Ken Silverstein EnergyBiz Insider Editor-in-Chief

While utilities have traditionally been seen as stodgy, they have also been viewed as tried and true -- entities in which their stakeholders could depend. But tumultuous times have forced many utilities to rethink their positions. And now some are struggling to adapt and with how to portray their missions. The goal now is to get to back on track and to show their customers, shareholders and regulators that they are financially solid and are able to guide their companies through a sea of changes.

"Tell your story," says Marian Calabro, president of CorporateHistory.net in Hasbrouck Heights, N.J. "Hammer home the core values that have always guided the company."

Power companies could do a better job, however, of improving their brand images, says Core Brand, which looks at these types of things. A company's mission and its brand name are important no matter what business model it may follow. But, if a utility operates in an unregulated environment and is competing for business, then it will place more emphasis on communicating its message than if it is tightly regulated and only delivers electricity to customers' homes and businesses. In all cases, utilities sell principally a commodity, making it difficult to make distinctions among business units offering the same product.

When it comes to communicating with its customers, National Grid (formerly Niagara Mohawk) says it has found the key: the promotion of economic development in the communities in which it serves. By helping to recruit new businesses and working to keep the ones already in its upstate New York region, the towns and cities there have become the utility's allies in its quest to build new natural gas and electric infrastructure. And the time and resources devoted to such endeavors is about more than goodwill. It's also about increasing returns, or improving the value of its assets.

"Our image is directly tied to the connections in the communities we serve," says Marilyn Higgins, vice president of economic development for National Grid in New York, a National Grid USA company that covers Albany, Buffalo and Syracuse.

Core Values

To be sure, the further removed companies are from the ultimate customers, the more difficult it becomes to make those connections. No one needs to be reminded of the harm caused by certain power marketing organizations that sought to manipulate market conditions so as to increase their profits.

The results of such illegal and unethical activity threw the industry in a tailspin and caused all utilities to take a hit. And U.S. legislators and federal regulators responded by creating tough financial reporting obligations, all to give consumers and investors more confidence in American enterprise.

According to Dianna Booher, author of Communicate with Confidence in Grapevine, Texas, utilities have a hard time structuring their message and they are relegating the delivery of that message to their lowest levels. Alienation therefore sets in.

Instead of talking in vague terms and causing consumers to doubt their motives, managers must establish a track record for being straightforward, says Booher. If they can't give answers, then they need to let communities know what options are being considered. At the same time, stakeholders want tailored responses and not boiler plate ones given to them by operators who answer their calls. Such "black hole" treatment, she says, emanates from the top.

Joe Sommerville, president of Peak Communication Performance in Houston agrees, adding that companies focus too much on what they want to say without thinking through the implications. In essence, those producing the messages are too far removed from those on the receiving end. Consumers are concerned about rising fuel prices -- a stark contrast to the seven-figure salaries that most CEOs take home. This discrepancy must be addressed, he says, noting that companies can give generously to communities.

It should all be ingrained in the mission statement. It is the main covenant by which everyone in a company must live. If workers have questions, they must look first to guiding principles. And those values must be communicated and understood not just by employees but also by vendors, consumers and communities.

"The mission statement should be big enough to capture the heart and soul of the organization," says Richard Keating, CEO of Keating and Co. in Florham Park, N.J. "Still, it should be real enough so that it is a living and breathing document" and therefore is able to evolve as a company grows.

Consider PSEG, which just spent $500,000 on its 100-year anniversary campaign. CEO James Ferland was dubious of spending the money but he changed his mind when he saw how the outreach effort affected employees, regulators and consumers. In fact, 77 percent of PSEG employees said the celebration helped them to understand fully the company's core values that center on safety, blue-collar roots and dedication to the home state of New Jersey. At the same time, the campaign assisted the utility in winning a major rate case as well as shareholder approval for its pending merger with Exelon.

Utilities "have come to realize that they, their employees and their customers are all in this together," says Billie Blair, CEO of Leading and Learning, a Los Angeles-based management consultancy. "They must show their human side."

Indeed, it all comes back to humanizing the message. It's been a difficult few years for utilities and that uncertainty has touched their customers and their investors. And while the subsequent scrutiny has been trying, it has forced companies to rethink their positions and to try and formulate strategies to communicate them and to carry them out. The aim now is to assure stakeholders that they are getting their financial houses in order and that they are here to serve customers. It's about taking the long view and building trust.

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