Morgan O’Brien’s vision wins over his employees at Peoples Natural Gas

 

When Marcellus Shale drilling began in Western Pennsylvania, Morgan O’Brien wanted to be part of that resurgence. He knew the development of natural gas would create growth opportunities.

As CEO of Duquesne Light Co., O’Brien was already involved in economic development and community support — something he not only believes in, but finds to be good business. So when an investment fund looked to buy the gas utility in Pittsburgh, O’Brien made his pitch.

“I shared with them my belief that the utility could play a meaningful part in helping the region grow, and in doing that, the business itself would grow,” he says. “It would have more customers — more people using gas — and gas would become more important to the different businesses. I described what that vision could look like and they completely embraced it.”

In 2010, he became the president and CEO of Peoples Natural Gas Co. LLC. Peoples had been a division of a larger electric holding company, Dominion Resources, headquartered in Richmond, Virginia.

“The first opportunity I had, which was my starting point, was to create a whole company, rather than just being an operating division,” O’Brien says.

Between adding a call center, administration and support, the new company, which had been legally around for about 125 years, brought 300 new jobs to Pittsburgh. More importantly, it was forged around a new identity.

“We created a simple vision statement that said: The reason we exist is to make our customers’ lives better, whether it is a residential customer or a business customer,” O’Brien says.

A lot of people view utilities like government.

“We don’t necessarily, because we’re a regulated monopoly, treat customers like a retail company should treat its customers — somebody who can leave you or buy product from someone else,” he says.

Even today, O’Brien and his leadership team spend time convincing employees that Peoples needs to add value to every customer it serves.

But it’s easier to get that buy-in from both his employees and investors because the results have proved O’Brien’s point. In almost eight years under his leadership, Peoples has grown from 500 employees to nearly 1,500. It’s also selling more gas than ever, going from 350,000 customers to more than 750,000.

You’d better believe it

It’s one thing to talk about running a company differently — with a focus on partnering with customers — but it takes time to show it.

O’Brien says in the beginning, employees who had been part of the operating company or came from other utilities didn’t understand what he was saying and how deeply he meant it.

“You have to believe in your heart what you’re doing, and you have to recognize that it’s a long journey to get a company and employees to embrace a vision and values of what you are and how you want to do things,” he says.

O’Brien always looks at people with challenges and thinks that he could easily be that person. Whether he’s supporting a cause personally or Peoples is participating in an initiative to help the region in the long term, that compassion sends a message to his employees.

But cultural change takes time and persistence. People will resist. That’s why authenticity is so important.

Business leaders will hear a thousand reasons why employees want to continue to do things the same way, O’Brien says. Things like: We’re busy. We don’t have time to think differently and investigate new ways; we barely have time to do the things we have to do now.

When leaders are constantly looking at everything, and then even after they make changes, they go back and see how to change even more, there will be pushback.

“As a leader, whether you’re a CEO or a group leader, it starts with believing in it and embracing it. Then, having the courage and the stamina to know that it’s a journey,” O’Brien says. “In most organizations, it takes a lot of time and winning people over one by one.”

Back it up

Actions can make the difference. If you believe in what you’re doing, you show it by spending money, O’Brien says. Whether it’s a good year or bad year, whether it’s a good quarter or bad quarter, the core priorities remain the same.

Not only did Peoples engage with businesses to proactively try to help them grow, it also supports people who can’t afford the product.

“I tell our employees every day that a business is only as strong as its relationships with its customers, and that includes people who can’t afford to pay their bill,” he says.

There’s a business case for helping those people because they become paying customers later. It also creates a more loyal and stronger work ethnic in your newly engaged employees, which adds value for the owners of the business.

But it’s also personal for O’Brien.

“My thoughts were: I want to have a legacy that says not only did we help the region grow, but we did it the right way, in a way that we would be proud of for our kids and our grandkids,” he says.

For example, one challenge is infrastructure. About one-third of Peoples underground pipes were 60 to 100 years old with a high risk for failure. Plus, old pipes leak gas that can have a meaningful impact on air quality.

O’Brien says not only did Peoples start a pipe replacement program, it engaged with Carnegie Mellon University, which had begun a federal research program on methane emissions and air quality. Every month, CMU researchers meet with Peoples engineers to discuss how to prioritize the pipe replacement to improve air quality.

Peoples also reached out to the Environmental Defense Fund, which was mapping air quality in cities like Philadelphia, Boston and New York by piggybacking detectors on Google mapping cars.

“We called them and said, ‘Would you come to Pittsburgh and do that same map?’” O’Brien says. “They were, I think, surprised that a utility would ask them to help identify an issue not many people knew about.”

At the project’s press conference, O’Brien says Gov. Tom Wolf pulled him aside and asked why the company was opening itself up to such criticism.

“I said, ‘We’re taking ownership of an issue that’s important. We want our legacy to be that we fixed it — not that we ignored it or denied it or argued whether it really existed,’” he says.

These are the actions that have won people over, even though not every employee gets it and not every transaction is done as it should be, O’Brien says.

Always building on

Despite the progress, O’Brien and Peoples are not done. The world, technology and customer expectations keep changing.

“We’re not perfect. We don’t treat every customer the way we want. We don’t handle every issue the way we would like to, but we’ve made dramatic changes in how we’ve done things,” he says.

It’s hard to make big changes, but O’Brien says every day, there are opportunities to continue to incrementally improve, whether that’s using drones to inspect pipes under bridges, adding technology to make it easier to know which truck is closest to a problem, or tracking work orders similar to FedEx packages so customers have real-time information.

If people believe in a culture of improvement for customers and the community, they won’t be embarrassed or afraid to take a risk on new ideas.

O’Brien knew his vision and values were becoming a reality when he heard employees lower in the organization say something that reflected what he’d been talking about, or they did exactly what he hoped they’d do, not what they’ve done in the past.

“You need a few of those wins that say, ‘It can work. It does make a difference, and we’re just going to keep the journey going,’” he says.

Whenever that journey seems too long or he gets discouraged, O’Brien likes to meet with his employees. He tries to get to all 28 locations twice a year.

“Sitting down with the people out in the field and listening to them — not just talking to them, but listening to them — it reinforces, gets me energized and reminds me at the roots of what it is we do,” O’Brien says.

However, as your organization gets bigger, the length from your head to your arm becomes further away. There are more people out in the field who are away from the executive office. But it’s a good challenge to have.

“To me, that’s why tomorrow will be an interesting day and the day after tomorrow will be an interesting day,” O’Brien says. “Because you always have new issues, new challenges and things you hadn’t thought of that come up.”

 

Takeaways:

  • Belief — and change — starts at the top, but takes time.
  • Market forces shouldn’t shape core priorities.
  • There’s always room for improvement.

 

The O’Brien File:

Name: Morgan O’Brien
Title: President and CEO
Company: Peoples Natural Gas Co. LLC

Born: South Hills, Pittsburgh

Education: Bachelor’s in accounting and master’s in tax, Robert Morris University

What was your first job and what did you learn from it? I was a laborer, working construction. My dad was an Irish immigrant. He taught me that a job wasn’t something you were entitled to. It was a gift, so you had to work as hard as you could.

What’s the best business advice you’ve ever received? When I was a CPA, I remember going into a meeting to negotiate a transaction and the partner said, ‘We know what we know, so we need to listen to understand what they know and what their issues are.’ I’ve applied that across the board.

When I meet with employees, I always tell them: ‘Executives don’t make bad decisions because they’re not smart. They make bad decisions because they don’t have good information or they’re not close enough to an issue.’ I will ask them, ‘What is it that you know that would help me make better decisions?’

Why are there so many Peoples Gas companies? When utilities first formed, it was a common name. There’s a Peoples in Tampa, Florida, Chicago and here. We like the name, so we’re keeping it.

When you look at branding and trademarks, there are four utilities with Peoples. We allow them to use the brand if we have it. If they have it, we call and ask them. We’re not in Chicago. We’re not in Tampa. They’re not in Pittsburgh. If we were all Coca-Colas, it would be a big problem.

If you weren’t a CEO is there another job you’d like to try? I always tell people I’d like to be king, for a short time, and fix the problems in the world.

When I started I never had the dream of being a CEO. But once you’re in those shoes — and even though there’s a lot of a pressure with it — the ability to have influence and use it in a good way, to try to grow a company, create more jobs and have an impact, that’s pretty special. It would have to be some type of job that can still impact people in a positive way.