What is leadership?
Richard Stavros is Fortnightly's Executive Editor.
What is leadership?
This question becomes more pressing in an evermore uncertain and volatile world. The late famed economist John Kenneth Galbraith once opined, “All of the great leaders have had one characteristic in common: It was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
Utilities must confront a myriad of major anxieties today, such as skyrocketing commodity prices, the possibility of tougher environmental restrictions related to global warming, and the prospect of rising interest rates and lower valuations (see “ Interest Rates Strike Back ”).
As if that weren’t enough, the industry must undertake multi-billion-dollar building programs to meet future demand without fully knowing whether such power-plant technology choices will bear out as the least-cost option (given uncertain fuel prices and environmental policy).
More specifically, utility executives will have to choose whether to take on the financial risk of building more nuclear plants, and the environmental risk of more coal plants. Will they build gas-fired plants on the hope of more liquefied natural gas exports (LNG) coming from overseas? Will they have to contemplate merger options with utilities a few states away in hope of better economies of scale?
The not-so-easy answers to these critical questions will change the industry forever. True leadership will be needed. But just how are utility executives defining leadership for themselves and for their organizations?
That is the central question that underpins this year’s Ultimate CEO issue.
Public Utilities Fortnightly has endeavored to find those leaders who are confronting the major issues of our industry, and who have extraordinary insights into the nature of leadership. We chose five CEOs among the industry’s brightest stars:
David L. Sokol, CEO, MidAmerican Energy Holdings Co.
Peter A. Darbee, CEO, PG&E Corp.
Jeff Sterba, CEO, PNM Resources
Peggy Fowler, CEO, Portland General Electric
J. Wayne Leonard, CEO, Entergy
These leaders have guided their companies through unprecedented changes, and have been triumphant in the face of adversity. Who can forget hurricanes Katrina and Rita, and the way Entergy faced them with honor and courage? Our discussion with J. Wayne Leonard , CEO of Entergy, is a profile of a man and a company still facing a great many challenges as a result of last year’s catastrophe.
MidAmerican Energy Holdings Co.’s David L. Sokol this year exemplified the type of skills that a modern utility executive will need to communicate any company’s value proposition. His effectiveness in completing a merger with PacifiCorp in record time showed how true leadership communicates value to regulators and investors. Peggy Fowler , CEO of Portland General Electric, has walked a long road to independence. In April, Portland General Electric once again became an investor-owned utility. True leadership on Fowler’s part allowed her to pry free of the Enron bankruptcy and numerous acquisition attempts, and to fight back a municipalization effort in her state. Some now consider her the foremost authority on utility mergers in the country.
Also in the West, Peter