On a nuclear submarine, decisions come quickly, and it was in the intense environment of a U.S. Navy submarine that nuclear reactor operator Guy Morgan learned to make decisions under pressure.
Now, as founder and CEO of BlueStar Energy Services Inc., Morgan’s decisions have helped propel the retail electricity supplier to huge growth, from 2003 revenue of $1.5 million to 2007 revenue of $171 million. And he’s not done yet. With the help of his 76 employees, he’s anticipating 2008 revenue of about $200 million.
“For me now, it’s tweaking,” he says. “It’s not trying to make big changes to the model that we’ve built. It’s been successful thus far, so we try to stay the course we’re on.”
Smart Business spoke with Morgan about how to face the changing tides and sail through growth.
Keep your financial footing. The challenges we face as we grow tend to be financial in nature. The biggest challenge is getting started. Talk to as many financial institutions of varying types as you can until you find the one that fits your needs.
The key is persistence, not letting the first 20 ‘no’s’ make you think you’re not going to be able to do it. A lot of people told us all the things that we couldn’t do. When I said I wanted to start an electric company in the extra bedroom of my apartment on the North Side of Chicago, those people said, ‘You’re crazy.’ Whether it’s family or banks or potential investors or partners, there are always going to be those people that say you just can’t do it.
Getting ahead of yourself is easy to do. When you grow fast and there’s a lot of money coming in all of a sudden, it’s easy to spend that money. We had the opportunity to go to different states to buy more power, to do things that in retrospect would have been very irresponsible. But we didn’t. We maintained a financial discipline and controlled the expense side of the equation, even with the rapid growth.
I don’t have [financial discipline]. I hire people around me that have it, and I rely on them to check me. Recognize your strengths and your weaknesses. Where you’re weak, if you’re honest about it, you can find people to balance that.
Build a chameleon company. If you initiate change, it’s pretty easy to manage because you plan for how you’re going to manage that change. The other type of change is change that happens outside of the company, whether it’s a regulatory change or market change. How do you manage that? You have to react to it. You try to build the organization to be as flexible as possible. The way you do that is primarily with people who are good with dealing with change.
You look for people who are self-directed. If they don’t need a manager to hold their hand through a process, then your organization is better suited to deal with change. Whatever their job is, you give them decision-making authority for things that you feel comfortable, on an individual basis, giving them authority to do. You empower people to their capabilities and their comfort levels. The more people that are empowered to deal with those changes, the better off you are.
One-up the competition. You look at the competitive landscape and see who’s already there. The way we succeed is emulating companies that have been successful in that insurgent role: the Southwest Airlines, the Apple computer. Try to upset the apple cart by doing things a little bit differently.
When I looked at the energy business, I didn’t say, ‘I’m going to get to be the same size as Exelon Energy in a few years. I’m going to emulate their style of management.’ That would be unrealistic. Characteristics of leadership that drive that company are different.
I looked at the energy business the same way somebody like Steve Jobs looked at Microsoft. These guys looked at the environment, and they said, ‘Who’s there, and how do we do it differently and better?’
It starts with your approach to customer service. You pick up any utility rate book, you’ll very rarely, if ever, see the word ‘customer’ in those books. It’s always ‘rate-payer.’ There’s this long-standing sense of entitlement. It’s not a very high bar to meet, frankly. You just have to treat the customer like a customer.
You do it one or two customers at a time. First, you answer the phone when they call. From there, it’s being respectful, answering questions that are asked, addressing concerns or problems quickly.
Look outside the box for opportunities. About a year ago, we started a different business that deals with energy efficiency. We not only sell electricity to these companies, but we help them reduce their usage.
It’s kind of counterintuitive for an energy company that’s selling electricity to help their customers reduce it. It allowed us to better understand their facility and how they were using electricity.
It doesn’t only have to be good for the customer. It’s got to be good for business. If it’s not going to generate revenue and earnings, then it’s quickly discarded as an opportunity. The other component that goes into that decision-making is how far it strays from the core of the business. We wouldn’t identify, for instance, telephones as a viable opportunity, even if it makes sense from the financial standpoint.
HOW TO REACH: BlueStar Energy Services Inc., (866) 258-3782 or www.bluestarenergy.com