The Most-Important, Most-Important Function in Your Utility
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The New York Yankees were deep into a mediocre season, so this summer I started binge-watching “Mad Men,” the drama about an advertising agency and its creative director, Don Draper, set in the 1960s. If you haven’t binge-watched that series, I highly recommend it – you get so much more out of a well-crafted show the second time around!
Draper’s character, played by Jon Hamm in the role of a lifetime, sometimes said things that were relevant beyond Madison Avenue and applicable 50 years after the 1960s ended. Near the end of the show’s fourth season, in an episode entitled “Blowing Smoke,” the Sterling Cooper Draper Pryce ad agency faced a life-threatening crisis. Two departments, Creative Services and Account Services, were fighting over which should lead the agency out of its crisis.
As the departments waged a low-intensity conflict with each other, a member of Draper’s team asked him what they should do. “We’re going to sit at our desks and keep typing while the walls fall down around us because we’re Creative – the least-important, most-important thing there is,” he replied.
Now there’s a sobering thought. Every department in a company is, by definition, “important.” Some department has to be at the top and some department has to be at the bottom, right? What if Draper’s bitter comment were true? Let’s fast-forward 50 years and ask ourselves, “Are communications and marketing the least-important, most-important functions in a utility?”
It sometimes seems that way. Comments from clients and colleagues, plus EEC’s market research and my personal experience, tell me Marketing and Communications rarely carry the same heft inside a utility as Generation, Engineering, Finance or Legal. More often than not, we’re not even at the table where strategic decisions are made.
Only 21% of those surveyed in Budgets, Gadgets & Price Increases said their departments had a “significant” influence on their utility’s decision-making. An even greater percentage – 25% — said their departments exercised a “minimal” amount of influence on strategic decision-making at their utility. Communicators and marketers may not be well represented at the table where important decisions are made, but we’re sure expected to clean up the mess when something goes off the rails.
Complex and expensive issues have been roiling electric utilities in recent years. Hundreds of coal-fired plants are being closed or being forced to install pollution-control equipment. Although the U.S. Supreme Court recently ruled against the EPA on the issue of mercury reduction, the agency is back at work rewriting that rule. Hundreds of new power plants are being built to replace the units that have been retired. Transmission projects are being developed, often to bring renewable energy to load centers. Distribution infrastructure is being replaced, strengthened or extended.
All of that litigation and construction means lawyers, consultants and construction companies have made a very nice living from utilities in recent years, leaving less discretionary budget for communicators and marketers, among other departments.
Some of my contacts have told me “soft” functions like Communications, Marketing and Human Resources have suffered budget cutbacks while “hard” (i.e., quantitative) functions like Engineering, Construction and Finance have expanded. If you work for one of those utilities, it can be hard to escape the conclusion that Communications and Marketing are among a utility’s the least-important, most-important functions.
Communications Tip of the Month: Today’s unsettled market conditions create the perfect opportunity to showcase Communications and Marketing as valuable strategic risk-management functions. Be sure to speak your bosses’ language so you can package the value of your department in terms that are understood on Executive Row.
I don’t share that view. In fact, as I watch utilities take a PR pounding from the public over asset siting, infrastructure construction, rooftop solar/net metering and price increases, I continue to believe that Communications and Marketing perform vital risk-management functions for utilities. Utilities operate in a complex regulatory environment that grants stakeholders a lot of opportunities to make their views known to decision-makers like regulators. The recent decision by the Missouri Public Service Commission to reject a $2 billion transmission project was driven, in part, by a surge of opposition to that project from farmers and rural landowners.
Marketers and communicators are right-brain, creative thinkers. In a utility, that often means we operate in an environment dominated by left-brain, analytic thinkers. That’s not to say one side of the brain is more important than the other. We need both sides to function. But the brain, like businesses, functions best when there’s a balance between the creative and the analytic.
It can be disheartening to lose staff and budget authority to outside professional services providers or competing internal department like Construction or Engineering. But the present unsettled state of the utility industry tells me this is the perfect time for Communicators and Marketers to demonstrate their value to their company’s decision makers. We touched on that topic in a blog post earlier this year that stemmed from our research report, Budgets, Gadgets & Price Increases. Below are some of the verbatim comments we received as to how Communicators and Marketers win, and keep, their seat at the decision-maker’s table.
Across the board we found a common thread: Communications and marketing professionals earned the respect of senior leadership by demonstrating a consistent ability to design and implement strategies and tactics that help the company achieve its goals. That sounds like a blinding glimpse of the obvious. How, specifically, did practitioners accomplish that goal?
“We identify reputational risk, document our recommendations and develop recovery plans,” said a communications manager at a large, multi-state, investor-owned utility. “A sound communications planning document is key, as is not always saying ‘yes’ to someone’s communications request. Sometimes a communicator’s greatest value is derived from the work they don’t do.”
Another respondent, who works at a large Midwest IOU told us, “We don’t want to ‘always be in the public eye,’ but we don’t shy away from making sure that our stakeholders know our position on any issue that impacts us. It is important for us to be part of the conversation.”
A third respondent said, “All communication needs to be tied to an overall business goal and objective for it to be meaningful. If we are not trying to move the needle on something, then external PR/communication becomes noise.”
To those comments we would add one of our own, drawn from years of working in a utility which, at the time, was headed first by a career finance professional and then a lawyer: Learn to speak your bosses’ language.
That doesn’t mean you have to go back to college to get an engineering degree. But it does mean you need to know your way around your company’s financial statements. Learn about discounted cash flow. Stay abreast of critical environmental regulations coming from the EPA. Read the Supreme Court’s decision on the Mercury and Air Toxics Standards. Find out what a nearby utility did to vault to the top of the J.D. Power and Associates customer satisfaction rankings.
Worst-case scenario: If you do these things you’ll have something to contribute in the small talk that takes place when meetings start late. You might be surprised how those conversations could affect your career trajectory.
Or you can ignore the collective wisdom of your peer practitioners and make peace with working in the least-important, most-important department in your utility.
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