Written by: Jonathan Goldstein, Senior Vice President, CG Infinity Inc.
Welcome to the Lone Star state. We even have the word “Lone” in that phrase to emphasize the Texan DNA that we don’t need anyone to help us run our state. We don’t need the Federal government. We don’t need friends in other states. Nah! Just leave us A-“Lone” and, while you’re at it, hold my Texas brewed IPA beer for me, won’t ya?
We’re Texans after all. And, we can manage our own destinies just fine without your help.
Until we can’t. Then it gets kind of messy.
What we saw last week was not Texas at its best. What we saw last week was the result of cultivating a Texas culture that far too often rewards what Jim Collins referred to as Level 4 Leadership. Level 4 Leaders focus on what’s in it for them and create organizations that reflect that mindset. While it is quite possible for companies with Level 4 Leaders to lead their organizations to monetary success, these companies often fall short of greatness because their ethos is limited to the transaction. These are companies that often place market share, land grab, and money above all other things. From everything we have heard from ERCOT to the PUC to the energy generators and distributors…our whole energy ecosystem seems to be a cornucopia of Level 4 Leaders.
Nothing good ever comes of this and very typically Level 4 Leaders make decisions that are good in the short term but sometimes disastrous for the firm in the long term. For example, Kodak failing to see the promise of digital cameras; Blockbuster failing to see the promise of pivoting to streaming; and, most recently, Fry’s Electronics not seeing the promise of pivoting to a direct-to-consumer strategy. Myopia may feel good in the moment…it may even be lucrative in the short term, but it certainly does not age well. As business leaders, we should ask ourselves…when our HBS Case Study is written, which one do we want? Netflix or Blockbuster?
So, what is an industry to do? I think it starts by realizing that sometimes the better business model is the one that recognizes the greater good; the one that cultivates Level 5 Leadership and espouses a culture of higher purpose and value generation. Level 5 Leaders see past the transaction to the longer-term strategy.
A Level 5 Leader might have viewed the decisions that led to last week far differently. I surmise that they would have viewed their role in the life of a Texan has a higher and more purposeful responsibility. When faced with the decision to weatherize equipment, modernize plants, or plan for the remote edge case, they might have introduced other factors into the equation beside initial cost outlay and margin impact.
Whether that would have led to different decisions is conjecture at this point.
What’s most important, though, is how do we move forward?
Voice of the Customer
I think our road ahead starts with re-assessing how we are motivated. Last week left many Texans to wonder: Energy Company Executive…do you see me as a person or am I just a meter to you? Am I just an endpoint in your complex distribution network for where you send an invoice? Or is there any room in your model to recognize that I am a father, a husband, a person?
Aligning on business agility has some lessons to teach us towards this end. If you’ll allow me some poetic license with the first principle of agile, we might see something that is remarkably similar to Level 5 Leadership and directly tied to the voice of the customer:
Agile Principle #1
- Our highest priority is to satisfy the customer through early and continuous delivery of valuable software services.
It would behoove the Texas energy industry to adopt a broader view of their “why” in our lives. Yes, their companies exist to make money…and they should. By all measures, there is plenty of money to be made in Texas. But, if the purpose of Texas’s disconnected self-sufficient energy grid and generation ecosystem is to prove that everything is better in Texas…then we should all live that objective in all that we do and make that a non-negotiable goal.
And while we’re at it, let’s take a look at Agile Principle #4:
Agile Principle #4
- Business people and developers must work together daily throughout the project.
We should all work TOGETHER across the industry to make sure that our ecosystem is cognizant of the fact that everything we do ultimately nets out to a meter for which on the other side is a Texas resident or company.
That’s The Way We’ve Always Done It Isn’t a Reason To Keep Always Doing It
Some time has now passed since those initial decisions were made that formed the Texas energy industry.. Maybe we should challenge some of these fundamental precepts and ask if they are still relevant.
- Does it make sense for us to remain a disconnected grid?
- Are weather patterns changing sufficiently that last week might no longer be a once in a lifetime occurrence? Vis a vis, should we re-consider the expense of weatherizing our plants?
- Do we have proper risk mitigation plans in the case of a weather event? It’s not just Winter. It’s the rains and the hail and the tornado threats.
- And, above all, are our business practices aligned with just monetizing the meter, or are we thinking bigger than that?
We should not forget that on the other side of the meter…is a person…a mom…a dad…someone who may have served our country…someone who is somehow compromised and dependent on that energy to power something that could save their life in an extreme weather event. We have a higher responsibility. We’re not curing cancer in the energy industry, for sure, but we ARE still flowing a nectar (electricity, natural gas, water) that contributes to life, or at least someone’s quality of life.
We must keep the voice of the customer in our minds as we do what we do. Are we doing enough? Are we showing the greater world that everything is, in fact, bigger and better in Texas?