Davies Consulting

Strategies for Complex Organizations

Keep it Simple: 3 tips for being prepared

by Steve Owens

When it comes to dealing with risk, most humans dislike complexity. Gray areas feel unacceptable. We want clarity – not uncertainty — in our future. We want to predict with accuracy so that we can prepare with precision.

As utility leaders, we want a sense of control and predictability so that we can protect our systems and deliver the energy that our customers depend upon. To that end, we tend to like our math simple. Straight lines. No squares. No oscillations. No curves. No parabolas. No step functions.

But Mother Nature works quite differently.

We’d like to think if she delivers three big storms this year, three or four are coming next year as well. We’re looking for simple trends so that we can prepare.  “LOL,” says Mother Nature, “that’s not how I roll.” She’s working on geologic time, where patterns exist over centuries and millennia. Human time is almost irrelevant here.

TIP #1:  Avoid shorter term thinking. When simple, short term math directs us to a narrow pattern (a weather-related bullseye with us smack in the center), we can identify needs and spend the big bucks so that we’re ready to manage the big storms we think are coming our way. Then, after consecutive years without big storms, many utility executives (and regulators) begin to wonder: is this a NEW weather pattern? Maybe we aren’t in the bulls-eye anymore?

This is the danger zone. While once we were industrious ants, preparing diligently for the worst-case scenario, we shift and become like the lazy, complacent grasshopper. Hakuna matata! No worries! Don’t you see the new pattern?  We don’t have storms anymore!   Our new motto is right out of Mad Magazine: “What?  Me worry?”

Here’s the truth. When it comes to storm response planning, there are no short-term weather patterns. You CAN’T know when the next big storm will come.  There’s not even a complicated equation to reasonably predict it.  Actually, the more I think about it, here’s an equation for predicting gut-wrenching storm events:

y = F + (P1*0)

[Where y = likelihood of a life-altering emergency event;

F = the future probability of a storm; and

P = the recent past experienced probability of a false pattern.]

In other words, past performance is not an indicator of future results.

TIP #2:  Stop wasting time trying to predict the unpredictable. If you’re in an area where hurricanes, tornados, floods, or ice storms have been part of weather patterns for millennia, heads up. It doesn’t matter how long it’s been, odds are there is another weather event in your future. A major storm (or earthquake!) event with the potential for crumbling your company’s very foundation could happen anytime, so your system and your people must be ready.  Leading utilities acknowledge that resilience and preparedness are not luxuries, they are essentials to protect the safety and reliability of the energy delivery system.

TIP #3:  A steady effort makes sense. The prudent course of action is to plan and prepare. Instead of going crazy when the pattern looks bad and going to sleep when the pattern looks favorable. Steadily and logically prepare for the worst all the time.

In between events, customers, regulators, and state officials don’t really pay attention to whether you are the “ant” or the “grasshopper.” When massive outages extend for many days, your stakeholders will pay attention – and you’ll be in the hot seat if you haven’t prepared in advance.

Let’s be honest. There’s a lot at stake for today’s utility. Customer satisfaction, brand reputation, financial liability, and reliability are only a few of the risks in play. In the utility business, we’re not gamblers. Our customers depend on us to provide safe, reliable service day-in and day-out. Let’s be prepared to fulfill that mission.