If you ask Nicholas DeIuliis about the state of the energy industry these days, he would tell you it’s the nature of the industry that keeps it exciting and evolving.
DeIuliis is president of Consol Energy Inc., a more than $6 billion, publicly owned producer of coal and natural gas and one of the leading diversified energy companies in the U.S. He and Consol have been focused on new technologies, new energies and, above all else, keeping Consol one of the leading producers in its region.
“Energy has always been a big issue within our regional economy, national economy and now the global economy within the last number of years,” DeIuliis says. “Consol Energy still looks upon those tried and true forms of energy, but what’s really changed in the last number of years is how we’ve evolved in deploying technology in both the coal and natural gas side.”
As the industry continues to push forward, the success of companies such as Consol depend upon its ability to keep employees safe, effectively communicating and remaining innovative.
“The most important thing we do is we establish what our values are and we literally numerate them for our teams,” DeIuliis says. “We say what our top values are and which is first, second and third. For us, No. 1 is safety. Second is compliance. And third is continuous improvement and taking a long-term view.”
Here is how DeIuliis is helping to drive those values at Consol Energy that, in turn, help drive the company.
In the energy industry, there are all kinds of dangers that employees face while on the job. DeIuliis and his team take great pride in running a company that focuses on keeping its workforce safe.
“Safety has always been something that is critical to us throughout our history, and we’ve been around for about 150 years,” DeIuliis says. “So we’ve learned what works very well and also learned the hard way through those 150 years what doesn’t work very well when it comes to safety.”
DeIuliis wants to take the challenge of safety and turn it into an opportunity, which sounds simple, but it’s often very challenging.
“We first started with the philosophy of safety itself,” he says. “What is our culture going to be when it comes to safety? Is it truly going to be our top value that will not change during market swings? A value is something that is constant. So first and foremost, that is our most important top value.
“Secondly, if it’s our top value, what’s the expectation going to be? Are accidents part of the business of extracting natural gas or coal resources, or can we truly take an approach of zero accidents of any kind across the entire employee base as the expected outcome and expected goal?”
Consol has taken the latter approach and created an absolute zero program that says the only acceptable standard of performance is no accidents to the employees on any given day across the entire company.
“Anything that’s an accident no matter how small or slight is an exception to that rule and a violation to that philosophy,” he says. “So you have that philosophical change that needed to occur to turn a challenge into opportunity, and over the last three or four years, it has turned and evolved into the culture and philosophy.”
Now DeIuliis and Consol have to find the ways to further improve the company’s safety outlook.
“What are the tactical things we’re going to do to improve our performance?” he says. “How are we going to bring the science and technology to the table to get smarter about risk identification, hazardous mitigation and overall employee training? All of those things lead you to a better place on safety performance.”
Communication is king
In conjunction with safety performance, how well Consol Energy communicates its message relates to how easily and effectively it can improve the organization.
“Communication is the lifeblood of taking a concept or an opportunity and making it a reality,” DeIuliis says.
Consol Energy has nearly 10,000 employees and 6,000 to 8,000 contractors on top of that. So communication throughout the organization is critically important to furthering a concept, philosophy, a new technology or standard, and whether or not that comes to fruition — and when it comes to fruition.
“Sometimes the when part is just as challenging and just as important as whether or not it actually comes to fruition,” he says. “You can’t overemphasize the importance of communication, especially in a complex and large organization or a complex and large world such as what we’ve seen in the energy space throughout the U.S. and the globe.”
Saying that your company communicates is easy, but actually getting results from your communication is much more difficult. You have to utilize multiple communication tactics.
“We use what we call a portfolio approach to communication,” DeIuliis says. “We don’t put all our eggs in one basket, one means or one method of communication. We will utilize a range of those like you would in an investment portfolio.”
Consol uses everything from closed-circuit TVs that update employees on safety procedures, initiatives, technological breakthroughs, compliance issues and regulatory issues to training programs to make sure that employees are engaged.
“We look at that as an investment in communication that is going to get that know-how rate of return, which will be very good, not just for the shareholders of the company and stakeholders but, most importantly, for the employees themselves, because they will be in a more safe and compliant place,” he says.
“There’s a whole range of different communication tools that we use … that will put us in a better position to succeed in that communication challenge and opportunity.”
In order for communication to be most effective, especially in a company the size of Consol, there has to be someone who has ownership of the messages being spread throughout the business.
“The communication approach goes back to the messaging and the content of what you’re saying,” he says. “The ownership is across the entire company. In reality, it extends beyond the employees within the company. It extends to our partners and other stakeholders that touch or deal with the company in some, way, shape or form. It might be the customers downstream that we’re selling the coal and natural gas to; it could be our contractor partners providing services at our rig sites and coal mines or anyone in between.”
While everyone owns a part of the communication process, it’s also critically important that that communication process and the messaging behind the communication are viewed as owned by action, not just by words with the leadership of the company.
“The leadership of the company for us means many different people, not just our CEO and chairman,” DeIuliis says. “It’s our CEO and chairman all the way down to the mine foreman, all the way down to the employee working on the barge line or all the way down to someone standing on one of our rigs right now.
“It’s a group effort and everybody has a role and a responsibility. Your actions have to be consistent with what you’re saying.”
Just as important as safety and communication are within the energy industry, so too is the need to remain innovative. Recent substantial growth in natural gas drilling and advancements in clean coal technology are two areas driving energy these days.
DeIuliis and Consol look inside and outside the industry in order to bring the best innovation to the forefront of the company’s operations.
“There are two broad groups I look to over time for help and insight,” DeIuliis says. “One is the management team that we work with and around. They’re the best and brightest in the industry. Getting that comfort level and that trust level with the exchange of ideas and thoughts as time goes on is the lifeblood of any successful organization.”
The other broad group DeIuliis looks at is almost the mirror image of his leadership team. He looks toward entities and individuals with insights and experiences outside the industries Consol works within.
“It’s amazing how many already established processes, technologies and concepts are out there in entirely different industries that are being viewed as innovations and ground-breakers with the coal, natural gas and fossil fuel industry that we operate in,” he says.
“Every time we tend to look outside our box and outside our industries, we always come away with an injection of innovation that keeps us going.”
As the world of business and that of energy continue to evolve and change as time goes on, the success of a company comes back to its values.
“In the energy industry, we’ve seen a lot of volatility and a lot of peaks and cycles through the years,” DeIuliis says. “We’ve become used to a certain extent of the things that will enviably occur. But if you go back to the values, and those that are truly the values of your organization, and if you’re the safest and most compliant operator in that environment, you’re going to be the most successful or profitable whether it’s a market peak or trough.”
The key to managing through those kinds of ups and downs has been simplicity.
“The way we manage in those downturns is sticking to those values and as long as we’re pushing for better safety performance, compliance and continuous improvement, we will be fine in any market,” he says.
How to reach: Consol Energy Inc., (724) 485-4000 or www.consolenergy.com
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The DeIuliis File
Consol Energy Inc.
Education: Graduated with a chemical engineering degree from Penn State. He received a master’s degree in business administration and a juris doctorate from Duquesne University.
Career: DeIuliis began his career in Consol Energy’s research and development group in 1990. He became vice president of strategic planning responsible for optimizing the value of Consol Energy’s assets resulting in the creation of CNX Gas Corporation, where he served as president and CEO from its 2005 inception until early 2009. He has been the president of Consol Energy since February 2011.
DeIuliis is also director at-large of the board of directors of the Independent Petroleum Association of America, a director of the U.S. Chamber of Commerce and the Bituminous Coal Operators’ Association Inc.
Regionally, he is on the advisory boards of the University of Pittsburgh Cancer Institute, the Pittsburgh Penguins Foundation and the Catholic Foundation. He is a registered professional engineer in the Commonwealth of Pennsylvania and a member of the Pennsylvania Bar.
The U.S. economy has been volatile to say the least in the past few years, and tumult in markets across the globe is chipping away at companies’ already shaky confidence, which has stalled hiring.
However, some industries are seeing orders or requests for service start to increase, which requires companies in these fields to try to keep up with demand using a pared-down work force. That’s where staffing agencies have been able to lend a hand.
However, the impending implementation of the Patient Protection and Affordable Care Act is likely to have an impact on workers’ compensation benefits, a program for which many staffing and professional employment organizations take responsibility. While the consequences are uncertain, employers and staffing agencies are taking measures to provide safer workplaces to reduce claims but are otherwise bracing for its potential impact.
Smart Business spoke with Hayden Smith, account executive and consultant with Solid Agency, LLC, about how staffing firms have been faring in this choppy economy.
How has employment been impacted by economic uncertainty?
There have been some positive trends in the staffing industry. Temporary and contract employment has grown 24.8 percent since the beginning of 2012, according to the American Staffing Association. There are certainly many rosy predictions and forecasts for the temporary industry, with the consensus saying good times are ahead for well-operated firms.
Since September 2008, 88 percent of employers have either maintained or increased the size of their nonemployee workforce and ASA reports that temporary and contract staffing employment jumped 24 percent in May.
Further, reports indicate more college-educated professionals and managers have been hired than blue-collar workers in the past years, signaling that contract workers have become the go-to solution for companies across industries.
This comes at a time when only 23 percent of U.S. companies say they plan to add staff in the next six months. That figure is down from the 39 percent of companies that planned on hiring when they were surveyed in April. Clearly, companies are exhibiting caution when it comes to adding costs, such as those incurred when hiring full-time, permanent workers, while the global and U.S. economies stand on shaky ground.
Workers’ compensation is a significant cost often covered by staffing agencies.
How are recent events impacting this program?
Workers’ compensation coverage is the second-largest expense behind payroll for temporary agencies.
When employers use temporary workers, they can avoid the possibility of having workers’ compensation claims made against them as contract workers are covered through the agency’s program. However, the Supreme Court upholding the constitutionality of the Affordable Care Act could impact the current workers’ compensation program. For instance, there is some speculation that frivolous claims made by workers could drop as more are provided health care coverage with which to get treatment, instead of filing a fraudulent workers’ compensation claim. A study that examined the impact of health care reform on workers’ compensation medical care in Massachusetts found that health care reform could reduce workers’ compensation billing volume and costs. However, it’s unclear how the findings will apply across states mandated to abide by the Affordable Care Act.
Additionally, alternative markets available for the temporary industry to secure valid coverage have continued to grow and can offer cost effective, tailored methods other than traditional methods of workers’ compensation.
The temporary agency that does not manage its workers’ compensation very carefully will eventually find out how important this expense is to its bottom line.
How can the number of workers’ compensation claims be reduced for a temporary staffing agency?
While accidents cannot be completely eliminated, several processes and procedures can be used to help reduce the number of accidents and injuries, and possibly stop fraudulent claims.
Implementing a proven best-hiring practices program is first on the list. In depth pre-hire and post-offer questionnaires will help in deciding the type of work for which a temporary employee is capable. A drug-free workplace is another key component but only if the program is well managed by the employer. Also, most states offer premium discounts for drug-free workplace programs.
Another risk-reducing element that every business needs is a formal written safety program. However, this can be difficult for a multi-industry temp agency to provide. A thorough job description from the client employer will aid in the task of understanding risks and managing safety. Additionally, use these job descriptions with the aforementioned post-offer questionnaire, so client employers receiving qualified labor will be more confident using the services of a diligent temp agency.
A managed care organization is another helpful tool of a well-managed workers’ compensation program. When put in place and enforced, these can help reduce the total number of compensable workers’ compensation injuries. However, if a temporary employee is never informed and updated about the procedures of his or her workers’ compensation program, all will be for naught.
Ultimately, providing a safe workplace for employees is the responsibility of the employer. If employees are hurt, regardless of whether they are temporary or permanent, your bottom line could potentially suffer in several ways, including higher workers’ compensation premiums, loss of production and a negative impact on overall employee morale.
Proper planning, efficient management and complete implementation of components available to the staffing industry can help you avoid ‘the ugly’ in the future.
Hayden Smith is an account executive and consultant for Solid Agency, LLC. Reach him at (678) 460-2965 or email@example.com.
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