were doing.  The first said laying bricks, the second that he was building a brick wall, and the third described his work as building a great cathedral.  Sure, the last person had the big vision, but they could all feel OK about themselves that they were doing something important.  It mattered.  Someone had to do it.  It needed to be done.  Idle hands are the Devil’s playground.  Be sure people have plenty to do that is meaningful and productive.

Meetings on the other hand I observe do precisely the opposite.  Ban any meeting that is not truly important.  No meeting should last a minute longer than it has to. In fact, I would suggest you establish a meeting policeperson in your company.  No meeting can be scheduled and no attendee can attend unless and until the agenda for that meeting, the time allocated, and the decisions or action items that are to come from it are identified, tied to a company agenda, and approved.  But Joel, if we have to go through all this, we wouldn’t have any meetings!  Then you shouldn’t!  And, be vigilant about latecomers (if you are not there early, you are late) and those who use digital devices during the meeting.  We banned them.  No phones, no iPads … nothing but a note pad.  And, if the person is not taking notes on either the papers being handed out or their own notebook, they are reprimanded.

It is time to get serious and time to get busy.  People need to believe they are earning their pay by contributing and participating.  If not, let them go and do the rest of your employees a favor by that.

Caring for others is also important.  You could flip the perspective around and describe that as being needed, or at least feeling they were needed.  Self-worth is important.  Having raised four daughters I know that all too well.  If you want to be sure your children stay away from the worst elements in society, be sure they have a healthy self-esteem.  Seems like we have some work to do here in our modern utility workplaces.  Lots of folks feeling unloved.

We used to call it mentoring.  I think we need that again.  Pair people up and have them invest in each other’s professional and personal development.  The scariest thing I ever hear in life is the phrase “I don’t care.”  People should care deeply about their own lives and the ones it touches.  If they truly don’t care, let them go and find a place they want to work where they do care.

Finally, the light at the end of the tunnel is hopefully not an oncoming train.  I remember visiting one client and he had this sign on his door:  In an attempt to be more efficient, the light at the end of the tunnel has been turned off.  Sad.   But, he was expressing his lack of anything to hope for.  This is possibly the biggest hurdle the energy industry has at the moment.  They are not looking forward to anything.  In fact, they look into the future and see nothing good.

As I have read the works of others who faced desperate times and hopelessness, I have been inspired by their simple faith statements like “all things work together for the good” and “every cloud has a silver lining” and others.  Some may criticize them as Pollyanna.  I think our minds are more capable of being creative and productive when we are not hunkered down in fear, but rather are searching for success.

The old story of the boy in the barn comes to mind.  Others see a pile of manure.  The boy digs feverishly into the pile saying “there has to be a pony in their somewhere!”   There probably is.

It is funny how often we refer to the “good ole days” as if they were really all that good.  They were simpler.  They were certainly less hectic.  But, what do we miss so much?  Could it be that we did things that mattered, were loved by people who were not distracted, and had so much to look forward to?

We Americans all seem to love a good scare, especially if it is tied to an underlying conspiracy theory.  Aliens visited our ancestors and will return again.  Asteroids will destroy civilization as we know it.  It happened in the past and it is certain to happen again.  Global Warming (sorry they now call it Climate Change because they can’t see any warming to speak of), Global Cooling, Ozone Depletion, Y2K and the list goes on.  Boo!  If you check the dictionary, this form of boo always needs the exclamation mark.

How about this possibility?  Utilities are out to get us!  They are secretly conspiring to convince us that natural gas is now cheap and the supply will last forever … just long enough for us to let them all build natural gas power plants and then gig us with high prices when natural gas returns to its proper Btu parity value!  Boo!

Boo can also be very scary when it is used as a verb to show contempt such as when performing artists are booed off the stage.  This is my fear right now for the electric utility industry.  I fear the day, perhaps very soon, that the seeming partnership utilities have with renewables will turn rather negative.  Politics makes for strange bedfellows, and it has been interesting to me to see the previously antagonistic National Resource Defense Council (NRDC) become an advocate for electric utility ratemaking to preserve the renewables game going forward.

I saw the same thing happen after the energy embargoes of the 1970s.  PURPA was designed to foster cogeneration and utilities were being forced to buy the output in New York State at $0.06 per kWh despite the market value on the grid at the time being $0.03-$0.04.  I watched the utilities that were deregulated just ask for stranded cost recovery and promise to keep rates the same for ten years only to be clobbered by the rate true-ups after that.  The pattern always seems to be the same.  Fear gives way to political positioning rather than being the standard bearer for truth and taking the heat.

Frankly, I am alarmed at the current state of utility affairs in the United States.  It reminds me all too much of the movie The Wizard of Oz.  The electric utility industry is all hunkered down in fear.  They, under the guise of political correctness, are afraid to stand up to their enemies and frankly afraid to enlist the help of their allies as well.

This is truly sad.  The closest analogy I can come up with is how elephants are trained in the zoo.  They begin their lives chained to a stake in the ground and learn quickly that they can’t pull free.  As they get older, they simply assume they still can’t pull the stake out of the ground.  Even as full grown animals, they stay tethered to that stake in the ground until their trainers free them.

Oh please … pull on the stake … it will come out of the ground so easily!  And, no, there is no Boogey Man that will bite you!  Please?!?  Face your fears!!

I loved the movie The Wizard of Oz.  All the characters were scared of something, and they seemed to have legitimate reasons to be scared.  Scarecrow, Tin Man and Lion all had seemingly valid reasons to go to see the Wizard to get what they needed.  Scarecrow needed a brain.  Tin Man needed a heart.  And Lion needed courage.  Give me a break.  You have the diploma, clock and medals.  What you lack is the confidence to pull yourself out of the rut you are in!

Our son played the Wizard in a local drama production and as a result I listened carefully to the lines.  They are actually rather profound and portray the utility affairs rather well.   Because our son was so captivated with drama, I decided for us all to see the Broadway Play Wicked in New York City as part of a trip there a few summers ago.  As you know, it is somewhat of a twist on the Wicked Witch of the West.  It is kind of a back story on The Wizard of Oz.  It was a wonderful event, and will never forget it.

But, one of the songs from Wicked has really stuck with me.  It is the song Wonderful.  Here are some of the lyrics that I think apply here:

“Where I come from, we believe all sorts of things that aren’t true. We call it history.
A man’s called a traitor or liberator. A rich man’s a thief or philanthropist. Is one a crusader
or ruthless invader? It’s all in which label is able to persist.  There are precious few at ease
with moral ambiguities, so we act as though they don’t exist.”

I am terribly concerned that the labels that will persist for the electric utilities emerging from these past few decades will be that it was lethargic, heartless, and cowardly.  How’s that?  Did I get your attention with that?

Lethargic because it refused to state the obvious: you can’t assume renewables and energy efficiency will avoid the need for new generation.  Heartless because, at the end of the day, it is a cost recovery business and will be held whole so it didn’t really care as much about the financial damage done to others, especially the less financially able.  There will be financial pain to the industry, but it is not like a free market company and certainly not akin to what fragile financial postures look like in the masses.  It will survive and evolve … kicking and screaming along the way … but it will make it.

Cowardly may seem harsh until you look at what the word means:  lacking the courage to do or endure dangerous or unpleasant things.  Hmmm.  Political correctness is therefore another word for cowardice.  I rest my case.

I am deadly serious.  I am disappointed by the cowardice of the industry right now.  I am alarmed by the heartless disengagement as the utility’s customers are lured into energy systems that will fail to provide the benefits promised and will be abandoned just the same as the boondoggles during the second oil embargo.  I do wonder why the industry has become so lackluster.  It has some of the smartest people on the planet in it.  Maybe it is partly because those who know what is really going on are surrounded by so many new employees who don’t.  Couple that with the popular management style of consensus decision making and you blunt the impact of this wisdom.

Let me remind you all that consensus caused the State of Virginia to legislate that the constant Pi be rounded to 3.0 instead of the irrational number it is.  “There is always a well-known solution to every human problem – neat, plausible, and wrong,” wrote H.L. Mencken in 1917.

Maybe the problem can be summarized by the scene in Star Wars where Luke first encounters Yoda.  His plane is sunk in the swamp.  I am no Yoda but my prayer for all of you is to watch this brief scene and break that silly chain you think is holding you back.  http://www.youtube.com/watch?v=BQ4yd2W50No

Do.  Or do not!  There is no try.  And, if you want to know why you are still chained to the ground, watch the next scene right up to the very end:  http://www.youtube.com/watch?v=HMUKGTkiWik

Boo … (the verb).

I truly wonder why IQs seem to have dropped among the really smart people when things like those shown in the press release below can happen.

I am a fan of fuel cells for what they can do, but I am always struck by the lack of discipline in considering where the source of hydrogen is going to come from and what the full stoichiometric balance will look like.

The raw fuel supply for these hydrogen fueling stations is natural gas.  Let’s call that essentially methane, or CH₄.  If you split off the hydrogen, where did the carbon go?  Did it fall to the ground as a lump of pure carbon?  No, it normally forms Carbon Dioxide so where did that go?  How come no one ever talks about that?

Then, let’s get back to the reason we all talk about hydrogen in the first place.  We want to use it in fuel cells.  Well, if we have hydrogen fuel, we can run our existing cars on that and produce only water vapor out the tail pipe with only a small carburation change once we figure out how to add the tanks of it to our cars.

Can you see the farce here?  Why aren’t the smart people on the planet calling this the farce that it is??

Energy Commission will fund new hydrogen fueling stations in California

May 2 – McClatchy-Tribune Regional News – Mark Glover The Sacramento Bee

http://www.sacbee.com/2014/05/02/6373512/energy-commission-will-fund-new.html

The Sacramento-based California Energy Commission says it will invest $46.6 million to accelerate the development of publicly accessible hydrogen fueling stations

I went to see my Dentist a few days ago.  It is a twice a year thing and, despite the discomfort, it is always a pleasure.  The hygienist has become a good friend.  She and our dentist have watched our son grow from a toddler to a young man.  We value the relationship even though you could say the services are a commodity.  There is a sense of caring that goes beyond the fact that we are paying for a service.  When anything has ever happened to my teeth I feel they both care deeply that I get things back to normal.  He never seems rushed (even though I know other patients are waiting to see him) and he never seems prone to “spend my money” unless it is the right thing to do.

As a consequence, we recommend his practice to anyone and everyone we come in contact with who is seeking to find a dentist.  He often thanks us for those recommendations and has recently told us to stop doing that … he has no more room to take them!

This is the essence of what people today are talking about to replace customer satisfaction as a metric for relational success.  It is called net promoter score and you can imagine that my dentist has a very high one.

I also learned something a while back from my Dentist.  The title phrase for this article was posted conspicuously on that light he shines into my mouth.  I had to look at it a lot.  We all know it is true, but how many of you floss at least once a day?   There was one time in my youth when I didn’t pay as much attention to flossing as I should … and the results were very bad.  I lost two teeth as a result.

Yes, flossing can make your gums bleed, and it can be a bit painful to floss the first time if you haven’t been flossing regularly.  But, it if you fail to floss those painful situations, they will get worse and when they do, it threatens your teeth.  My hygienist tells me it can also threaten your general health.

So, now let me get to my point.  How does your organization handle painful customer situations?  Does it welcome them and want to floss them?  Or, is your culture afraid of bad news?  Does it shoot the messenger?  Or, does it view customer glitches and complaints as opportunities to improve and possibly even transform your business?  I hope it is the latter, because it needs to be.

Oh, and by the way, you might want to measure your net promoter score.  It is probably negative!

My personal belief is that the secret to marketing and sales success is to focus on customer pain and fear.  That is where I can be of most help.  Do you hear the pain and anguish your customers are experiencing that go beyond your energy supply responsibilities?  Are they wincing under increased environmental pressures?  Are they coping with cost cutting pressures in their business?  Are they competing with other members of their own company for market share?  That’s right … is your local manufacturing plant competing with other plants in the family of production resource for business?

There is a cute story I think might help here.  A father drives up to a local bank about a decade ago because his young daughter wants to deposit some money in her savings account. She walks in, waits in line, and then presents her $0.65 to the teller for deposit.  The teller curtly tells her the bank does not accept deposits that small.  Tearfully, she goes back out to the car and repeats the story to her dad who then promptly walks in and asks for a certified check for his entire bank balance of several hundred thousand dollars so he can move it to another bank who will honor his daughter’s wishes.

My fear is that utilities are missing huge opportunities here under the guise of efficient operations and the natural cost cutting agendas that are so appropriate at this time.  Everyone is under pressure.

It is rather common for customers to come to their energy providers and look for some help when they are under cost cutting pressures.  After all, when the world price of aluminum is low and electricity is one of the largest cost components, it is only natural for them to seek relief.

But, many of you will respond with the obvious statement: “They already get our best price because they are a high load factor customer!”  Go ahead, keep that excuse going and watch them go out of business.  Or, you can redefine your relationship to them recognizing they are in a commodity business and that your price is critical to their survival.  The right answer is to write a derivative contract to them that, on average, indexes the price of power to the world price of aluminum.

I can see you wincing.  You don’t want to work that hard.  Or, worse yet, your answer to me is: “You don’t have a program for that.”   Oh please.  What other excuses do you want to throw at me?  The fact is that you are just not willing to take on the customer’s problem and solve it.  Plus, the rep who brought this situation to your attention was probably told that this customer was bluffing and to stop asking for more concessions.

How do you solve this problem?  You go to an energy trader who writes a derivatives agreement that pays you a constant price for your electricity and then gives the customer a variable price to reflect the market for aluminum.  It is called a “contract for differences” agreement and happens all the time in the natural gas business.  And, yes, the customer will pay an insurance premium over just facing the market variations without it.  After all, someone is giving them a hedge and they should rightfully have to pay for that.

Maybe this one hits a bit closer to home:

A recent Utility Dive survey of what worries electric utilities identified distributed generation as the top marketing and customer service issue.  The industry knows that this is being driven by financial facilitation – customers are not buying the DG, they are being sold the benefits in some form or fashion and the “deal maker” is packaging up the system in that deal.  Yes, this is being fostered in part by incentives that may be questionable in the full light of day.  Yes, these agents are unregulated and the incumbent may be regulated.  But, no, this is not a healthy sign of flossing your teeth regularly.

Do you know what the customer is being told about their electricity savings?  If you do, do you believe that the customer is going to get the benefits promised?  I would suggest the answer is “no” given the recent actual performance of solar and wind systems as documented by others.  We are all aware that things do not work as well as we hope and that Murphy’s Law is at work all the time.

Can’t you see that by being a bystander and just letting customers get duped that you also suffer in the process?  What if they sign deals that threaten their wellbeing?

Finally, let me offer a true story about the carpet industry in upstate New York.  It was under constant attack by everyone for its waste water discharges.  The rules were getting tougher by the year.  A city in North Georgia decided it could attract these customers by building waste water treatment facilities that could accommodate carpet finishing plant effluent.  They offered to build them and simply charge the carpet companies a fair price to take away their sins so to speak.  It is now the carpet capital of the world.  All because it decided to solve the customer’s problem.

So, are you just going to wince and let your teeth rot out?  Or, are you going to floss your customer situations and watch what a healthy set of gums brings you?  Your choice.  Only floss the teeth you want to keep.