Clinton Bonner: We want to help you with your most critical roadmap problems. And a utility exec might be like, well, the heck you gonna. (Laughs)
Bryan Kearney: That's great.
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Clinton: Welcome to Catalyst, the Launch by NTT Data podcast. Catalyst is an ongoing discussion for digital leaders dissatisfied with the status quo and yet optimistic about what's possible through smart technology and great people. Be sure to subscribe in your audio feed and help spread the word on these worthy conversations. Joining us today is Bryan Kearney, a technology executive and electric utility subject matter expert. Bryan has decades of leadership experience in utilities, spanning work across the United States that most recently found him as the Vice President and Chief Information Officer at Arizona Public Service, APS, where he led a team of over 520 FTEs and technology partners. We're going to dive deep into the culture and challenges in the electric utility space, and we'll talk about the opportunities and new technologies driving next-gen experiences for consumers here on Catalyst. Let's welcome Bryan to the studio for the very first time. Bryan, how are you doing today, man?
Bryan: I'm doing good. Thank you for the intro, Clint. Very flattering. And thanks for the invitation. This sounds like this could be a fun session.
Clinton: I think it will be. And I always love it when people have got a good LinkedIn profile that... it's right there for you. So, thank you for serving it up. And now, that's just a bit of a tease. So why don't you tell the audience a bit of your professional background, your experience, and maybe a bit of how we got to now?
Bryan: Okay. After leaving college, I joined the United States Marine Corps as a commissioned officer and served with the Marines for just a little under eight years. Resigned my commission at the rank of Captain. And most of the time I was in the Marine Corps, I was involved in technology, doing command and control tactical data systems out in the field. After leaving the Marines, I did about a decade of public service with some local governments, two counties in the state of California, and also served as the IT leader of the city of Fort Worth, Texas, during the early '90s. So about a decade of civil service. And then I left there and went to a company in Oregon. You guys may know it as Harry & David, it's really the Bear Creek Corporation. And, and worked with the Fruit of the Month folks, serving as their chief technology officer. Great opportunity.
Clinton: That's fun.
Bryan: Fantastic place, fantastic company. Leading edge technology all the way through. I then got involved with utilities. And I did my first true stint with a smaller utility up in Boise, Idaho. The Idaho Power Company. And I served both as the CIO for Idaho Power and for their holding company, Idacorp. And we had several subsidiaries that were under the auspice of Idacorp. We had an ISP, we had a financial arm, we had a development arm, we had affordable housing projects in most of the states of the United States. And did a, seven or eight years with Idaho Power, and then found myself working in Carmel, Indiana, with an organization called the Midwest Independent System Operators, better known in the utility ranks as MISO. And Miso is an ISO, an Independent System Operator that serves, I think at last count it was about 28 states, 27 states throughout the Midwest and the Canadian province of Manitoba. Managing what, at the time, was the largest wholesale electricity market in the entire world, and obviously handling 150,000 miles of transmission assets as well. And then somehow wound up back in a pure play utility out here in Phoenix, Arizona, where I spent the last couple of years serving as the vice president and CIO for APS, Arizona Public Service. I retired four or five years ago and have been doing my own little consulting throughout North America, trying to stay engaged, informed, and involved within the electric utility sector. A couple of years ago, picked up work, kind of a strange story all in itself, working with a small software company. Well, small, relatively speaking, named Nexient, and got involved with them, they reached out to me to see if I could help them with getting them a little more traction within the utility vertical. So that's a quick background.
Clinton: Yeah, know it. Well, there's a lot of places to go there, too, just for the interest of the story. And, first and foremost, thank you for the years of service as a Marine. That's, that's always...
Bryan: My pleasure.
Clinton: ...amazing to hear about. And you've been around this country quite a bit. So I gotta ask, you know, there's people out there that live in a region or two. You've really been around it quite a bit. Do you have a favorite spot in the country, either a favorite city or just a favorite, like, area that just kind of spoke to you to the most with the time you spent there?
Bryan: Well, being a person that can hold a job, you're you're exactly right, I've been around quite a few places.
Bryan: We currently live in Scottsdale, Arizona, which is beautiful, about 9, 10 months out of the year, but scorching hot in the middle of the summer. But if I had one place to pick, I think our favorite place, both for my family and the schools and just everything involved, was Boise, Idaho. Now, that was back in the early 2000 when, you know, the population was much smaller.
Bryan: I'm told Boise has changed quite a bit. But the weather in Boise, the outdoor activities, I think the state of Idaho is just an unknown treasure for our country.
Clinton: Yeah. So I recently took a trip out to Montana, and we drove through western Montana and then northern Idaho, and I was just absolutely gobsmacked with the beauty of that country. It was... Between the lakes and mountains and, just, valleys and just... And like you said, though, there were lots of cranes. You know, there were especially when you hit Idaho and some of those lakes and rivers, there was a lot of growth around there. But I get it, you know, I get the why. Really beautiful country, and that was really cool to see. It was my first time, first time through that area, which is super cool. And you mentioned the origin with Nexient. Nexient was acquired by NTT Data, and then it became part of what's now Launch by NTT Data, which I work for, and we do this podcast from the seed of Launch by NTT Data. So, Nexient reaches out to you because of your expertise, and they want to establish a little bit more authority and understanding, really, of how to approach leaders in the utility space. So you get that going with anybody in particular? Like, how long ago did that start with the Nexient work?
Bryan: Well, it was a kind of a fluke meeting. I actually met the father of one of Nexient's senior account executives, his name is Alec Zeidler. His father lives in my neighborhood, and I can't even remember all the details, but somehow Alec and I got into a conversation, and didn't really know what the conversation, where he was going with it. He finally got down to, he asked me if I'd be interested in helping them make some contacts throughout North America for utility executives. At the time, they'd had some major utility accounts. They'd had Detroit, DTE. They had PG&E, they had Sempra, and they had some other interests in the state of California. So they had a good foothold, but they... they really were genuinely interested in understanding more of the culture, more of the challenges, the business and what drives the entire utility sector. Obviously I kind of represent the electric side, a little bit of gas, but mostly the electric side. And they were very interested in, not for me to do any of the sales work for them, but rather to help them reach some utility executives. And how they were approaching other companies in other sectors didn't seem to be working as well for them in the utility space, and they were wondering if they were doing something different or something wrong. And so, you know, we started off the relationship in that manner. And it's been a very, for me, a very fulfilling opportunity. I get to talk and chat with some former colleagues, some former friends, and meet new people all across North America within the electric utility sector. It's been a good exchange.
Clinton: Yeah. And I know Alec personally, a very good dude. I didn't realize that was the actual origin story of how you got to Alec, or how Alec got to you, but very cool. And you mentioned that there was a, an understanding or maybe even a realization that, hey, what we're saying to other industries is landing more effectively, or flip that, what we're saying to utility executives is landing with less efficacy than it's landing elsewhere. And there was probably some a-has and just underst... like, things that you could bring to the table, I'm sure.
Clinton: So as we start to discuss the utility sector in general, what are some of those cultural values, the priorities, the things that make up the DNA and fabric of utility that do make it unique?
Bryan: Well, you're right. How they were approaching other executives in other sectors seemed to have a higher success rate. There was more willingness to actually meet with CIOs and other business decisionmakers. And utility sector was just really slow to interact with Nexient. Obviously then Nexient got absorbed by NTT Data, and Nexient got rolled in with a couple other high tech firms, they were smaller, to make up Launch by NTT Data, this very impactful group. I would say the total FTE account for this group within NTT is about a thousand people. But they're fast-moving, they're hard-hitting, and they're very effective. But before the acquisition by NTT, I spent a good bit of time with leadership of Nexient. I also went through their new employee orientation. I wanted to know what it was like to be a Nexient employee, I wanted to know their culture, their company, their business processes, their way of doing things, before I got too fully involved with them. Because if I was going to reach out on their behalf, I wanted to make sure I was being genuine with, too... you know, again, my former colleagues and peers across the industry. So I spent a lot of time getting to know them. And then got to know each of the account executives. They have the North American broken into five regions. And so I got to know the folks inside of each of those five regions and set up a little bit of a repertoire as to how we go about making, making connections. And it went pretty good. Again, my job was not to make sales, my job was simply to make the connections. You know, to get past the guard dog at the gate, and then see if I can get some people to be interested in doing some, then, Zoom calls. This was obviously at the front end of the Covid period.
And so, there wasn't a lot of in-person work. A little bit, but not very much of that. It was mostly all done over Zoom or Microsoft Teams. And it went pretty good. After I did the orientation and got to know Nexient a little better, I then spent some time with them to teach them a little bit about the utility sector itself. What drives them, how their business operates, the different classes of utilities, be it an investor-owned, a vertically integrated utility, be it a pure play genco or generation company, or transmission company, an ISO or an RTO or a muni or a co-op, there's different classes of utilities. And so we worked on trying to understand what those are. And then I tried to boil down... and this is always dangerous to do, I try to boil down some generic cultural aspects of utilities, what their priorities are, and then what some of the trends or what some of the things that they're dealing with. And that's always difficult to do or dangerous to do, because it's kind of typecasting them a little bit. And there's always going to be exceptions to some of the things that, you know, that I noticed. But if you give me a few minutes, Clint, I'll unpack. Let's begin with the culture.
Clinton: Sure. Yeah.
Bryan: And so, I'll unpack that a little bit and just hit the top couple. When I talk to people about utilities, especially their executives and whatnot, the first word I always think of is that they're very conservative. And I don't mean that from a political sense, but rather... Maybe conservative isn't the right word. Maybe it's risk averse. And you'd say, well, well, why? Well, in a little bit we'll talk about some of their priorities and you'll see why they're risk averse. And there's good reason. Risk averse could also be coined as being very careful, being very measured, being very specific, and probably most importantly, being extremely safe. And again, when I get down to, you know, talking about some of their priorities, you'll see that safety is everything inside of electric utilities, in fact all utilities. But within the electric utility companies, safety is very, very important. And that's very appropriate, you know, because their product will kill you.
Bryan: And the equipment that they work with is large and dangerous if not handled properly. Other things that I, when I think about their culture... They're extremely community-focused. Typically they serve, you know, a large geographical area with a mixture of different types of cultures within their region. And so they're involved. They're in there. They know their customers, they try to get to know them even better, they know the businesses that they serve. They get involved with things like the food banks, they get involved with, you know, housing shelters, youth sports activities. They sponsor a lot of walks, they sponsor a lot of runs. If there's a worthy cause, you know, I can speak for, you know, APS, Arizona Public Service here. If there's a worthy cause to be involved with, you're going to see APS involved with that. And you're going to see APS employees, it's not just a money thing either. It's APS employees. And every utility I've ever been associated with, we're involved, the staff is involved. And it's almost, from a cultural perspective, it's expected of you as an employee. So, you know, to wrap that up a little bit, when you think of it from a cultural perspective, I think that they're very conservative or risk averse, think that safety is always on their mind, and that they want to be community-focused, community involved, good stewards of their assets. When I think of them culturally, that's kind of how I think about them, Clint.
Clinton: Yeah, well, it's almost a little Rockwellian, right? In the sense that it's like, it's hyper-local. They actually want to be embedded in the community. And, at the layer of it all, like, the thing that permeates everything they do, even if you go to the APS website, the first thing on the H1 is, I think it's safety. And then, I think it's like, safety...
Bryan: Oh, absolutely.
Clinton: ...combo with something else. So it's almost like, a bit of a throwback in a way. Like, you said conservative and risk averse and those things. But it's also like, when you blend in the culture, it is a little bit more like, hey, small town. Like, we are, we are here with you. And that, I would imagine, permeates through the people and then also influences culture, influences decision making. And so, what does that mean? If we were to look at, like, how did they get comfortable with outsiders? You know, like, you might be a bit insular by your nature because of that. So how do you get comfortable and understand that, hey, but we do need help, and for that we gotta open up a bit, and also trust as you do it.
Bryan: Wow, you wandered right into it, Clint, I'll tell you. As a culture, especially in IT, we're very cautious to bring in new vendors. We'll look at everything. We'll go to the trade shows. We'll do, we'll have a lot of conversations, but we're very, very cautious. When you combine the electric utility with technologies, mistakes show up at the speed of light. And they happen across the wide geographical area affecting a lot of customers. And again, there's a safety component to that as well. But we're very cautious as... You'll struggle getting in to see an IT executive at a utility company. You'll struggle doing that. And that can be misunderstood. They're that way, and I was that way too. I'll admit I was that way, very much. I was guarded. We're that way, again, because mistakes show up very, very quickly in an extremely unconvenient way, at an extremely inconvenient time. So we work with each other. I made very few major decisions without calling 10 or 12 people with the same job function and saying, this is what I'm thinking, tell me where I'm wrong. What am I missing? What question am I not asking? Or, have you worked with these people? Have you worked with this particular company? For the most part, we don't compete with each other in the electric. Most of them are regulated monopolies, if you will.
Clinton: Yeah, yep.
Bryan: So the competition is not there to where I'm, you know, I'm keeping things close to the vest. We're a very tight community. We share, we have common problems. We get common regulation. We get common, you know, laws that are passed and rules that are passed that we all have to deal with. And so we outreach to each other quite a bit. So, breaking in as a new vendor is difficult to do. You have to go through the process. And, you know, it's like anything else with credibility. You gain it very, very slowly. As a new company. You get credibility, it's by the inch. But when there's a little bit of a problem, you give up that credibility by the mile. And so, that, I think, is one of the things that Nexient was struggling with. Because if that's not understood up front, utilities can seem to be standoffish, or slow, or uninterested, and they're really not. The whole time I have a new vendor talking to me, I'm thinking, okay, what could go wrong with this? How could I get hurt? How could this go? This... My mind is going crazy with all those things. So I'm going to go slow or I'm going to make decisions a little bit slower, and I'm going to involve more people in my thinking. So that's kind of where a new company can struggle, like, getting to know folks inside the electric utilities sector itself. Now, flip side of that: once you get in, once you prove yourself, once you get a little bit of branding going and get familiar, then that can work for you, if you will. And so that... there's both good and bad in that too, because, you know, as a, as a company, you don't want to be taken for granted. You don't want your vendors to be complacent and not give their best and whatnot, so you've gotta, you've gotta work that relationship very, very hard. Getting in is hard. But once you're in, it's a good relationship. Typically.
Clinton: Yeah. I'd love to dive a little bit deeper into the getting in aspect. So, you said you retired from your job a couple of years ago now. And if you were still in that seat, so, what are some of the capabilities, skills and maybe even, like, types of projects that are either lower-risk but can still prove value, so you can get that comfort level? Because there might be that blend of, well, I want to see what they got, but I don't want them on critical path stuff right away. So is there a, a trade-off, and is there a balance to find, to build that credibility, to help each other find that comfort?
Bryan: Well, there is. And you do look for those places that are safer to involve people from the outside. Here's where, you know, for most of my career, where I struggled. And if you think about it, Clint, managing, really, in leadership is a lot about managing scarcity. We don't have enough money, we don't have enough time, we don't have enough people, we don't have enough talent. So you're managing things that are in scarce supply all the time. And so, you have to go outside. You have to involve vendors, you need newer things, you need expertise. And so, the first thing I look for is the appropriateness of using my organic staff, okay? Or using outside staff. Many companies, but particularly in the utility ranks, they're built to operate. We have great operations. We look for that harmony of the wheel on the bus going round and round and no exceptions. And we build and we staff and we get rewarded by the regulators for providing that reliable power, okay? So we're built for that. We're not built to do these large development efforts. We're not built, in most cases, to do large upgrades. We're not built to do science projects, okay? That's not how we're staffed. We dabble in that every once in a while, okay? Every once in a while, you know, if I wandered around enough, I'd find one of my guitar players playing on a piano, and I'd have to say, wait, wait, wait, wait, wait. And you don't want to keep people in a bubble, but you have to, you have to kind of manage who's doing what type of work. And then I'd look for the appropriateness of using folks from the outside. So I don't want to bring on hot shoes, you know, high-skilled talents, as a full time employee if I only have, like, a six-month project for them to work on, and then I've got to do a layoff decision or find something else for them. Rather, what I do is I look for people who bring those skills, you know, that that's their core competency. That may be on a major system implementation or system upgrade, or filling some niche staffing thing that I need on a short-term basis. Now, I've had contractors who, who stayed with me for multi years because of the relationship and because the value add that they brought. But most of the time when I'm doing a large development project, or if I was doing an upgrade or an implementation of sorts, those were the opportunities where I would reach out to the high-tech vendors and go through an RFP process, go through, you know, maybe competitive flyoffs, go through that vetting, to find out which candidates would be the best to bring in on this level of effort. And then I would require, as part of the work being done, a little bit of that cross training. You know, you put some of your organic staff in with the with the vendor staff, and hopefully, through some osmosis, that some transfer of knowledge takes place. And in some cases, that was even a contractual requirement, to make sure that the new tech folks would influence the organic staff, so that when they leave, at the appropriate time, that we're left in good hands, capable of maintaining the... what we've put in place for a nice, smooth operation.
Clinton: It makes a ton of sense. It's reminiscent of some conversations I've had with folks in the healthcare industry. We had a guest on, his name is Paul Hlivko, he's the CTO of Wellmark Blue Cross Blue Shield, and... Now, he actually uses a what he would call, like, a third leg of the stool, where he's got his FTEs, he has his go-to partners, has his technology partners, and then he also he bursts out to crowd platforms to do specific things. So he uses that as, like, an on-demand workforce that he's blended into some of his work streams. The piece that is very similar was your viewpoint on looking for the skill sets that have, you know, those specific things that have a ready, predetermined time horizon. Like, hey, that might be here four to six months, but once that project is done, I don't understand how I can have that person here FTE-wise. So it becomes advantageous to burst out and have that flexibility to find skill sets, bring them in on project work. So I totally understand that. Are there specific examples where you took advantage of that, like, thing, where it's very appropriate, as opposed to having to hire all those for the IT staff, you've got that blend that you needed? And, you know, maybe some examples you can walk us through.
Bryan: Yeah, I would say on some of the larger implementations that we did. You know, I think back to when we did CIS, which is the customer information system, which is one of the, you know, 900-pound gorillas in any major utility company, that and EMS. When I think back upon those projects and staffing for those, again, it was a mixture of the best and the brightest showcasing their products and us selecting one, and then mixing that staff in with organic staff, you know, and coming up with that, that optimal blend of folks. You know, because the vendor coming in doesn't understand the business's processes.
Bryan: And each utility is going to operate a little bit differently than the one, its neighbor, in subtle ways. And so, you know, there has to be a meeting of the mind. All the processes have to be mapped. Well, organic staff is key on doing... and that's not just IT staff, that's people from the business. And then you also have the change management aspect, where you have to culturally change. You know, when I think back to the CIS install we did at APS, the previous system had been in place, in production, for 21 years. There were people in our call center that that's the only system they had known throughout their entire career with APS. We were bringing in something that was, you know, revolutionary for them. So it couldn't just be something where you get the green lights on and everything's fine. The change management aspect of that particular implementation was, was as important as the design work, as important as any other part of it. In fact, probably more important. It went exceedingly well, but it was still, like, very, very difficult. And so we needed experts in each of those disciplines to do the unpacking of the process, to map all those processes. To help us with design, to help us with conversion of our data, to help us with the change management. To help us know... In fact, you know, the QA aspects of those things that help us know whether we're ready to go live, the go/no go decision type of things, all of those I relied on some outside expertise. And again, throughout the whole thing, behind the scenes, I'm also calling people who had gone through a similar experience, other companies that had recently gone through, and saying, what question am I missing? What am I not asking? What do I need to look, you know... So we kept that outreach to our peers to find out, because this had been done before, and we wanted to learn from other people's mistakes. And again, because we're not direct competitors, we typically are very generous with past experiences, lessons learned, things of that nature.
Clinton: Well, I mean, that makes sense because you, of course, respect one another. And you're in each other's shoes in many, many ways. And, you also innately understand the severity, if something were to go wrong. People really understand the table stakes. Certain things, I'm sure there's less risky projects, but the ones that are innately tied to safety, if it's a go/no go, you gotta be really confident... (Laughs)
Bryan: You do.
Clinton: ...as you get that green light and go forward.
Bryan: You know, Clint, we have two big families of applications or systems inside a generic utility company. You have, you have IT that takes care of HR, finance, you know, tax or your IT systems. And then you have OT, okay? Which is all technology-based, or mostly technology-based, but it's the operational technologies. That's your energy management system. That's your distribution system, your OMS, outage management system, or today it's your ADMS, your advanced distribution management system. Those systems are much more risky, they're more difficult. We're slower to change them because the impact to the actual electrical grid itself, they touch it. Okay? Yeah, things are bad when you don't get payroll done. Things are bad when you have problems in HR and things are bad. But it's not like bringing down, you know, the grid. Okay? And I learned that in, particularly, you know, utility companies are one thing, but when I worked for the ISO, the Independent System Operator, MISO, that was very, very real stuff. EMS at MISO is so guarded, so backed up, so, you know, active, active, as far as its capabilities, it can't be down. It cannot fail. So, with that level of thinking, that level of criticality, that mission critical thinking that goes into that, both in the implementation and in the operation and care, feeding and watering of that, there's no running with scissors...
Bryan: ...in that world, everything is checked, double checked, measured many times, and you're always asking the question, what am I not seeing? And you want to be open and available for other people to come in and say, hey, whoa whoa whoa whoa, wait, wait a second, because it's that critical. So those are especially hard opportunities for new vendors to come parachuting in. On the other side, those are a little easier to come in, you know?
Bryan: And then, the space where, then, Nexient offered a lot of opportunity was taking those systems to the next level of service for the staff. Extra reporting that could come out of that, extra, you know, what can we do by building a warehouse for this? You know, that type of work, the add-on type of work. They found a lot of good, a lot of good space in there. That and a lot of integrating those types of systems into data to feed the retail customers out there through mobile devices and through their website. So.
Clinton: Yeah. It's a delicate dance and balance, and, and that partnership of understanding, okay, look, here's the playground. Here are the things in which you can have an impact, whatever the technology vendor may be. Here are the areas in where you can go experiment rapidly with new experiences that can be touching and uses to consumers. And then mobile apps and things like that, that remove friction, provide more data, and through that provide better interfaces and better service, without the risk of something, like you said, actually touching the grid potentially, right? So, so that balance of just finding the space together, because I could understand, years ago, when Alec was saying, hey, we're having a hard time coming in, because I think a traditional vendor might say, hey, we want to help you with your most critical roadmap problems. And a utility exec might be like, well, the heck are you gonna! (Laughs) Like, you know, it's like, hey, there's stuff here, but we're going to move a lot slower, with a lot more, like you said, mission critical, dotting-every-i care. And then again, as the relationship builds and as the relationship matures, the aperture can widen. And then that appetite to do things with a vendor and a partner can become riskier over time, it would seem like, because there's more trust. You've built that up, up, over time.
Clinton: And you're able to, then, just open more things up to the right technology partner that, that can get onto your critical roadmap. But it's an interesting dance there. So we talked quite a bit about the culture, and that was, I think, exceptional stuff for folks to really, really understand it from your purview. Let's flip it over to some of the major pains, the challenges.
Clinton: What is specific in the utility world that faces them, that are big-time obstacles that, you know, others either, a, take for granted, or simply, it just doesn't hit their industry.
Bryan: Well, let me preface the answer to that question with a little bit about what our priorities are. Because those are the main drivers. What are our priorities? Some of them I've already mentioned. Obviously safety. We wrestle with number one and number two, which is safety and reliability. Reliability means the flow of energy for the grid to be operating in a very safe and reliable manner. And you can... Certainly you can understand that the product is very dangerous to work with. And certainly you can understand the product is very, very precious. You know, if you think about electricity, it's ubiquitous. The fabric of what makes up our society. And when we're without it, we just don't function very well. And we have rolling blackout histories in certain areas in the West that... that will validate that, you know, reliability of the grid is paramount. You know, other priorities that they'll have will be operational performance and efficiencies. I mentioned earlier that we really don't compete. We're not, we do have a lot of oversight. We have a lot of people that watch us, the regulators and certainly customers that watch us. But where utilities kind of compete with each other is through the J.D. Power survey. And where we really focus in on is, a couple of the metrics that we look for, is how quickly do we respond to the anomalies, abnormal behaviors, or things within the system itself or within the operation? How quickly do we respond to an outage, and then how quickly can we restore and recover from that particular outage? Those are very key things. There's a lot of other statistics that the Power survey looks at. Obviously, you know, the amount of time that you wait on a phone call if you're calling a call center to report your power's out. There's other attributes that they look at. And we take great pride... Now, they break the surveys down into, you know, geographical areas within the United States or in North America, and then also by size of the company, size of the entity. And there's not an executive team that I know of whose compensation model is not highly driven by the results of that particular survey. And so, we pay attention to those things, very much. So that's kind of interesting. So, operational performance and efficiencies are very high, you know, because that affects cost and the product price or what we call rates, right?
Bryan: And some of these priorities will work hand in hand with each other. Others can work against each other. You know, obviously we want to be efficient. We look for areas where we can be efficient, because that gets cost down. And, you know, one of our priorities is to keep our costs down. But if we overdo on efficiency, or if we overdo on operational performance improvement, if that's not managed, that can lead to increasing costs, and maybe not getting the returns that that cost would warrant. Does that make sense? So, all these priorities have to be managed by the executive team, or they get out of whack a little bit. Other priorities, and this is part of the cultural thing... Our image is extremely important to us, okay? How we're viewed within the community. And in particular, how we're viewed in the regulatory environment. What do our regulators think of us? Because they set the rates. And so, the image, and again, image is one of those things like trust, you gain it very slowly and you give it up very quickly when things go wrong.
Bryan: So, so image is something that's very, very guarded. We work on that. And it's not just the branding piece. It's, your average utility company wants their customers to feel good about them. They're writing us a check every month. So with that comes a lot of responsibility. And obviously the regulators, they're put in place by a number of different mechanisms. Some are elected, some are appointed by other elected officials. They're there to watch over, and to make sure that the utility company's living up to, we call it the regulatory compact. But because we're a regulated monopoly... In normal monopolies, costs can get out of hand, performance can wane. You need pressure, a little bit. Honest pressure. And the regulators provide that. They set the expectations, they set the table as to what the rules and how we're going to operate. And that's healthy for us. And then, kind of the last... you touched on it a little bit with your example from the Midwest and the insurance sector...
Bryan: One of the other priorities we have is talent acquisition and staff development. Historically, we have struggled with that. I've been to some of the career fairs, you know, with the booths and whatnot. And the college kids, the best and the brightest, will walk right by us. Okay? And there they go down to the Google... there they go to Apple. There they go down to GoDaddy. They're going to those shiny brands that are sexy and whatnot. We've typically had a difficult time attracting young talent, and attracting the stars, if you will, coming out of the various schools. We just didn't have a great reputation. These kids coming out of college might remember mom and dad arguing about the electric bill.
Clinton: Sure. Right. Turn the lights off. (Laughs)
Bryan: Turn the lights off. You know, who wants to go work for that? That's shifting a little bit, with the technology that utility companies are bringing to bear. I would put the ISOs and RTOs, the regional transmission operators and the independent system operators, I would put those organizations and their technology, they are technology companies...
Bryan: ...Okay? I would put them up against anything with regard to sophistication and cleverness and solid operations and solid procedures. These are beyond professional organizations. There's not a lot of them, there's only a couple in North America. They're incredible. Absolutely incredible. And the technology that they employ is mind-boggling. Absolutely mind-boggling. But that's not taught. We don't know that coming out of school. You don't see that on television, whereas you see Apple products and Google, you know, advertised and things of this nature. So we've always struggled with talent acquisition. And staff development's always been a little bit of a struggle as well because, as I mentioned, we're built to operate. There's not a lot of time to do the cross... We look for any opportunity where we can crosstrain and whatnot. I was big on interns. I got indoctrinated in interns back at the ISO, and then when I came to APS, I got very involved with those. And I always tell the young ones, you guys gotta fix all the stuff that we've screwed up for the last 2 or 3 decades. So there's work for as far as the eye can see. It didn't stick to all the interns, but the ones that we were able to keep turned out to be incredible employees for decades. Working inside of a utility company isn't for everybody.
Bryan: But for the right person with the right mindset, the person that wants to provide for their family and is a Steady Eddy and have good, meaningful, community-focused type of jobs, it's perfect and it's the right place. So I give you all those priorities because, again, that's... that kind of helps us define our culture, or kind of describes why we look the way we look and why we operate the way we operate. What I just told you is a lot of what I would talk about when I met with the account executives early on with Nexient, to try to get them to appreciate that. And it was almost my way of saying, slow down a little bit...
Bryan: ...and you'll be invited in. But you gotta slow down a little bit. You can't go crashing in with all the answers real quick. I know you got good stuff, I know you got talented people. Gotta slow down a little bit and get to know these folks and build that relationship. Because you talked about it. What is it? It's trust.
Bryan: It's trust. Am I going to let you in my house to touch some of my valued treasures that could affect the people that live in my house? Am I going to do that, right? I'm going to be a little slower on that. I think we've done a good job on that, but it's always something that we gotta keep top of mind.
Clinton: And the super interesting, then, as you were describing some of those priorities that, that I was able to just literally doodle on the notepad I'm working on is, you said the word "brand" and then you evolved it a bit further beyond just brand. It's almost like "standing." And you used the phrase, you want people to feel good about the utility. Which again, like you said, is growing up as a 17-year-old or a 16-year-old, all you heard was "turn the lights off, turn the lights, turn the lights off." (Laughs) Tough to feel good about that. But then you also talked about the talent attraction. And the thing that kind of resonates for me is, right in the middle of those things, like, having a brand that connects with people and attracting net new talent that wants to go work on stuff, it seems to me that Venn is also, there's a lot of opportunity there that are the net new experiences. That are the digitization of the data, the handing it back to consumers so they're more empowered and enlightened to make good decisions for themselves. But that epicenter of, attracting talent and serving the people so they feel good about the utility, to me kind of screams, hey, mobile applications and applications that are on the edge and getting data right from the source. Do you want to talk about that a bit?
Bryan: Yeah. You know, that's moving in our favor a little bit by what's going on in our society. Go back 40 years, would burn some coal or run a hydro or operate a nuke plant, would generate that electricity, would move it to where the load is needed, and would send you a bill. Okay? And our relationship with you is that you pay your bill on time and we'll do what we can about keeping your lights on, okay? Think about it today though. And this is some of the pressure, you mentioned earlier, what are some of the opportunities or pressures of today's utilities? Think about what's going on in our society with all the green energy, the clean energy, the renewables, all this talk of all this stuff. It involves a tremendous amount of complex technology. And process change. You know, most of our utility companies, they've been in existence for decades.
Bryan: Decades, okay? And these assets that they build, you build a hydroelectric dam or nuclear power plants, well, these assets will last for decades and decades. And now what are we doing? We're introducing new things, new technology, wind and solar, and we're putting things in that, if not managed properly, will have a bad effect, won't have a good effect. It will be a bad... it'll be a disaster, okay? Because again, reliability and safety, you know, those are very, very key. You can't just inject new things. So, you know, if you have your wind farm, there's a whole process you gotta go through to be able to introduce that energy into that component of the grid. It just doesn't happen real quick and easy. But with all that type of work, with the technology, and then the products that are coming out, with electric vehicles and, and charging stations and all the applications that can help you determine whether you should charge now or wait till the night time or charge on a weekend or... Or, do I want to push energy that's in my Ford 150 Electric Lightning, do I want to push that back?
Bryan: Okay? Would it make economic sense, you know, to push that back? If you think about the disruption that that brings this, this historically "wheels on a bus," just go around and around, that's what we wanted. Now you have all this... As it rushed up onto us, you know, ten years or so ago, it felt like chaos. It felt like we were being invaded. And some of this came from the regulators themselves. You know, they would say, you know, we want this amount of renewables, we want to see these things in these particular areas. And we got pushed. Because left, probably, to our own accord, we'd probably just say, let's just burn the coal and let the water flow through the dam and turn the nukes up, you know, to 100%, let 'em operate. So it was a good, healthy push. And that injection is driving even more things, because when you think of generation classes, Clint, think of firm. Those are your hydros, your coal, your nuclear plants. You know, you turn those things on, you get 'em up, running, you know, at a high level, and you leave them.
Bryan: You just leave it. You don't want to be moving those around. You don't want to move those units around. If you gotta move around, okay, for peak, you know, time of day, commute and all that stuff, everybody comes home from work, they turn on the air conditioner, all that stuff. Then you start using some of your gas, your peakers, because supply has to match demand all the time. If demand outstrips supply, you've got a real problem. That's when you have your blackouts. That's when you have real issues. And so, energy generation is broken down into firm and non-firm. So what's non-firm? Well, most of your renewables are non-firm, okay? Your wind, your solar. If the wind's not blowing...
Bryan: There you go.
Bryan: Okay? If there's a cloud bank that comes over, you know, New Orleans, so much for your solar component there. So you have to be able to recover, and you have to be able to match that loss of generation, you know, within a fraction of a second. The tolerances here are very tight, okay? Obviously we operate, in North America, on a 60Hz system. That means you have a wave, you know, its frequency is 60 times a second, right? So, if you lose those generation assets, you have to make that up or very bad things happen. So, by putting renewables into the fabric of things, you know, wind and solar, which are non-firm, you have to complement that with some other technologies now. So you're hearing a lot now about storage.
Bryan: Now, we've had storage before. If you think of a big reservoir, that's really stored energy just waiting to go through a hydroelectric dam. We've had compressed air projects across North Am... well, throughout the world. But the new storage are these battery banks, okay? These large-scale batteries. And, you know, they'll charge those things in an off-peak time. And maybe sometimes the renewables would charge those. okay? And then, when we need to call those, mostly for regulation purposes, to keep the frequency at 60Hz, or to keep the voltage steady, okay? Because those have very tight tolerances around 'em. That's where some real unique, high-caliber technology work and product and integration come into play. So there's real neat things coming in that make us more attractive today than we were 20, 30 years ago, for the college kids to look at. And not just the trades, you know, folks in the trades. We need the full spectrum of work. So there are some exciting things that are going on. I think we've only started to scratch this itch. I think that, you know, energy trading, at some point in time, if I have solar on my roof and I generate more than I use, I push it back to the utility company. Typically in the form of a credit, okay?
Bryan: That's how I receive that. And they'll pull it back at a wholesale rate and they'll resell that at a retail rate to some other customer.
Clinton: It's a good business. (Laughs)
Bryan: It's great! And they'll run the bills and do all that type of stuff.
Bryan: I think, within our lifetime, and I think shorter than that, probably within the next decade, why can't I just push that to my neighbor?
Bryan: Directly. Peer to peer. Okay? Or the guy, you know, ten miles away. Who's going to generate, who's going to develop that market? And the utility would be the transport, and maybe the billing engines and whatnot. But there's the opportunity for a market to be created there, that maybe I want to push it to my uncle over, you know, ten miles away, and give him the opportunity to bid on... You know, why couldn't I create a marketplace for that? So I think the possibilities here are nearly endless, as new invention comes up, as, you know, some critical thinking comes into the space, and certainly as the price goes up.
Bryan: That's going to drive innovation to either, how do we reduce that, or how do we replace that energy source with something else that can do it cheaper or that's more abundant? So I think those opportunities are going to continue to come at this sector. And we have to get ready for that. In all cases, we're not ready for it. And some we are, but in all cases we're not ready for that. And that's going to be a slow, and for some, it's going to be a painful process to go through.
Clinton: Yeah. That spear of starting to look ahead and just seeing the tea leaves, seeing what's out there, and understanding that, yeah, well, every single day there's folks who are, whatever the brand is, but of course, like, the Tesla being known for okay, look, you could do the whole system, right? They started a long time ago, and it wasn't to create a really great car, but they were very out in front being like, this is a literal vehicle for a sustainability play. They were, you know, out in front of that, very honest about that from jump street. And if people are paying attention, you could see the things they were putting into motion that were, okay, well then we got solar, and we have our own tiles, and we have power banks, and we're encouraging, through this vehicle and then the power banks, the individualism, the ability to have your own agency around your own ability to generate and, like you said, trade and partner to move energy. And that can be a gigantic liberator, and also progress maker. Because, I mean, I had a gentleman on, his name is Clemens Conrad, and he focused very much on mobility and the future of looking at EVs, and the future of what it means. We actually ended that discussion with, hey, the play was to individualize utility. And then to give people that kind of power. And the realization that the electric companies, the utilities, the traditional ones, have such a huge partnership role to play in that new ecosystem. So a lot of it is business model reinvention and reimagining, okay, how do we play in the next 5 to 10 years? Because this is coming. And having the right partners to sit down with you and, I would say also challenge, right? Be honest about this, that say, hey, if you just keep doing what you're doing and you don't look to the future at all, well, good luck. It's not, probably not the best strategy to cement your next 100 years.
Bryan: That's correct.
Clinton: And continue to be super valuable, and still live your values, right?
Clinton: Be valuable in the hyperlocal community, which has always been your driver, but just now in a new way. So, as you look ahead three, five, ten years, what do you think some of those opportunities and challenges are?
Bryan: Yeah, you're exactly right. You don't want to be the person left holding the buggy whip.
Clinton: (Laughs) Right.
Bryan: Whatever the next buggy whip's going to be here, I don't, I don't really know. We have a lot of challenges and opportunities, some of which are being mandated through regulation, legislation, things of this nature. So there's going to be a push and whatnot. Others are going to reach for it. From a technology perspective, I get real excited when I think about AI, and the art of the possible for that. Utilities... Man, we never met data that we'll ever let go of. We love data. You know, we have these meters that, you know, if the average person understood exactly how much data is inside one of those meters, it's mind-boggling what we can do with that. The problem has always been processing that in enough time, and in a cost-effective manner, to be able to do something productive with all that data. So we have a lot of data that comes off, not only of consumption, what customers are doing, okay? Their behaviors. And we have 'em mapped pretty good, but further mapping them down to time of day, day of the week, sporting events that are going, like, what happens when the Super Bowl goes? How does that drive the consumption of energy, and things of this nature? We have a lot of that, but we can refine that a lot more. When we look at the operation of the grid, the grid, the big stuff, the transmission system, when we look at that, and we have synchrophasors, which are phasor measurement units, PMUs, we call them, that actually can interrogate the grid some 60 times per second.
Bryan: Okay? And tell you things about what's going on. But that can become very overwhelming, and it can actually paralyze operators who have to make decisions, you know, when they lose a plant or they lose a transmission line. But with AI, and the ability to process faster and more so, that data, I think, is going to find a very rich place within the go forward for operating on a utility. If you think about it, Clint, the amount that we consume, the amount that we burn, all the things around us, are very, very large numbers. And you really only need to shave off a small, small, small percentage. And that's a pretty big number too, because of the scale that we're dealing with. And so, if there's technology that can bring into bear, to help save a quarter of a percent here, a half a percent there, when you monetize that, you're talking about billions. Because it's really the law of great big numbers. You know, that's going on. I think that the energy transition movement - I think as we look for other solutions to meet our energy demands, our needs, and I think we'll continue to do that - I think those opportunities are out there for utilities and other entrepreneurs. I think you're exactly right. You know, the Tesla experiment, that should have shown us a lot of, there's a lot of lessons to be learned. I live in Scottsdale, Arizona. It's not uncommon to stop at a red light, and there'll be a Tesla or two in front of you and a couple behind you, maybe one to your right or left. All at one stoplights. I mean, the proliferation here is very deep. I think that the whole renewables, be it solar, wind, other mechanisms, I think that will continue to challenge utilities. Again, if they're going to keep their priorities and their culture in place and intact, they have to find ways to integrate those assets seamlessly into things that have been in existence for 50 and 60 years. And they have to operate just so. And I think that's always going to be a challenge, at least for the next decade or two, that's going to be a challenge for us to maintain and to grow. And I think with that, utilities need to prepare. It's not going to stop. I mean, the expectations, our usage is not going to wane over time. In fact, it's going to do the exact opposite. So I think utilities and other companies have to prepare for that. And I think a big piece of that preparation is that topic we talked about a little bit ago, which is talent acquisition. We have to continue to bring... You know, I operate, in my household, personally, very differently than how I see my kids, who are in their early 20s, how they... They've grown up with a mobile device in their hand. They do everything with their phone. They don't even use the computer much. They do all their transactions and things of this nature via the phone. So those are going to be the consumers of the future. How do they want to interact with the utility company or any other company? The consumer is going to change how we have to behave our processes, because their expectations are going to be driven by the regulators. And the regulators are going to push. Again, regulators, for the most part, are either elected or appointed by somebody who's been elected from the population at large. So their priorities, their concerns are going to come in and continue to push utilities forward. Or in some direction, maybe it won't be forward, maybe it'll be sideways, I don't... But they're going to push them in some direction that the utilities need to prepare for. And I really think that talent acquisition is key to that.
Clinton: Yeah. I think that's an awesome place to leave it. Bryan, I loved it. It was, for me, fascinating to get that deep into the culture of it, and then the very unique challenges that are there. And then, when there's challenges, well, what's on the other side, there's opportunities. And it's going to take some boldness, so the next hundred years are not just as successful but even more successful. And the cool part for me is that, the things that govern utility, the fact that you want to deliver efficiently and reliably and safely, that's not going to change. Those things won't change.
Clinton: But the ways in which it gets done are going to change rapidly and in really, really specific and profound ways. And at that epicenter is going to be some great talent, and new experiences driving all of that. And that, that to me is super exciting. So, Bryan, by the way, best way, folks, if they want to get in touch with you to say, hey, I've got some questions, how should they reach you? Is it best to find you on LinkedIn? What's something you'd like to share?
Bryan: They can always find me on LinkedIn under Bryan Kearney, spelled K-E-A-R-N-E-Y. Or, if they wanted to contact me directly through email, my email is very simple. These are all letters, five letters: ABKIS, that's Alpha, Bravo, Kilo, India, Sierra, at yahoo.com. I'd be happy to talk to anyone that's interested.
Clinton: That's so cool. So Bryan, thank you so much for joining us today on Catalyst. In this studio, we believe in shipping software over slideware, that fast will follow smooth, and aiming to create digital experiences that move millions is a very, very worthy pursuit. Join us next time as the pursuit continues on Catalyst the Launch by NTT Data podcast.
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