Power up Featured

8:00pm EDT October 26, 2007
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