By Christopher L. Dutton, Green Mountain Power Corp.
Jan. 9, 2004 — In early 1998, Green Mountain Power was sagging under the weight of an adverse rate order disallowing costs incurred under an above-market, long-term power contract as well as the burden of its own bureaucracy.
Executives in their spacious, well-appointed offices had a great view of the sunsets over Lake Champlain and the Adirondack Mountains, but the business was in peril. We were confronted by an acute financial and liquidity crisis. Bankruptcy loomed before us.
We made some swift and seismic cultural changes, radically streamlined our business, and looked forward to dramatically improved customer service performance. Our place of business now feels much more like an energetic customer-driven technology-based company than a staid utility that’s been in business for 110 years.
Five years after our near financial meltdown, the value of our stock (NYSE: GMP) has risen from a low of around $6 per share to recent trading at $22 per share. Business Week magazine ranked Green Mountain Power 25th among “The Small-Cap Top 50” across all industries. Our cumulative five-year return is substantially better than both the S&P 500 and Edison Electric Institute’s (EEI’s) national index of investor-owned utilities.
Our customers have benefited as well. The percentage of customer service calls answered in less than 20 seconds has skyrocketed from below 30 to 85 percent. Our customer favorability and satisfaction ratings are at or above those of our Edison Electric Institute peers.
We’ve been able to do all this while maintaining for the last three years an incredibly efficient customer-served-per-employee ratio. Last year we served 461 per employee, while the national average in 2001 was 337 per employee.
Green Mountain Power’s blueprint for success addressed three key areas: simplify the business, make your colleagues and their efforts to serve customers a top priority, and have fun doing it.
What specifically did we do, and what could you do if your company was faced with similar circumstances?
Reinvent your business
To bring us back from the brink of bankruptcy, Green Mountain Power’s leadership team realized that it needed to make substantial changes just to stay in business. We had to demonstrate to our customers, our regulators and our investors that we were a company worth saving.
In an era when other utilities were pursuing lines of business that ranged from health care to energy trading, we knew that we needed to refocus our talents almost exclusively on what we do best. Since 1893, our core business has always been good old-fashioned power distribution. We decided to spin off our retail energy supply and other subsidiaries so that we could focus on making sure we provided the best possible value to our customers, shareholders and employees.
We hired an outside consulting firm that specializes in increasing efficiencies for banks to take a hard look at how we ran our business, and subsequently adopted more than 600 recommendations to change our work processes.
“Does this directly benefit our customers?” was the question we repeatedly asked during a review and redefinition of our roles at Green Mountain Power. If the answer was no, we stopped doing it.
For the company to slim down and become more efficient while dramatically improving performance, we recognized the need to rely heavily on technology and on the people who could develop and operate our new IT systems.
One key initiative was the purchase of relatively inexpensive products such as MapPoint, which our IT team customized to achieve the desired result. We’ve saved millions by coordinating our technology. Our line workers now have access to the latest data in the field thanks to their on-board ruggedized GPS laptops.
We once had a hard time answering customer service calls on time. As one of the first utilities in the nation to develop service quality standards, we made a commitment to our customers through cash-back service guarantees. Since adding new technologies and instituting intensive training programs, our customer service response time has dropped dramatically and our annual customer satisfaction survey indicates that our customers are pleased with the changes.
Nurture your corporate culture
From our former corporate headquarters — called the “Glass Palace” by some of our line workers who worked out of a separate building — we relocated to a much less expensive operations center with one-third of the headquarters’ square footage. To reinforce the message that we were serious about making the company more efficient, we reduced the number of corporate officers from 14 to six. We also trimmed our workforce from almost 350 to 190 with only two involuntary layoffs, while considerably flattening our organizational structure.
When we moved our headquarter staff to the operations center, we decided to outlaw private offices so that everyone, including myself and other senior executives, would work in cubicles or open spaces. No employee has office space bigger than anyone else. We renovated the building with a bold and bright open architectural plan to create more interactions among line workers, customer service representatives and management. Our meetings are now held in the hallways, around clustered cubicles, in a virtual conference room with no walls or in glass-walled spaces.
We try to motivate employees continuously through a spot-bonus program that is both spontaneous and personal. For example, last winter senior managers presented meter readers with hot chocolate, warm cookies and gift certificates for massages after a particularly prolonged snow and ice storm.
Some of our line workers joke that they work so they can hunt and fish in their free time. That’s why we maintain an account at an outdoor gear outfitter so that we can reward them immediately after they’ve persevered night and day during a big outage.
One of the most satisfying changes at Green Mountain Power is how its employees have rallied around “the new GMP.” The company knows that without employee support, all of its customer-focused plans would have failed.
Dutton is president and CEO of Green Mountain Power in Colchester, Vt. For more information about Green Mountain Power, please visit www.greenmountainpower.biz.
