Energy West: The Next Generation
Utility
Written by Meghan Flynn   
Sunday, 01 June 2008
Energy West: The Next Generation - American Executive - RedCoat Publishing
An entrepreneurial approach to running a utility company enables this natural gas supplier to grow.
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Find good people, give them the resources they need, and then let them do their job—these are simple business tenets, but they have grown Energy West, a Montana-based natural gas utility company with roots reaching back to 1909, into a formidable player on the national scene.

In the last five years or so, a new board of directors and management team has turned the company around, bringing new life and opportunities for growth. Last year, Energy West acquired two companies that expanded its reach into Maine and North Carolina.

Energy West: The Next Generation - American Executive - RedCoat Publishing
Jim Garrett, President and COO
“These are two of the fastest growing markets in the country, and we’re excited to be a part of them,” said Jim Garrett, president and COO.

Only 3% of the homes and businesses in Maine use natural gas, Garrett said, and the facilities Energy West acquired in North Carolina are part of a new growth area for the state. “With oil prices as high as they are, there are incredible opportunities for this company and this industry; we just have to get out and find them,” he said.

Finding good help
The company’s board hears, at every meeting, a report on the company’s marketing efforts. These programs run the gamut but mostly consist of simply talking to people. Garrett praised the company’s marketing leader in Maine, who generated so much interest that Energy West needed to beef up its operations team and install more pipelines after just a few months.

“In my experience,” said Garrett, “the one common denominator for success is good people. Every company needs people who have a positive, hardworking attitude and who aren’t afraid to ask questions or make mistakes.”

He said out of all the decisions Energy West makes each day, its hiring decisions are the most important. Aside from candidates with a good attitude, Garrett emphasized well-rounded experience versus narrow expertise. But because of the company’s size, Garrett was at first concerned that it would not be able to attract this kind of employee or generate enough capital to allow Energy West employees to do their jobs. But the company’s small size turned out to be an asset.

“We are attracting people from larger energy companies who haven’t had the opportunity to run a business, which is what we ask of them here,” he explained. “With us, they might be in charge of a smaller group of people, but in some cases they get to manage an entire company and venture outside a narrow field of expertise.”

The broad geographic scope of Energy West makes having capable people in charge especially important, but Garrett said the long distances between offices doesn’t mean the company operates differently from a utility that serves only one state.

“This is 2008—there are so many tools we can use to communicate in real time across the country. I visit each location probably once a quarter, but that’s no more than I would be if the location was 100 miles from me; if I need to be there more often than that, clearly the wrong person is running that office.”

A new model
Once the right people are in place, the next task is generating capital to provide the resources the company needs. So far, that has not been an issue, Garrett reported. He said that the best strategy for attracting capital is simply to do a good job keeping customers and shareholders happy. He attributes Energy West’s success in that to the unique balance between utility know-how and entrepreneurial attitude, which affords the company more flexibility.

Garrett explained that Richard Osborne, chairman of the board, is an entrepreneur himself. He brought in board members and executives with not only experience in utilities and energy, but also an entrepreneurial mindset and diverse backgrounds. The board is very active and has a hands-on role in the strategic management of the company, according to Garrett, but so far that has been beneficial rather than problematic.

“The mix gives us a great opportunity to hear different sides of an issue. Board meetings generate a lot of discussion, and not everyone always agrees, but that’s healthy,” said Garrett. “Integrating the traditional utility mindset with an entrepreneurial one is challenging, but we have a good balance here.”

As the company grows, centralization of its operations is inevitable, but Garrett said the board and management are already planning how to balance the need for more efficiency with the culture of a small company. While things like accounting and IT are already operating from a corporate headquarters, marketing is an example of something the company will never take over from local companies.

“The people up in Maine know what’s going on and how to market better than me in my office here in Ohio or the people back in Montana,” Garret explained.

A traditional business mindset governs Energy West, but it is pioneering a new approach to delivering natural gas to homes and businesses. Its balance of centralized efficiency and entrepreneurial attitude may be what the utility industry needs to survive in a tumultuous time. 
 
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