IGNITE 2017 CONFERENCE

Solving Business Challenges Through Ideation

Chuck Whitlock, Duke Energy


Chuck Whitlock
Senior Vice President – Cincinnati, Duke Energy
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Chuck Whitlock has more than 25 years of experience in the energy industry and currently serves as a senior vice president in Duke Energy’s Cincinnati office. Chuck has managed Duke Energy’s Midwest Electric Distribution business serving 1.6 Million customers; led its natural gas transmission and distribution systems serving 500,000 customers in Ohio and Kentucky; served as interim president of Duke Energy’s commercial businesses including Duke’s renewable and international investments; and served as president of the company’s competitive generation and marketing business. Chuck joined Duke Energy (then Cinergy Services) in May 2000 as a power trader after beginning his career at Arco Alaska Inc. where he worked in the finance organization, and later helped grow its natural gas business.

Video Transcript:


Good afternoon. Is everybody feeling the lunch? Yeah, perfect, right? Let me start with thank you. I want to say thanks to the Spigit team, I want to say thank you to the partners, I want to say thank you to the people that have impacted me over the last kind of day and a half. I've personally experienced the benefit of the conversations and the input, and I'm in a better spot now then I was when I started.

I want to do a couple of things. I want to share with you what my job now is at Duke, and it's predicated on some big changes, some needs inside of our company, and candidly, inside of our industry. I want to try to impart to you some of the things that I've learned in the area of innovation and, maybe some of the cultural aspects, and I feel a bit like the conversation that Jim led, did anybody see the movie, Something About Mary? When the guy was like, "I feel like I had eight minute abs, and he just showed you six minute abs." I'm like what the heck, man?

We struggled in the valley. We struggled with the valley of how do you take an idea that comes out of crowdsourcing, and how do you get it to execution? Because at the end of the day, that's really the pay dirt, so we built a set of tools that's nowhere near the capability of the team, but it's what we had, so we'll talk a little bit about that.

Let's just get into the deck. Really the idea is, how do we go, how do we experience change, and how to we take the change and get to a new spot? Hopefully the new spot is a better spot, but you don't always know that, right? It's about the journey, and the journey itself is valuable, and that's a cultural piece that's aspirational for the company I work in. I don't know if it is for you, but for us, it totally is. We don't recognize the value of the journey. We want to have it all dialed and all planned out, and then we're willing to execute to it. We're actually at our best when we have no idea what the outcome is, so we're at our best, like most other utilities, when a storm comes.

When a storm comes, the strategic objective of the enterprise gets really, really clear, and everybody makes everybody else better. Their titles go away, fresh ideas about how are we going to manage logistics for 10,000 lineman? How are we going to get through flooded? We see the thing, but when it comes to connections with our customers, we struggle. So we're going talk a little bit about partnerships. This idea of Duke Energy, you, and me. Building a partnership on the basis of change inside of our industry, to go to a different spot. Let's start with this.

Here's a guy that lived 2,000 years ago, and he's like, "The only constant is change." In the upper right hand corner, you can see the era that the lived in. That line, that speed of change, was non-existence but he felt it, right? He felt the change. We live in the upper right hand corner of that thing where the world changes so fast, you can't even keep track of it, right? Does anybody feel that? I feel that. If I could just take a pause for a second, get calibrated to where it is and what I need to pay attention to, I think I'd be in a better spot, but the world moves so fast, that we don't have that luxury, which is why the work that you're doing is so important. For your enterprise, and really for, I'd say, the whole deal, is figuring out how to deal with change.

I put this picture in the middle. My concept partnership, you just heard Booz Allen talk about partnership. You hear Spigit talk about partnership. My concept of partnership is a dangerous one, because partnerships are kind of hairy at times. I've been married 28 years. That's a picture of my wife and I in the middle. She looks a lot better than that. That picture's the best one I've ever taken. Married 28 years, and when I got into it, the big word inside of the deal was like progressive elaboration. I had no freaking idea what I was getting into when I got married. No idea. Didn't know how many kids I was going to have. I was living in Alaska. Went to Dow. Lived a lot of different places. What I recognize now, is that where I'm bad, my wife is really, really good, and where my wife's not so good, which is like one area, I can show up part of the time. So the idea of partnering is a theme that runs through the talk that I want to give to you today.

There are some companies, that are at the bottom, that I think that there's probably some connections that could be made that help us go to a different spot. Quickly about Duke. We have three big businesses. We provide 60 hertz electricity to about 25 million customers. We have a gas business that's really an infrastructure business, and then we have a commercial renewables business. The pictures, the location on the map, so you think about my business, and the pace of change, how fast I can adapt. I've got to get seven regulatory bodies in seven different states to go, "Thumbs up."

We move at the pace of regulation in a world that moves really, really fast. $57 billion dollars of market cap, $130 billion dollars worth of assets. That's a little bit about us. 29,000 employees. Let me show you the next slide. I think the interesting part of our business is really as close and as proximate as we get to our customer. If you think about the electric business, it's a big central generator that has a big transmission line that goes to a substation, and then the substation goes to a bunch of different houses.

That distribution network is the spot where I think we're going to compete win, or die. I think it's the place where we get an opportunity to partner. There's some stuff in there about our assets, and really the distribution assets. We have 95,000 square miles. So what, right? 95,000 square miles. A big service territory. A lot of geography. We have over 400,000 miles of right of way. That right of way has a value inside of my enterprise, but I think my right of way probably could be potentially more valuable to partners than I'm thinking about. 25 million customers, right? I don't know how many Southern Company has, but close to probably the same number. Maybe a little more, a little less. 25 million customers that are my customers now.

Here's the interesting idea about customers. 10 years ago, we called them rate payers. That's what they were. The little old lady in tennis shoes. We've got to run our power plants to take care of the faceless little old lady in tennis shoes. We've adopted this word customer, but we don't have the foggiest idea what that word really means.

One of the challenges for us, and one of the things that I'm looking for in a partnership, is somebody that helps me become more intimate with a customer. I don't have an intimacy, but I have a desire to be more intimate with my customer. Seven million poles. That's a lot of poles. Poles that are on streets. That could be important for autonomous vehicles. That could be important for building out a 5G infrastructure. There's stuff that I want to bring to the table.

A little about our employees, I think we have rally skills. When stuff gets bad in a storm, we show up. We're operators, so we execute, really, really well when the mission is clear, to the degree that it's not clear, we struggle a little bit, so that's a little bit about us. Why am I saying that? Because I want to date you. I want to partner with you. I want to find people that you know in your network that could be interesting.

Here's my family. I can't tell you anything about me in the upper left corner, so my faith, flows through every part of my deal. There's a picture of my wife and kids. That picture in the top is with my daughter. Last weekend she went to her junior prom and I got to do hair and makeup with her. As a dad, that is like really, really cool.

My youngest boy Will, in the upper right corner, he rides BMX bikes, and so I picked up BMX bike and I do that with him, and we spend a lot of time, that was in Atlanta. Then skiing with my son. So, I've got a lot of different roles. I started with an accounting degree from the University of Alaska. I was a financial analyst. I traded commodities for most of my career, and then I ran power plants for Duke, I ran the gas business and I ran the wires.

Lale, when you talked earlier today, and you talked about finding a role inside your enterprise that used your gifts. I feel like the job that I have now, it's a little fuzzy, figuring out this partnering idea, figuring out an engine that helps us execute, is really a use of my gift. When you said that, I was like, you said three years into it, right? I'm like six weeks into it, so I need to hook up with you and figure out where my next step is going to go.

Let me take a second here and give you something that I think might help you with a challenge. Look at this slide. If you think about work life balance, about 2/3 of that slide's about my work. Here's the tidbit that might help you. When you think about a challenge, the words that you select around a challenge are meaningful. You don't have to get them perfect, but they're meaningful. If I ran a challenge that said, "Tell me about your work life balance, your work-life balance," I'd get a certain response from the community. If I said, "Tell me about your life work balance," I'd get another set of responses. Way different, right?

If I said, "Tell me about your work life," with no hyphen, just one word. Is that one word? I don't even know. One, but work life, tell me about your work life, I'd get a different set of responses. How about if I said, "Tell me about your life's work"? A way different set of responses. The idea of the crowd and sensitivity around alignment about the question that you ask, I don't know if you can find that useful but I think it's probably worthwhile for you to consider.

Change came from a variety of different places. I won't go through that. So let's talk a little bit about the industry real quick. The monopoly game, we were all regulated monopolies. Every one of us. To varying degrees in America, monopolies don't survive. Our generation business, the lower left corner, is funny deregulated, and in Ohio, we serve a million customers. We don't have one power plant. Not one. None. The transmission wires in our business were put into a big gigantic region, and the region does all the transmission planning for us. They construct and engineer and design all the wires and different companies can come and build it.

We have an analog in the three areas of our business. Generation transmission, where the monopoly went away, and we're left with the last one, which I think is distribution network. I think two or three speakers have talked about Edison. He showed up in two or three different conversations, so he's in my deck. There's a joke in our industry that goes, "If you wake up Alexander Graham Bell and you show him telephony, the thing that he invented, he'd be like, 'Man, it looks way different than what I invented.' If you wake up Edison, and show him the same thing, he'd be like, 'What have you guys been doing for the last 100 years?"

We're sitting there, and we're like, we haven't really done anything in 100 years. If you look at the middle part of that slide and you go the technology, the confluence of industries, changing desires for customers, is going to make that game change. We've talked about it for a long time. Cheryl LaFleurr, she's the FERC chairperson now and she said, this was recently, we have really crossed a tipping point. What people have been writing about for decades, which is this change of Edison, the joke, they've been talking about the joke. It hasn't changed. We've reached a tipping point where it's going to change. It could be any one of those things. Cloud computing, solar panels, the 5G network, but it's going to make the thing change. Change means tons of opportunity. It means partnering for a better place.

Parallel universes. The FCC chairman, the ex-chairman, Tom Wheeler was like, "Hey, I recognize that I'm in the way as a regulator, I've got to get out of the way and allow innovators to go." I don't know how many conversations I've had one on one going like, "Man, you're slow, because it's the regulator," and I'm like, here's the regulator in a parallel universe. FCC going, "I've got to get out of the way," and I believe that they'll get out of the way because they the regulator feels right now that they own the customer. They're the ones that are protecting the customer from the big evil utility. We've got to change that deal, which is the word intimate with a customer.

When I walk in and I start with something that the customer really wants, I can't remember what circle that Jim talked about it, but it was the desirable circle, I guess. If there's something desirable, about a new use of my right of way, or a new use of my pole, or a new use of a smart meter that customers go like, "Man, I like that." Check and mate.

In the right hand corner, you can really see, that was when the power, the lights went out. The infrastructure that Duke manages and the infrastructure that other companies manage is super-critical. I grew up not far from here, in Santa Cruz, California. When the power went out, PG&E went out, it was awesome for me as a kid. No school for a week. We were boiling snow for water and fun. My power goes out for one hour, and my kids are licked up tighter than two coats of paint, man. They are like, they're looking for the generator and the pole barn to start it through their phone to charge, they're like, "When's the power coming back on?" I'm like, "I don't know."

It could be national security that creates the impetus to create opportunities for us to grow and to go to a new spot. The thinking for us, what am I looking for? I've told you that that customer intimacy, that connection that I don't have, that's not in my DNA, I really want that in a partner. I want scale. I have 25 million customers. I think the people that are showing up, I think Amazon has 65 million Prime customers. Verizon I think has 113 million customers. AT&T, 175 million customers. So I think I want scale, but I'm not sure. These are my hypotheses. You'll see a slide on hypothesis later. I want to build an engine inside of Duke that allows me to take an idea and execute through the valley with a partner that produces new opportunities and new ways to deliver value to customers.

This is a little bit about the engine. Not near as fancy. But it's taken ideas, the magic in the middle is going like, I've got to order my ideas by value. Let me take a second and just talk about a trap that we fell into, which is around this idea of measurement. We measured success in our crowdsourcing, and we would go, let's say that we wanted 100 people to show up and 200 people showed up. We'd raise our arms in a V. Not bad, it's good, it's a fair thing. There's a economist that said as soon as you make a measure, a goal, it becomes meaningless.

We want six ideas, and we got 12 ideas, we doubled our number of ideas, but we weren't measuring this thing about how many of those things did we actually execute, so if you think about the suggestion box that was talked about, did you say the suggestion box was burying under this stage? Or it's just kind of? It was a ship that was buried.

The thing that people hate about that was the idea went in, and it never showed up into anything. You listening to me's kind of cool, but when you take my idea and you actually do something with it, the power. It's getting to validate the idea, then it's decide, which is tough for us. Then it's a scrum with a partner. I didn't know anything about the whole agile, lean canvas until six weeks ago right, so I'm very baby diaper boy. The outputs are going to be joint ventures. The outputs are going to be new businesses, and the outputs are going to be stakeholder value, I believe.

Here's some more detail. I won't go through that. You've heard and you've seen demonstrated here, Booz just talked about, we used to cut it, go it alone, but now we want to partner. I've got an orange light, I've got to fly. You can see in nature the benefits of alignment, and people functioning together, whether it's birds, whether it's fish. I got into bees with my son, which was a random trip down Wall Street. Bees, their strategic mission is two things. You want to know what they are? Make honey, and make other bees. That's it. They all have their job. That's what they do. There's two kinds of bees. Big ones. Italian bees and Russian bees. The Italian bees are really good at making babies, and the Russian bees are really good at making honey. Just for fun, I got two hives. One of each.

Here's our innovation program. I put programs around it because it's a journey, right? Our program's not tight. Polly and I joke about it, right? Not much of a program. So it's a little baby. Trying to figure out our path through innovation. I put Pinocchio up there because I'm Pinocchio and there are people behind that are really the Geppettos on the string boy. Just going like, "What do you think we should do? We should try that on that sounds good to me."

I loved this idea of, if I plan, but if I take a step, my plan's way better, right? So I've got to get to a spot where I'm taking more steps. We deal with a problem around awards and honors. We don't know how people are motivated. Whether they're motivated by intrinsic or extrinsic values, but we reward them all the same way. Something for you to think about. Do you really know what the community wants from you as far as rewards?

This intersection of planning and implementation. Let me take a second on this slide. We get sideways at the intersection of planning and implementation, and I can't wait to get with glider, and figure out how I can get better in that spot. This is the agile manifesto, and I'm using this, this might be helpful to you. How many people in this room struggle with, I'll call it the cultural aspects of shifting from the where we are, how many of you guys feel like you're in the where we are column? Anybody? Yeah, most people would go like, "I want to move to the right." Like most people, if you interview, you said, "Hey, which side do you want to be on, team A or team B?" They'd be like, "I want to be on team B."

Here's what I'm doing. Take one perfect plans. We're running this engine that's taken an idea, and we're going to develop a plan using a planning workshop that's six hours. That's it. We' don't develop plans inside of Duke for 6 hours, never. Maybe in an outage we do, but no other time would be ever do that. It would be six months to six years to 60 years. It would be a long planning cycle because we want perfect plans.

Here's how you get the culture. Bite size piece. I go, beautiful. You said to me, senior leader, you want to move from perfect plans, perfect plans to fail fast, learn fast. Beautiful. I give them an idea, and they're like, "Chuck, you didn't give me an adequate plan." I'm like, "Fair enough, I'll go back. I'll see you in a day." I come back, I give them a plan again, they go, "Not good enough." I'm like, "Fair enough. You know what? I'm gonna ditch that idea, I'm going to do another idea," and I keep coming back. I'm like, "You don't want to move. If you don't want to move, you as a leader culturally, we should take that off the list." That's trying to create this behavior that builds culture, because at the end of the day culture makes behavior. To me.

That last piece, I think is interesting. Let me talk about that real quick. I'm way over. This mindset shift, that shift from the left to the right is way more valuable than any discreet idea that I think we could come up with. It's more powerful than the engine that tries to make the ideas actionable. I think that mindset shift is really the thing that is interesting for Duke. Real quick, the value potential. I told you 25 million customers, these are at a scale, so this idea of partnering with Duke to find something interesting in the red dot. Right away. Pole. Smart meter. Customer. Billing. How do I take the little thing and put it into the green circle, which is the US market? How do I take the US market and go, "What does that think look like in the world?" That feels like a big deal to me.

Here's a couple of partnering hypothesis. What would it look like if I took Amazon and I said, I want to do all of the logistics that I do, all of that's handled by Amazon, but what happens if I said to them, "The right of way, now they can make package deliveries through a lot of my right of ways." Through drones, for instance, because I own the right of way. They just fly them along the wires, or they put up the tubes that used to send money at a bank across the wires and drop them in the bottom of ...

Crazy ideas, but each one of these companies, I think there are interesting opportunities right away. The Hyperloop. If you looked at the right of ways that Duke owned, and all the electric utilities owned, you could actually connect a big part of the US and make the Hyperloop, but that's an idea of partnering, so there's a bunch of hypothesis here that I'd like to validate with you.

Here's my appeal. Join me in my journey. Duke is on a journey, and there are other companies in here, PG&E's here, Southern Company's here, they're all on a journey. This idea of partnering. The benefit for me of being here is finding people that I can connect with and get to a different spot.

Thank you for your time. I hope that you got something out of it. If you didn't, then don't invite me back. I'll come back until there's like a restraining order, because I've gotten a lot out of it. So thank you.