Change is difficult. Just ask Sandra Meyer, president of Duke
Energy Ohio and Duke Energy Kentucky, who knows firsthand
what it’s like to be with a company through big changes.
Meyer was at the corporate headquarters of Duke Energy Corp.
in Charlotte, N.C., when company leaders asked her to move to
Cincinnati to help merge Cinergy, the $5 billion energy company
with about 2,500 employees, into the Duke fold in April 2006.
Everyone, including customers and employees, had to adjust to
the company’s new name and to having a corporate headquarters
in North Carolina instead of Cincinnati. Meyer would have to
assimilate herself to a new city and business community to keep
the company thought of as a good corporate citizen — something
that was extremely important for Duke’s growth.
“One of the biggest challenges was that we lost corporate headquarters here,” Meyer says. “For community leaders, we had to
give them confidence that we were still going to be active in the
community and a key contributor to the community.”
But the toughest part of Meyer’s new job was convincing consumers that the rate hikes instituted shortly after
the Duke merger had nothing to do with the merger.
Key to managing all the changes Meyer was tasked with has
been communication and participation. Meyer has made herself a visible leader of the company, believing that the best
executives are the ones that reach out into the community.
The power of communication
Meyer says communication needs to be consistent, clear and
frequent, whether it’s with customers or employees. For large
groups of people, including employees, written communication works well and gives employees something to refer back
to if they want to revisit the message.
“When you have a large employee base, sometimes that’s the
only way to reach everybody with a consistent message,”
Meyer says. “It’s a way of ensuring all recipients hear the same
message. Having a point of reference is good, particularly
when you’re talking about initiatives that are important, to use
those guidelines as a reference on whether or not their actions
are consistent with the message.”
The objective of communication, Meyer says, is to help the
audience anticipate and plan for change.
“With all audiences, the objective should be no surprises,”
Meyer says. “Getting out in front of issues is important for both
customers and employees so they know what to expect. For
customers, we like to provide choices as much as we can, recognizing that not everyone has the same needs.”
For Meyer, one of her early challenges was getting customers
to accept the company’s rate increases. Her strategy started
with a proactive communication program to help local leaders
understand why the rate hikes were needed.
She focused on Duke’s largest customers, the industrial and
business users. She saw that as her No. 1 priority, going to
many speaking engagements within her first six weeks on the
job. She also visited with the editorial boards of newspapers in
the Cincinnati area.
All of that communication had one goal: to make sure those in positions of authority were giving correct information to
consumers, large and small.
“We wanted to give them the background and prepare them
to answer questions that may come in their direction,” Meyer
says.
Also, Duke communicated with customers through bill
inserts and messages on its Web site to help explain the rate
changes. The company also sent separate letters to customers
to make sure it didn’t miss anyone.
“I think what helps the most is when you have a proactive
communication plan to educate others,” Meyer says.
Communicating the cost drivers and the timing was key to
getting customers to accept price increases.
“They may not like it, but they have time to plan around it. …
Some of them have long-term contracts (with their own customers) so they may not have the opportunity to factor in price
increases without a lot of lead time.”
The goal of both the business and consumer initiatives is for
consumers to believe they are getting a lot for their money.
“What we look at is the value proposition,” Meyer says.
“Focus on the value messages. Once it’s been implemented
and you’ve gotten through the initial change, you have to
move on. You deliver good, reliable service and have positive
interactions, and that will win back customers.”
To make sure customers are well-served, Duke implemented
a companywide training program called the Desired Customer
Experience. During that training, the company focuses on the
qualities it wishes to have its employees portray. The list was
given to employees as laminated wallet cards to give them
something to refer to. The list was: Listen respectfully, offer
choices whenever possible, keep customers informed,
respond promptly and keep your commitments.
The company also set up a dedicated hot line for employees
to call when a friend, neighbor or any customer has a problem
and needs help, and that internal phone number is listed on the
wallet card, too.
“We gave people a resource,” Meyer says. “It works quite
well.”
Buy-in from employees
Managing changes in an organization requires employees to
buy in to what the new leadership is doing. For Meyer, she first
had to replace some key people on her management team
before she could start on the buy-in.
Before Meyer started in the job, Duke had offered a buyout
package to reduce its work force by about 15 percent companywide. Three people in Ohio/Kentucky management
positions accepted the buyout, so Meyer had to hire three
direct reports.
She likes to have each candidate for a job interviewed by four
different people within the organization, each of whom is
assigned a different area of the candidate’s skills to assess. A
candidate’s track record tells a lot of what you need to know
about a person’s business acumen; interviews are more about
cultural fit, she says.
“If they are not going to fit well, you can’t fix that,” Meyer
says.
Meyer typically interviews a person twice before hiring. The
second interview is typically more relaxed and has a social element to it, Meyer says, to allow her to get to know the candidate more personally, and allow the candidate to get a feel for
the company, and the city they’d live in, if they live out of town.
Meyer says there are two key questions to measuring
whether someone is a team player: Tell me about how you
solved problems in the past, and tell me about a time when you
failed. Both situations help Meyer get a handle on how collaborative a candidate is. Meyer doesn’t hire anyone who comes
across as arrogant.
“I look for someone who is respectful of all people in an organization,” Meyer says.
After the staff was hired, Meyer sought to get everyone
working together as soon as possible and to get people to buy
in to the new directives for the organization.
“We all pulled together pretty quickly,” Meyer says. “I like to
work in teams. Communication is the key. We tried to keep
everyone updated on what was going on and provide opportunities for people to give input so that they feel part of the plan.”
Within her first month on the job, Meyer pulled all of the company’s managers together in a one-day leadership conference
to set goals for the year. About 150 managers were invited to
attend the conference.
“That really helped get everybody on the same page,” Meyer
says.
A second, follow-up meeting with the most senior managers,
about 30 people, was held six months later. Meyer has held the
same types of meetings this year, too.
To help the company’s overall employment base get to know the
new key executives, Meyer and other company leaders had open
forums with employees. The executives talked about the company’s goals and objectives, and then answered questions from
employees.
“The results of that were posted on our portal, so whether or
not an employee attended, they could have access to that information,” Meyer says.
She also instituted an employee appreciation day that has
become an annual event for the company. Duke provided two
free tickets for a particular Cincinnati Reds game for each
employee, which she says went a long way toward building
morale.
“That was very well received,” Meyer says. “We wanted to be
sure that the employees here, even though we lost our corporate face, felt that there was a belonging to the community.”
Activities that reward employees for hard work help the company thrive.
“If your employees are not supportive of the company, that is certainly going to bring it down,” Meyer says. “We like our employees
to serve as ambassadors of Duke. Having an employee talk ill of the
company keeps the company from being successful.”
Another key activity to getting employee buy-in since Meyer
arrived has been creating a leadership program for Duke employees called the Leadership Development Network. It’s a voluntary
organization that employees can join. The volunteers designed
their own program, which meets monthly and has about 250 members. The group mostly invites speakers to present on leadership-related topics, and guest speakers have been from within
the company and local community leaders, including the mayor
of Cincinnati.
“We have a very healthy and motivated group of folks
engaged in that,” Meyer says. “It has enabled a lot of our executives to meet employees they normally wouldn’t run into day
to day.”
Just operating the network has been a good development activity for employees.
“It’s run by the employees themselves, so part of the objective
is to give them roles within that organization that can give them
hands-on development of skills that they may not be able to develop on the job,” Meyer says.
Meyer cautions anyone who wants to develop a similar program
to make sure what they want to do is feasible and not too time-intensive.
“Executives can’t always attend as often as you’d like if it meets too
frequently,” Meyer says. “Once you’re up and going, what we’re looking at is major events quarterly.”
Giving back
Meyer has made a key part of her job being involved in area
chambers of commerce and other economic development organizations. The thinking is, if the area grows, Duke’s business will
grow along with it.
“Our business objectives and their business objectives are very
well aligned,” Meyer says. “Certainly a focus for us is economic
development, given the fact that we have a confined territory. A
chamber obviously is a conduit to the business community and to
economic development, as well.”
Making good on community commitments was important to
Duke’s standing in the area. “Anything that was committed, we
continued with,” Meyer says.
But for the future, Meyer and her team developed core areas of
focus that will allow the company to make the biggest impact with
the company’s charitable budget. The company will focus on environment and energy efficiency, economic development, and community vitality. Duke created a brochure that shows how much
money was designated for each of these causes and where it was
spent.
“We provided that to the nonprofit agencies in our territory so
that they will have a good sense of how we can match our objectives with their objectives,” Meyer says.
Duke has a companywide Global Service Event in April and May
that encourages hands-on volunteerism. The company’s employees provided the sweat equity for 150 projects throughout the
Duke territory in Kentucky and Ohio. Meyer herself went to the
site of an elementary school to assist with an improvement effort
there.
Her parting comments about that project sum up her best advice
about managing a company and her philosophy that has led Duke
to its prominence in the local communities it serves: “Never ask
someone to do something you aren’t willing to do yourself,” Meyer
says. “Lead by example.”
HOW TO REACH: Duke Energy Corp., (513) 421-9500, www.duke-energy.com