Most utility company heads haven’t had to go through what Nick DeBenedictis has had to endure over the past four years.
What the chairman, president and CEO of Aqua America Inc. has had to endure is rapid growth — the ultimate double-edged sword of business. Rapid growth means rapid success, but it can also mean outgrowing systems and processes way too quickly, creating more problems than it solves, both financially and culturally.
Most of Aqua America’s growth was due to a series of large acquisitions in 2005 and 2006 that greatly increased the municipal water system management company’s presence in the southern U.S., raising the total number of states in the company’s footprint from six to 13.
“Normally, utilities grow at 1 percent,” DeBenedictis says. “We have grown at 50 percent over the past few years. That gives you an idea of the size we’re dealing with. We had to get systems in place, people in place and change out management. The digestion period was one of our big challenges and overlaying that was the recession, the credit crunch and everything else that was happening as we were trying to grow.”
Managing water utilities is a capital intensive business. While Aqua America generated $670 million in 2009 operating revenue, the company is also slated to pay out $300 million in capital improvements to their water systems this year.
On top of managing a high-volume flow of cash, DeBenedictis is also in charge of maintaining and promoting a service-oriented culture to the company’s 1,800 employees.
The capital investments and culture are the two main prongs in Aqua America’s mission to build lasting relationships with customers. Water utility customers can’t choose what company supplies water to their city, but many cities have a choice as to who provides their citizens with water service. If Aqua America doesn’t maintain an impeccable customer service reputation, future growth opportunities might be harder to come by.
“You want to make sure that you have happy customers in any case, not just begrudging customers,” DeBenedictis says. “That’s why we wanted to make sure we had good people and good systems in place. In many cases, the reason we were able to acquire a company was because that company didn’t have good management. We’ve had to come in and make nearly a 100 percent change to first-, second- and third-level management.”
