Guest editorial: Excellence in Vermont
It’s news of the “soft” sort when a company is recognized for its excellence. The story has a life span measured in nanoseconds and the distinction is normally formalized with a plaque that quickly begins to gather dust. The award and a buck will still buy a cup of coffee.
But at a time when the public has a profound distrust of its corporations, it’s a mistake to ignore the lessons of those who do it right. And the news shouldn’t be treated as the usual pabulum from the corporation’s public relations office. It’s a best practices opportunity that, if seized, helps others, which, perhaps, could help restore our trust. A good thing, these days.
That opportunity exists with the recent announcement by Forbes Magazine that Central Vermont Public Service was distinguished as one the nation’s “most trustworthy small-cap companies.” There were 100. Two companies scored a perfect 100. Four companies scored a near-perfect 99. CVPS was ranked fourth overall with a 99.
That’s outstanding. Forbes made a point of focusing on companies that met stringent tests posed for complete transparency and trustworthiness. The magazine hired an independent auditor that dug beneath the income statements and balance sheets to look for companies with the best management practices.
The distinction for CVPS recognizes the company in the present tense. Obviously. But for Vermonters, and for informational purposes, it’s a story that has roots deeper than the Forbes’ analysts could ever know. CVPS has not always been a good corporate model.
As recently as the mid-1990s, CVPS was about as hidebound as a company could get. They were the utility. Their rates and profitability were assumed to be guaranteed, regardless of practice. It was an arrogant place, and customers were an afterthought. It was bloated and inefficient, laden with a 790-person culture that supported such.
It was the antithesis of what’s necessary to survive in today’s quickly changing corporate environment. But change comes hard, and it has to come from the top.
A good share of the credit accrues to Bob Young, the utility’s CEO. He assumed responsibility in 1996 and began a crusade based on three simple precepts: Be smart enough to do what’s best for the customer, have your word be trusted, and be crystal clear and transparent in all communication. Simple to say, hard to do.
Think about it, had the financial behemoths of Wall Street followed those three rules would we not have avoided much of the calamity that bedevils us still?
It’s been anything but easy for CVPS and Mr. Young. The utility had been driven to the edge of bankruptcy. State regulators made it clear that a merger with other utilities would be an improvement. And it was a Herculean struggle to transform a culture resistant to change, into a culture focused on efficiency, opportunity and customer service.
The result is moving from a 790-person operation to one that employs 530 today. That’s a 32.9 percent cut in payroll and the quintessential definition of doing more with less … This change of culture has empowered employees from the top to the bottom, which has allowed them to maximize their efficiencies. When slammed with storms and widespread outages, they have been able to restore services in about half the time required in times prior. That’s taking care of customers.
The company has also been noted for its transparency and clear communication. They don’t sugarcoat the bad news. They tell it like it us. That’s how you build trust.
And part of the Forbes’ investigation considered how the company’s top echelon rewarded itself – a point of contention with the masses, which has grown nauseous with outrageous compensation packages for CEOs. CVPS practice is to reward long-term performance, not short-term. It has a 17-point customer service plan schedule that must be considered in deciding any compensatory rewards. In a word, its approach to CEO compensation is modest and based on performance.
And its that modest approach that has a sense of humility at its base. The arrogance that once typified the corporation has been replaced with the sort of humility that recognizes the complexity of today’s world, and the fact that all steps forward have their weaknesses, and that a successful company needs to be nimble enough and humble enough to recognize the value of failure, and the unending opportunity that comes with continual course correction.
The 800-pound gorilla of CVPS’s past could not do that. The reinvention of CVPS under Mr. Young and his 530 employees can. If Forbes had understood the utility’s past, perhaps the extra credit would have been worth that single point that separates them from being almost perfect, to perfect.
There’s next year.
St. Albans Messenger