R.E.S.P.E.C.T. – You either get it…or you don’t!

Compos Mentis

The year was 1967. The song was “Respect.” It was a huge hit, belted out by gospel singer Aretha Franklin. The song was iconic to the emerging women’s movement in the 1960s, and has since inspired so many other sentiments, including this column. Respect for other people. Respect for one another’s needs. Respect for honour, for integrity, for perseverance, for high standards of performance.

AMI systems are the second most costly investment a utility will make, second only to power plants. Utilities must get it right. The technology choice must be right! Right, too, must be the eventual selection of meters, the AMI communications system, the network management software, the Meter Data Management Systems (MDMS), the system integration services, the field hardware installation services. The AMI consultant and vendors must be right. The relationship with each of these technology and service providers is crucial. Mutual respect between the utility and the suppliers is essential. Some utilities know this. Some claim to, but don’t. A utility with a reputation for no respect or poor professional treatment of vendors pays more and gets less than the utility that understands win-win business relationships.

AMI system contracts are big money deals. The suppliers of these products and services must compete aggressively over what too often is a very costly, drawn-out, multi-year process. These vendors must make a huge speculative investment in the sales effort and proposal activity. During this same period the utility personnel – all the way up to the CEO – are usually courted, praised, nurtured, golfed with, wined-and-dined, listened to and generally treated like royalty. Yes, some complete idiots and technically incompetent utility people do get what they think is the free lunch. But it is what comes next that is so important. The utility employee who is always “on the take” for a free lunch most certainly does pay for it. How? He pays in the loss of respect for that individual by the vendor, both personally and professionally. The freeloader will never know what the vendor really thinks of him, but he will have paid a steep price.

Utilities that understand the meaning of mutual respect maintain the importance of wholesome and respectful relationships with vendors. These utilities are forthright, and do not lead on vendors who are unlikely to be selected. These utilities allow proposers reasonable time to respond to RFPs, and don’t favour one vendor with a last minute extension. These utilities understand that the vendor is entitled to make a reasonable profit, and that ill-advised, take-no-prisoners negotiations now will eventually come home to roost later when problems arise. There is no free lunch. Competent utility personnel do not “exercise” vendors unnecessarily, and are mindful of the cost to the vendor of every request they make.

Unfortunately all too many utilities abuse the AMI sales process, and thus inflict pain and suffering in the process. This happens when utility personnel expect to be extravagantly entertained by vendors because, “that is what vendors are for.” This happens when utility personnel start to believe that the special attention they are getting from vendors is because they, personally, are somehow special, brilliant or terrifically attractive as humans. Sorry, you’re not.

There comes a time in every utility employee’s life when he contemplates life on the “other side.” Some utility people, when they are finally able to collect their pensions and move on to greener pastures, eventually call some of the vendor companies they dealt with as utility employees to inquire about employment. After all, it was not too long ago when the vendors seemed filled with admiration for their talents. It is amazing to see how many are stunned to discover that no vendor is interested. Why? Simply because these vendors had not been treated with respect during the sales and vendor selection process. And because certain vendors were led on, or urged to incur large proposal costs, with little actual prospect for meaningful business.

If utilities expect respect from their suppliers, they must treat their suppliers with respect! “Oh, no,” you may be thinking, “the customer is always right. Utilities can get away with whatever they want.” Or you may believe that with this much money at stake a utility can do whatever it chooses. Wrong again. The utility that treats suppliers with dignity and respect is the utility that will always get the extra measure of commitment, support and service. The employees of those utilities will always find professional options open to them. But the utilities who think it is great sport to crush or demean their suppliers, make absurd demands, or expect the extravagant “free lunch” will ultimately find the lunch was not free.

The cliché expressions “There is no such thing as a free lunch” or “What goes around comes around” were never more true. Treating vendors with respect pays huge dividends. The enlightened utility has a culture that suppliers are treated openly, consistently fairly and with respect. That even includes reaching for the lunch check once in a while. That token showing of respect is a terrific investment!

If you would like to comment on this Viewpoint, please write to the author at cm@smart-energy.com