How’s your electric cooperative doing? Are you feeling stuck?
EDITOR’S NOTE: Duane recently wrote this LinkedIn.com article encouraging cooperatives to see their foundational roots as a way to jumpstart their engagement and purpose.
For businesses that used to be able to count on increasing sales every year, the unexpected has occurred – no more growth. In Arkansas, our sales have been flat for the last five years. Nationwide, coops have posted
negative growth in three of the last five years.
Five years ago we entered the “post-coal” era. Environmental rules made the construction of new coal plants economically infeasible. Today all three major coal companies are bankrupt and domestic coal production has dropped to the lowest level in 35 years.
Now we find ourselves entering the “post-baseload” era. With limited demand growth, new baseload power plants will not be needed. Efficiency gains are likely to continue to offset what little growth remains, and solar self-generation is about to boom. Wind, solar, and efficiency measures stand poised to meet the overall needs for utilities for many years to come. The American Electric Power subsidiary SWEPCO just announced its newest resource plan, which for the first time in memory does not call for the construction of any new base load capacity. They aren’t unique; even with the anticipated closure of a major coal-based plant in Arkansas we don’t see a need for anything significant before 2028, if then, and when we finally do build something it is not likely to be anything beyond a small reciprocating peaker.
This doesn’t mean our mission has changed. Far from it, in this era of limited growth our rural communities need reliable, affordable, and increasingly clean energy more than ever to maintain the jobs they have and possibly even attract a few new ones.
Motivation and innovation can be challenging in times like these. In recent research published by Harvard Business School, 85% of executive said that the primary barrier to progress and growth in their organization wasn’t the outside factors, even thought they were significant. The primary barrier to organizational growth was internal. Every business will encounter times that they feel stalled out or stuck. So what is the formula to overcoming this dilemma? Rediscover the founder’s mentality.
In their recent book, Chris Zook and James Allen suggest that to restore focus and connection to customers, companies should rediscover their founder’s clear sense of mission and purpose. We are lucky – our mission hasn’t changed over the years and we never really strayed that far from it. Our business model enforces a member-driven mindset. So what can coops do to revive that original enthusiasm that our founder’s had?
disruptive opportunities. Efficiency and renewable generation aren’t the enemy; they benefit our members. Some see these technologies as disruptive threats to the old business model, but that doesn’t have to be the case. With appropriate rate design a coop can survive, even thrive while lowering their customers’ bills.
What is it that your community needs that the market is not providing? What would best improve their quality of life?
For Fairbanks Alaska it was a community-based grocery store. The local electric cooperative assisted in obtaining a federal grant to support the development of a member-owned grocery cooperative. Non-profit, locally-sourced groceries!
For many cooperatives the answer is broadband internet access. Broadband service is important to our members, but for far too many it is not available. With the low customer density of our service areas, it is unlikely that any for-profit business will ever pursue their connection. Non-profit cooperatives can be the catalyst for bringing that service to the underserved, just like we did with electricity in the 1930s.
So again I ask, what does YOUR community need? A grocery store? A hardware store? A medical clinic? Broadband service? We have the business model, the cooperative business model, which is proven to provide reliable and affordable service when no one else will.
Abraham Lincoln was once asked how long it took him to write The Gettysburg Address, a speech that defined our nation. He replied, “All my life.”
The greatest things we do aren’t a result of a momentary idea, but consistent, sustained hard work over the decades. When we remain true to our original purpose, supporting our communities, we will succeed. We don’t need a new business model; we just need to keep doing what we have been doing all along – selflessly supporting our members and their communities.
Over two thousand years ago, the rabbi Hillel asked the question: If not me, who? If not now, when?
Things are bad in this world, yes. Our economy is stuck. Our members lack hope. Our communities are struggling. It is easy to give up – that’s the easiest thing in the world. But remember that your light shines brightest in the darkness. Let your light shine! Lead the cooperative movement as a revival for your community.
If not you, who? If not now, when?
ABOUT THE AUTHOR
Duane Highley is President and CEO for Arkansas Electric Cooperative Corp. and Arkansas Electric Cooperatives, Inc. He is a registered professional engineer with degrees from the Missouri University of Science and Technology and has completed the Harvard Business School Advanced Management Program. Duane serves on the Board of the Electric Power Research Institute (EPRI), on the Southwest Power Pool Members Committee, and is co-chair of the Electric Subsector Coordinating Council (ESCC), working with cabinet-level administration officials on electric system reliability, security and resiliency. Duane has appeared in testimony before committees of the U.S. Senate and the U.S. House of Representatives. He is passionate about advancing the cooperative business model to provide essential services in developing countries around the world.