Green Mountain Power Sees Opportunity In Renewables

By Matt Mayberry and William Throop

This is a transitional time for businesses, with leaders at companies of all sizes facing a complex tangle of economic, social, and environmental challenges. Meeting them requires new behaviors and skills that can help enterprises flourish in an uncertain, changing, collaborative, connected, and caring world – and you might be surprised to learn that a 124-year-old utility company is setting a great example.

Green Mountain Power can seem more like a disruptive high-tech start-up than Vermont’s largest electric utility. In recent years, it has emerged as a leading national innovator in renewable energy, demonstrating how electricity can be generated, stored, and distributed in ways that are cheaper, cleaner, and more resilient to interruptions.

While some utilities are resisting the shift to renewables, GMP is leaning into it, seeing an opportunity to transition its business model from delivering electrons to providing energy services. The company’s eHome initiative offers homeowners an easy and affordable energy makeover with a package that includes energy efficiency, solar power, and smart controls to optimize and monitor real-time energy use – all financed through the customer’s utility bill. This initiative involves customer-focused collaborations with partners, including NeighborWorks (a non-profit that conducts energy audits and provides low-interest loans for energy improvements), and numerous local solar contractors.

GMP is also one of the first utilities in the nation to offer customers Tesla’s Powerwall home battery to reduce peak-load usage and have back-up power during outages (handy during the stormy Vermont winters.) It even pays customers a monthly fee to utilize the energy stored in their batteries during peak load times.

While these innovations and partnerships help keep rates low, they also mitigate one of GMP’s risk factors – that in coming decades, decentralized energy will make it easier and cheaper for customers to leave the grid. This would force utilities to raise rates to maintain investor returns, driving more customers off-grid. By bundling smart-grid services GMP is making it cheaper and more convenient to remain on the grid.

GMP’s CEO Mary Powell credits the company’s ability to transform threats into opportunities to fundamental cultural changes over the last 20 years. When Powell was first hired as the head of HR in 1998, Green Mountain Power had a typical utility culture: hierarchical, slow-moving, control-oriented, and lavish at the C-suite level. Powell set out to create a more humble, adaptive, fast-paced and collaborative environment.

In a recent article, we argued that in order to thrive in this period of global transition toward sustainability, most business cultures will need to make just this kind of dramatic shift. Our research indicates that the managerial virtues that have driven success over the last century are less suited to the challenges of our times and that a different set of “sustainability virtues” requires more emphasis.

We use the term “virtues” quite broadly to describe dispositions to think, feel and act in skillful ways that promote the aims of a practice. Virtues contain both visible elements (knowledge, skills, behavior) and invisible ones (subconscious beliefs about success, predispositions to perceive and respond in certain ways). For both individuals and organizations, virtues guide behavior – especially when no one is watching.

GMP’s story illustrates five clusters of virtues that maximize managers’ abilities to grasp the opportunities of our times.

Systems Virtues enable managers to focus on the dynamics of whole systems and allocate praise and blame in light of such dynamics. They assume that most of the major issues companies face are best addressed by diverse teams that understand the organization as a whole system, nested within global economic, social, and ecological systems.

These systems are complex enough that managers need to emphasize Humility Virtues (like open-mindedness, curiosity, and gratitude for what we learn from others) in order to avoid risks associated with their blind spots.

Leaders also need to embody Collaborative Virtues that foster innovative cross-sector partnerships – virtues such as sensitivity to audience and context, fairness in the distribution of benefits and burdens, creativity in seeking compromise, and graciousness in disagreement and confrontation.

The transition to sustainability is likely to involve a daunting array of technological, economic, social and ecological disruptors. To adapt, company cultures will need to embody Adaptive Virtues: resilience, flexibility, courage, hopefulness, creativity, and self-control. These help us deal more effectively with limits to our control in a complex system.

Lastly, Frugality Virtues such as efficiency, waste aversion, thrift, and a focus on nonmaterial goods will be needed to effectively navigate planetary boundaries and economic upheavals.

We are not suggesting that firms abandon the traditional virtues that have enabled business success. Rather businesses will benefit from shifting the balance away from overly-competitive, controlling tendencies, and toward more collaborative, humble, and adaptive habits.

This kind of shift doesn’t imply wimpiness or poor performance. Rather, the mindset opens new opportunities for creating value – both financial and social. The case of Green Mountain Power illustrates how the shift toward sustainability virtues can drive business model innovation that is both disruptive and beneficial to society.

We often look for technological and policy solutions to address global challenges like climate change. But these alone are unlikely to get us to sustainability. We as leaders also need to transform our daily decision-making and open our eyes to the emerging opportunities of these times. Evolving our business virtues is an important step in that direction.

 

Matt Mayberry, Ph.D., is President of WholeWorks, a firm focused on strategic leadership development. He specializes in experiential learning using business simulations as “practice fields” to provide senior managers with a safe and realistic environment for building their leadership capabilities and accelerating change.

William Throop, Ph.D., is Professor of Philosophy and Environmental Studies, and Director of the Environmental Studies program at Green Mountain College in Poultney, Vermont. He specializes in environmental ethics, theory of knowledge, and sustainability education, and has written numerous articles and book chapters on these subjects. 

Image credit: Green Mountain Power