TECO’s CEO retired early, in mid 2004, and Hudson was the board’s first choice for a replacement. He accepted and wasted no time developing a plan to revive the Tampa-based energy-related holding company, which had lost its focus a scary thing for a $3 billion company with more than 900,000 customers.
“In 2005, the company was recovering from some significant changes and difficult financial times that challenged our team,” says Hudson, who serves as chairman and CEO. “We were exiting businesses that no longer fit with our strategy, and it became very important for us to communicate who we are today as a company and where we want to be.”
The company had invested in a power generation strategy to take advantage of the opportunities presented by utility deregulation. But that strategy never panned out because deregulation didn’t work out the way anyone expected. TECO Energy posted a net loss of $909 million in fiscal 2003 and $552 million in fiscal 2004, mainly because of that strategy, and as a result, began to exit that market.
Hudson recognized that he needed to redefine the values that would, in turn, redefine the company.
“In this last year-and-a-half, we spent a lot of time coming up with refining our mission and vision statement and our five core values,” he says. “They’re quite basic, but they really speak volumes about who we are, where we see ourselves and then the values we want to be evaluated by.”
Lighting the way
The process began with TECO examining the values it already had in place to decide if any of them were still pertinent to the organization’s five businesses: Tampa Electric, Peoples Gas and TECO Transport in Tampa, TECO Coal in Kentucky and TECO Guatemala.
The leadership looked to see how those values could improved upon, then explored what else the company wanted to say about itself.
“This is not something totally new; this is just really a refinement,” says Hudson. “Two of them safety and integrity have long been hallmarks of our culture. With our return to a focus on our five core businesses, it was time to restate those as central to TECO Energy and underscore them.
“The other three respect for others, achievement with a sense of urgency and customer service are things we wanted to add to our list as being critical to the type of company we want to be. ... We just did some real meaningful thinking, and updated what was in place and really brought it all into a cohesive document that everybody really feels comfortable about and can buy into.”
But before the values were instated, they were passed by many eyes. Hudson knew that to succeed, he needed the involvement of all employees, not just senior management.
“This is an art, not a science,” he says. “It’s one of those things that there’s not a right or wrong answer.”
Corporate officers shared the values with their direct reports, including company presidents, who shared them with their teams through department meetings and focus groups. In all cases, individuals were to find out what people thought of the statements, if resistance was anticipated and how to best deploy them through the organization.
“One of the things we talk about a lot is we’re a company where people want to work, and if you’re going to be that kind of company, people have to really feel that they are owners of the business,” says Hudson. “To be owners, that means they need to be involved in any of the key factors that are involved in the company. There’s really nothing more important than enunciating our purpose, our vision and our core values.”
TECO also looked to other companies for guidance, in both what to do and what not to do.
“There’s an awful lot of companies that have very fancy purpose, vision, whatever you want to call it, and values,” says Hudson. “But unfortunately, that’s what they are they’re on the shelf, they’re there on the Web site and they’re not in the hearts and souls of all the people. And our goal was ... we want our people to really understand this, and we want them to live it every day.”
It took six months to develop and implement the new core values, but once they were defined, the company had to communicate and integrate them throughout TECO’s five core businesses.
Powering the plan
TECO’s leadership felt the first step toward integration was to explain the ‘why’ behind the new values. People had to understand how the new mission of the company would positively affect them before they would embrace the change.
“You must explain the goals and objectives of the change openly at the start of any new initiative that will impact a team,” says Hudson. “That decreases resistance at the outset. And to march together in a forward direction, you have to continually communicate about the need for the change and highlight progress toward your goals.”
It turned out there was no resistance at all, says Hudson, as employees saw the potential benefits of the changes. But Hudson recognized that it might be easy for them to forget about the values once the initial excitement of the change wore off, so the company committed to making them part of everyday operations.
For the mission and values to make a difference, Hudson knows they have to be talked about often and they have to be visible. The company even had table tents made that exhibit the company’s purpose, vision and values made for people to put on their desks, and they are prominently on display throughout the company’s facilities.
Realizing that 40 percent of employees are not regularly on the Internet, the company also publishes a monthly newsmagazine featuring stories that show how at least one of the company’s values was demonstrated in action, or how it translates to someone’s role in the company.
The company’s officers also go out and frequently speak to people about the work they are doing, building the values into their remarks and referencing them in conversations.
“There is no such thing as overcommunicating,” says Hudson. “We absolutely must lead by example. I expect that each person in a leadership role in TECO Energy to reflect the values each and every day in their actions. That’s what keeps the values from being words on a page.”
TECO also gives its employees a powerful tool to judge if the values are working. Last year the company reinstated an employee survey.
“The reason we do it is it’s an absolute yard stick,” he says. “It’ll be our report card as to how we’re doing in the eyes of our people.”
It provides an honest picture of where the company still needs to make improvements, whether it’s with one of its core values or another issue. But more important, the company actually makes changes based on the results.
“We have meetings after the survey results are out to talk about them and to demonstrate to people that we really are serious (about) what they tell us,” says Hudson.
Based on survey answers, each department is given its individual top 10 items the things it does well or employees appreciate and its bottom 10 items areas that employees think need improvement. Each department is then responsible for developing action plans to address the bottom 10 issues and improve them.
“We either do the things they think we should do, or we explain to them why we can’t,” says Hudson. “You can’t always do what all your people want, but you can always give them a good, basic answer as to what’s happening.
“People have to feel that they are important, that they are needed, that they are appreciated, and that they have input and that they are listened to when the input comes,” says Hudson.
One change that came out of the surveys was major improvements to the company’s customer service operations. Employees had made it clear that they wanted to see more money invested into the company, specifically Tampa Electric, to better serve customers especially since better serving customers is one of the new core values.
Tampa Electric installed software to track calls and used this data to determine call patterns and volumes. As a result, it upgraded its automated voice response system to eliminate busy signals, added a line for customers to get an estimated time for restoration of power and installed an outbound dialer system that calls customers whose power should have been restored and encourages them to call back if this is not the case.
As a result, for 2006, 90 percent of calls are answered in 30 seconds or less, compared to 2005, when 80 percent of calls were answered in 60 seconds or less.
Also, less than 0.5 percent of callers receive a busy signal when they call, compared to 18 percent or more in 2005. The company also says that 98 percent of callers have their issues resolved with one call.
Never one to dictate policy from afar, Hudson also makes himself personally accessible to employees. Almost weekly, he takes eight to 10 employees from all levels of the company out to lunch. It’s their opportunity to ask questions and share concerns in a confidential setting.
“We just have an hour to two-hour lunch and talk about anything in the world they want to talk about that’s going on in the company,” he says. “Any recurring themes that come up in that, we look at it and we address those and are responsive to it. So hopefully that will be taking care of things on a continual basis, in addition to really our intense focus once a year when we get the results of our employee survey.”
While the company has made great strides in a short period of time it posted net income of $275 million in fiscal 2005, compared to a net loss of $552 million in 2004 Hudson knows it will take constant attention and refinement to keep TECO on the path of success. And as its leader, he will continue to implement processes that will enforce the core values and new identity and lead the company to operational excellence.
“You don’t get there and then sit down and say, ‘Well I’ve got there, now I can rest,’” says Hudson. “It’s something you have to work at every day.”
HOW TO REACH: TECO Energy Inc., www.tecoenergy.com