Growing up on military bases, Suzanne Sitherwood felt right at home when she started in the oil and gas industry as a co-op college student working as a field worker for Atlanta Gas Light Co.
“I was out on trucks, in the dirt, with pipes and meters and so forth,” Sitherwood says. “Growing up on military bases it was an easy connection because of the men, trucks, uniforms, barbed wire fences and pipes. It all felt very familiar.”
She enjoyed what she was doing so much that following college graduation she decided to continue with the gas company. After 30 years at Atlanta Gas Light Co., where she had become president, she was recruited to The Laclede Group Inc. in late 2011 as president, and became CEO in February 2012.
The Laclede Group Inc. is a public utility holding company. Its primary subsidiary, Laclede Gas Co., is the largest natural gas distribution utility in Missouri, serving about 631,000 residential, commercial and industrial customers in St. Louis and 10 other counties.
With Sitherwood’s expertise in the industry and The Laclede Group poised for growth, the combination sparked a period of change.
“Part of the reason we created The Laclede Group was for growth,” Sitherwood says. “That was one of the reasons the board recruited me here. I was one of the architects with the prior company I had worked for, and it became the largest in its peer group.
“So the board was interested in bringing me here and growing The Laclede Group so we weren’t just one gas company, but could become several gas companies.”
Here’s how Sitherwood got The Laclede Group off and running toward growth mode.
Prepare for change
Having built her previous employer into the largest in its peer group, Sitherwood knew how to grow a business. Now, she was joining a new company that she had to get acquainted with before making any sudden decisions.
“I came here in September 2011 and that gave me a chance to lay low and meet the executive team, get to know the strength and talent that existed here, and begin to formulate that 90-day plan,” Sitherwood says. “I had a great opportunity between September and February to do just that, so when Feb. 1 rolled around, we were ready to move forward.”
Even more than getting up to speed, Sitherwood was pleased to see that The Laclede Group had balance sheet strength and strong leadership already in place.
“If you’re going to have a growth plan, you need to have a strong balance sheet,” she says. “It was nice to see a 150-year-old company ready for growth. The other piece was the senior leadership. There was a very strong team in place. However, it wasn’t organized in a way that it could integrate other gas companies.”
In order for The Laclede Group to bring in other gas companies to grow its portfolio, Sitherwood led a reorganization to line-up talent in specific roles and build the company into a business unit structure that could integrate additional gas companies.
“I needed to restructure the company to be business units with shared services,” she says. “The other challenge was technology. We’ve implemented a three-year technology plan to have enterprise systems so we can scale our technology to those other companies.
“We also needed to have standardized policies and procedures. They existed from an institutional perspective and generally the company knew how it operated around certain policies, but they weren’t documented, transparent and available. So we did that.”
Lastly, the way Laclede communicated and engaged the rest of the company was very insular because it was just a single gas company. Sitherwood needed to change that mentality.
“If you’re going to have a growth strategy, you need to talk to your employees,” Sitherwood says. “You need to be able to explain your industry and why you’re doing that, and they need to believe in it. But also, there are external stakeholders. We needed to be very proactive about talking to the investment community, regulators, our board and our shareholders.
“We needed to make sure that we were saying the same thing to our employees that we were telling the regulators and investors. We’ve spent a lot of time on that endeavor and quite frankly, I think we’ve done a nice job on that.”
What was most crucial for Sitherwood in those first few months at Laclede was the ability to get acquainted with the company and then create a vision for growth.
“You have to do your homework the first 90 days,” she says. “Don’t come in assuming one thing or the other. Come in and do your homework, but then chart that vision and stay focused on it to keep it alive.
“Sometimes you can come in with a lot of energy and then slow down instead of keeping that pace. If you back off the pedal after six to eight months, it quits feeling real to people.”
While you have to remain focused on your vision and growth objectives, you might also have to adapt to certain circumstances as you go.
“If it’s anything like it is around here, you’re changing the tires while you’re driving the car,” Sitherwood says. “You’ve got to keep the energy and the pace up, but at the same time not overwork people and keep them energized around it.”
Embrace your growth
Soon after Sitherwood came to The Laclede Group, the company had entered into negotiations to buy a company called Missouri Gas Energy. Sitherwood’s restructuring was a big reason the company was a front-runner in those negotiations.
“Had we not restructured, yes, we could have grown, but going through that due diligence process, that bid process, we had a clear line of sight to what that would look like because we already had the organizational structure in place,” Sitherwood says. “If I had closed that transaction and brought that company in while having to reorganize at the same time, it would be more chaos that’s not necessary.”
Some would argue against putting the organization in place first, because there is either an expense to that or there is a danger you won’t grow.
“I find that very interesting, because if I have a growth strategy and we all believe in it, we’re going to grow,” she says. “Why wouldn’t you organize around that? Why wouldn’t you put the fundamentals in place from a financial perspective and policy perspective and then stay focused on your vision?”
Laclede acquired Missouri Gas Energy from Energy Transfer Partners LP in September 2012.
“Energy Transfer Partners was clear from day one that Missouri Gas Energy was not strategic to them and they were going to divest this gas company,” Sitherwood says. “So we started working through a very competitive bid process and at the end of the day we were the bidder of choice.
“This is not a one-and-done. We’ve got a pretty strong corporate development group and we’re constantly modeling and analyzing other opportunities, and we hope to continue to grow the gas business.”
As of August, Laclede Gas Co. served 631,000 customers and with the Missouri Gas Energy acquisition it added north of 500,000 customers.
“When you add the two utilities together, we serve around 1.2 million to 1.3 million customers,” she says. “Why that matters to us is because we’re here to serve those customers as a gas company.
“The other metric I look at is how interested are institutional buyers and retail buyers in us? When we went to market to issue our equity, we ended up having a very strong offering. What that told me was people were very interested in us, had done their homework on our financial metrics and that was validating to me that we had the right strategy.”
In addition to a focus on acquisitions, The Laclede Group started a brand called Spire, which is all about natural gas-powered vehicles, further expanding the company’s services.
“This could be the future of natural gas in our country,” Sitherwood says. “Out of all the hydrocarbons, natural gas is 30 to 40 percent cleaner. The supply is long because of shell gas, about 100 years. The prices are low and volatility is non-existent. There’s a $1.50 spread in terms of a per gallon equivalent. Natural gas vehicles today seem to make sense.”
Spire was launched in partnership with Siemens and is just another part of Sitherwood’s grand vision to grow The Laclede Group.
“I enjoy the idea of growing this company,” Sitherwood says. “We’re now off and running.” ●
Takeaways:
- Do your due diligence when acquiring a new company.
- Construct a vision for growth and follow it.
- Find opportunities that expand on your vision.
The Sitherwood File:
Name: Suzanne Sitherwood
Title: President and CEO
Company: The Laclede Group Inc.
Born: Norfolk, Va.
Education: Received an industrial engineering degree from Southern College of Technology and a master’s in business administration from Brenau University.
What was your first job and what did you learn from it? I was a lifeguard working for the military. I taught individuals to swim who joined the military. I was always amazed the number of people who joined the military and never learned to swim. Living on a military base, I saw how leaders would take young individuals and build a team and inspire them to do the things they needed to do.
What is the best business advice you have ever received? You learn more from your mistakes than you ever will from your successes. You’ve got to take calculated risks and learn from them.
If you weren’t CEO of The Laclede Group, what would you want to do? I would want to take time off and travel around the world. It’s not so much about the travel for me, but about immersing myself in different cultures and appreciating different people and what’s important to them.
If you could speak with one person from the past or present, with whom would you speak? Barack Obama, since he has a few years left there are some critical issues our country has to deal with on an international level and a grass roots home level, and I’d enjoy talking to him about that. I don’t think he’s going to find the time on his calendar for me, but you never know.
Sitherwood on leadership: Leadership to me is not management. It’s about people and really inspiring them to do things individually and collectively that they didn’t think they could do. That’s what gets me up every day.
