Framing Your Future
Phi Beta Lambda State Leadership Conference
Bill Coley
President
Duke Power
Charlotte, N.C.
Thank you for allowing me to speak with you. It’s a privilege to be here today. And what a delightful time of year to be in Charlotte! I know that your conference organizers have lots planned for you this weekend and many of you will be participating in some challenging competitions—but I do hope you’ll find some time to get out and enjoy spring as only Charlotte can offer. Best of luck to all of you.
I applaud your participation in Phi Beta Lambda. Nothing packs a more powerful punch than the combination of business and education.
I often have the opportunity to speak to engineering groups—folks who are making fantastic contributions to business and society. They’re out there advancing new ideas and new technologies every day and it’s hard, necessary work.
But I always remind them that we have to remember that new technologies or improvements to existing ones will still be judged using old economics. It’s where the “hard cash” part comes in.
The cold reality of dollars and cents carries so much weight in our business world, we can’t ignore it. As we go forward in any business—mine included—our customers won’t ignore it, nor will our investors. So I always advise future engineers to take business classes whenever possible.
Why? Just because we can do something with technology doesn’t mean we should. Our breakthroughs in technology must make as much sense on the business side as they do on the technical side.
It’s something we preach at Duke Power. For example, at Clemson University, which produces many engineers (and many of these talented folks are at Duke Power)—Duke Power not only endows an engineering professorship, but also a professorship in management because in our eyes they are equally important.
The reason is simple; business is a necessary component of society. We can’t do without it, and good business drives progress.
Business has inspired our world for centuries. From Thomas Edison’s invention of the light bulb to innovations in the automobile industry such as the combustion engine, Henry Ford’s assembly line, safety advances and fuel efficiency gains—business has shown the way of progress.
The working laser led to fiber optic communications and new and better forms of surgery. The single-chip microprocessor is at the heart of today’s trillion-dollar technology industry and ultrasound technology gives us a glimpse of new life. The discovery of the human genome opens up promising new vistas to cure disease.
These are just some examples of the magic that comes from business at its best—magic that’s ignited by human curiosity and knowledge.
We are inventors, innovators, problem solvers and pioneers. Business and business people have energized, economized and improved the standard of living for generations.
Business has become the means through which we give back to the world. Communities, schools, health and human service organizations, the arts and culture—all are touched and often guided by the hands of business.
It’s why you—the next generation of business leaders—have such a very important task ahead. And it’s why it’s so important to build your future with a solid frame—a frame that will support the great things you will accomplish. You must build a frame that will weather the winds of fate—the winds we call “economy” and “competition.”
How do we build such a frame? Well, we’ll want to use durable, strong materials and we’ll need the right tools to complete the job. These are the intrinsic values we as people bring to the table—our good character, our innovative ideas, our intellectual curiosity, and our drive to succeed. And we need a strong foundation—of these are human compassion, humility and integrity.
No frame can stand long without four strong cornerstones. Likewise, we owe our success at Duke Power to four cornerstones—Ethical Responsibility, Knowledge, Respect for People and the Environment and Balance.
Ethical Responsibility. No doubt, we have been hearing a lot about ethics these days. Enron’s recent bankruptcy and other corporate casualties have cast a shadow on the business world. It certainly is a cynical time.
A recent issue of Fortune Magazine reported that shareholder confidence is at an all-time low. That’s not surprising when you consider that when asked to rate their confidence in American institutions, only 28 percent of investors expressed having a great deal of confidence in big business. What is surprising is that the research was conducted nearly a year ago—well before the current spate of corporate bankruptcies.
Businesses have to endure economic booms and busts—more of those winds I talked about earlier. But the storm of public mistrust can topple any company. When those who invest their money and their confidence in our business begin to doubt our word and question our integrity, we risk a far greater and more lasting loss. At the end of the day, everyone in business must recognize that the investing and consuming public is the ultimate regulator of any business.
A company’s reputation is one of its most important assets, and it is built one action at a time, with individual integrity and ethical actions. The sobering truth is that one unethical action can quickly undo years of hard work.
Amid the scrutiny businesses are facing, there are positives. Companies—and that includes Duke Power—are making great efforts to lift the veil of complexity and corporate-speak from financial reporting. Today’s audiences want reliable, candid information they can trust and understand. At Duke Power, we’ve always worked to provide both depth and detail in our financial reporting, but this year we are working even harder. Duke Energy’s annual report is “hot off the presses” and is the “thickest” report we’ve ever produced—92 pages! We want to make sure we provide even greater context and clarity around our accounting practices, risks and exposures.
Businesses are beginning to de-code ethics for their employees, too. Ethical Codes of Conduct can not be left to collect dust on shelves. Instead, we must use them to ingrain ethical standards in our corporate culture to ensure that ethical conduct is a personal accountability—not just a corporate platitude. At Duke Power, we’ve placed professionals in positions to help ensure that compliance and ethics are incorporated into every aspect of our business.
I am pleased that Phi Beta Lambda takes ethical behavior just as serious—as evidenced in your Code of Ethics and Goals.
Second, we must build our frame with knowledge. We have to know our business better than anybody else. And we had better know our customers better than anybody else. If you don’t know who your customer is, you are dead in the water. Experience is critical and education is something we can’t do without. Education is critical to this country remaining one of the leading economic powers in the world. At Duke Power we have always been involved in education—both for our employees and the area we serve.
Third, we must have respect for people and our environment. The reality of business is that there are unavoidable by-products of manufacturing processes. At the same time, we have an obligation to do what we can to ensure our processes have a minimal impact on the environment we live in. We all have that responsibility, and it has to be factored into any business equation. Managing environmental risk is part of the business portfolio—and the expenditures we make to ensure we are environmentally responsible—are just as important as any other investments we make.
Natural resources play an important part in producing electricity. They command our full attention and respect. Duke Power’s roots come from hydroelectric power—generated when we harnessed the mighty Catawba River. It’s still an important component of our generation mix—kicking in at peak periods of electric demand—making sure the lights stay on in the Carolinas when everything else is “on,” too. Duke Power employs environmental scientists, biologists and engineers to make sure we balance our operations with any impacts it may have on the natural resources on which we depend.
I am also proud to say that emissions from our seven coal-fired plants are actually 40 percent less than they were a decade ago. Our plants are running more and emitting less. We continue to investigate new technologies to increase our efficiency in an environmentally responsible manner.
Duke Power has also put more than 69,000 acres of land into preservation through partnerships with environmental groups, state and local agencies in the Carolinas. Our partnerships are an important part of our commitment to environmental responsibility.
And that brings me to the fourth and final component of our frame, or foundation—balance. Nothing can stand for long without balance and business is no exception.
I’m sure each of you knows something about balance. You do it every day by balancing the demands of your academic life with your social life. Or to put it another way: Too much partying and not enough studying and you flunk out of school!
In business, we have to balance the demand for our product, the need to be competitive and profitable with our obligation to ethical behavior and respect for the environment. If we don’t, we flunk!
In my business, balance is what it’s all about. We must figure out everyday how we can meet a growing demand for energy while addressing concerns about the environment all the while doing so in an ethical manner.
In the United States, technology is driving the demand for energy. Internet use accounts for about 8 percent of the total energy demand in the United States.
In the past 10 years, U.S. energy consumption has risen 23 percent, while the capacity to generate energy has grown by only 6 percent.
The only way to meet this demand is through balanced generation. Coal is our country’s must abundant fuel, but there hasn’t been a coal-fired plant built in this state in 25 years. Siting one is tough.
Nuclear Power plants don’t produce emissions and are the most efficient and reliable plants in our system. But there are no new nuclear plants under construction or slated for construction in the United States today. As with coal plants, siting a nuclear plant is tough.
There’s natural gas—an alternative to coal. Natural gas-burning plants are more efficient than ever, and 90 percent of new power plants being built today, including a new plant Duke Power is building in South Carolina, are those that burn natural gas. But it’s not a renewable source, and it’s not as cost effective as coal or nuclear.
Hydropower is clean and renewable, but it would be almost impossible to build new hydroelectric projects today. It would mean flooding thousands of acres of land, displacing wildlife, residential and even commercial areas.
You can see that there is no single answer to meet our growing energy demands. We can’t rely on one source alone. It will take a balance of natural gas, coal and nuclear to power our future. It will also mean a balance of conservation and generation, new technology such as fuel cells and micro turbines and innovations we don’t even know about yet—all the while, balancing our environmental impacts and approaching the demand for our commodity with an ethical eye.
In closing, I will tell you that there is nothing more satisfying than producing a product that makes a difference in the lives of others. I have been fortunate to have been involved for more than 30 years in a business that produces a product which literally keeps people alive, safe and comfortable. Creating value is what it’s all about. That’s the real reward we get from our business careers.
Frame your future with ethical responsibility, knowledge, respect for people and the environment and balance—and remember that the greatest of these is balance. Do that, and I am sure you will create value where you are, too.
Finally, be aware of the fact that the highest standards of business conduct won’t guarantee that you or your company won’t be criticized or accused of improper conduct. Politics and especially the media will, on occasion, seek to make you the “bad guy.” The only defense you have is your personal conduct and ethical behavior. In the end, that will support and vindicate you no matter what political or media cynics may say.
Thank you.
