Leadership development, culture, and trust: The CEO of WAPA on the critical levers of business performance

In this podcast, Heidrick & Struggles’ Ed Manfre speaks with Mark A. Gabriel, CEO and administrator of WAPA, the Western Area Power Administration, about the importance of leadership and culture as critical levers of business performance. Gabriel discusses some of the activities and initiatives he has implemented with respect to leadership development, culture, and innovation; shares some personal definitions of leadership and trust; and offers three pieces of advice for leaders looking to improve their company culture.

Some questions answered in this episode include the following:

• (3:51) You often underscore the importance of leadership and culture as critical levers for business performance. Where did that connection start for you and how has it been nurtured through your career?
• (5:51) You continuously refine and communicate the strategic importance of your industry in the world. Can you share with us what you see as the strategic purpose of your industry and its impact on the world?
• (7:27) From a leadership and culture standpoint, would you talk about the dynamics that you witnessed when you took on the new role at WAPA?
• (8:53) Can you talk to us a bit about some of the activities and initiatives that you've implemented with respect to leadership development, culture, and, particularly, innovation?
• (15:11) If one of your peer CEOs came to you and said, “Mark, I have to be a better leader and I want to improve my culture. Where do I start?” What would be your elevator pitch to him or her?

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to the Heidrick & Struggles Leadership Podcast, the premier provider of leadership consulting, culture shaping, and senior-level executive search services. Every day, we’re privileged to talk with fascinating people who are shaping the future through their leadership and vision. In each episode, you’ll hear a different perspective from thought leaders and innovators. Thanks for listening to the Heidrick & Struggles Leadership Podcast.

Ed Manfre: Hi, I'm Ed Manfre, partner at Heidrick & Struggles and a member of Heidrick Consulting. In today’s podcast, I'm speaking to Mark Gabriel, administrator and chief executive officer at WAPA, the Western Area Power Administration. As part of the US Department of Energy, WAPA provides affordable, clean, secure, and reliable hydropower to seven hundred utilities, customers, and generators across 15 central and western states. Mark is the author of Visions for a Sustainable Energy Future, which won the Indie Excellence Award for Environmental Writing. And during his time at the Electric Power Research Institute, he led the national effort known as the Electricity Sector Framework for the Future. Mark, welcome, and thank you for taking the time to speak with us today.

Mark A. Gabriel: Thanks, I'm glad to be here.

Ed Manfre: You've described the situation at WAPA as a re-envisioning of the organizational mission. Can you elaborate on some of the things that were going on when you took over seven years ago?

Mark A. Gabriel: Sure. WAPA is a tremendous organization with a great history, but it was really in need of revitalization. At the time that I joined, the employee morale was low, and we had gone through some significant leadership changes and challenges. Congress was mad, the Department of Energy wasn't pleased with the performance, and the organization was what I would describe as in a sideways drift. They had a strategic plan, but it was one that sat on the shelf, that was not particularly understood by the organization, and our customers, who were made up of seven hundred utilities across 15 western states, weren't pleased. There were always questions about finance. So, it was really less a challenge with the history but more one of not being prepared for the phenomenal changes we're seeing in the electric utility business.

Ed Manfre: Now here we are—you've just delivered a stellar annual report for fiscal 2020. Tell us about some of the performance outcomes you've been able to achieve.

Mark A. Gabriel: Yes, my pleasure. Let me point out it is really the women and men of WAPA who delivered this phenomenal performance, which included things like returning another $270 million to the Treasury for a total of $2.6 billion—with a “B”—in my tenure. Our overhead and maintenance cost was 0.012 cents per kilowatt hour delivered, which I think is among the lowest in the United States. We executed 98% of our operations and maintenance budget, 96% of our CapEx budget—all of this in the context of the pandemic, during which we’ve had to change our work practices. Our safety is in the top 10% of the entire electric utility business, and we're in the top 25% best places to work in the United States government. The teams did just an amazing job despite having to deal with all the pandemic requirements, which included moving 1,900 employees and contractors to maximize telework in just four days.

Ed Manfre: Well congratulations on that success. We've known each other for a number of years and I often hear you underscoring the importance of leadership and culture as critical levers for business performance. First off, where did that connection start for you and how has it been nurtured through your career?

Mark A. Gabriel: I had always noticed it, moving up in management in my career, but it was really a number of years ago, at the Electric Power Research Institute, where I saw a tremendous organization but one pulling in different directions. What really dawned on me was the fact that we were not aligned in our culture. Here we were, as an organization, as one of my cohorts used to say, paid to dream about the great future, and yet we had various pieces of the organization pulling against each other—competing—when, in fact, we all had the same global vision of what should be done. It really came to me over time and during the work we did as a senior leadership organization, to ask, what are those areas where we can improve our culture? And then, that can be driven down to the rest of the organization so that the vision and the belief that we had and the success that we can have as an organization can be spread more broadly. And I will say that, over time, now, as both the CEO and during a number of years that I worked as a consultant, I saw the difference between so-so or good organizations and great organizations: the great organizations always had a strong culture—in fact, those strong cultures allowed them to succeed even in times of real stress. Culture is really at the core of an organization; it’s sort of the unwritten words and the glue that holds people together and allows great success.

Ed Manfre: You continuously refine and communicate the strategic importance of your industry in the world, and I don't hear many leaders communicating in such a way so often. Can you share with us what you see as the strategic purpose of your industry and its impact on the world?

Mark A. Gabriel: Yes, absolutely. I'm fortunate that I was recruited into the electric utility business almost 30 years ago. I was like everyone else; I flipped the switch, the lights came on, and I plugged things in and they either worked or they blew a fuse or a circuit. There is no more critical enterprise in this country and around the globe than electricity. If you think about it, all that we deal with every single day, our capabilities as we’re communicating now in this horrible pandemic time, are all driven by the fact that electricity is available: it’s available, it’s ready, and it’s there all the time. Can you imagine this pandemic if the lights started going out? Whether it’s health or transportation or comfort or medicine or air-traffic control, it all really hinges on the availability of electricity.

Every day, when I come home at night from work (the end of the day is when we used to come home, as opposed to working from home), I know that our people have worked hard every day to keep the lights on for 40 million Americans, safely and with an understanding of the critical nature of power.

Ed Manfre: From a leadership and culture standpoint, would you talk about the dynamics that you witnessed when you took on the new role at WAPA?

Mark A. Gabriel: Well, we had an interesting dynamic. There were a number of people in the organization who had been there for decades, and the organization, candidly, hadn't focused on the exogenous or extraneous factors going on, the pressures and changes in this wonderful industry. There was a lot of tension and turmoil between our regional offices—and remember, my footprint is 1.4 million square miles; it’s like going from Paris to Moscow and Athens to Oslo, with all the politics in between. There was a lot of tension between our regions, between our headquarters, and I think it was driven by local needs and a lack of understanding of the broad issues that we all face, whether it’s physical security or cybersecurity or how we managed our IT infrastructure. That lack of understanding led to a lot of tension; it led to an organization that was afraid to make decisions or, when it did, there were so many caveats to those decisions that the organization could not move forward. And that's a challenge for all older organizations as they make sure they position themselves to serve [their customers’] needs today, with a vision for what's going to come out in the future.

Ed Manfre: Can you talk to us a bit about some of the activities and initiatives that you've implemented with respect to leadership development, culture, and, particularly, innovation?

Mark A. Gabriel: Yes. First and foremost, about six years ago, we put together a strategic road map. Now, note that I didn't say strategic plan, because, as my business school professor always said, strategic plan is where the rubber meets the sky. The reason we picked a road map was that it gave us some specific directions to pursue over the next 10 years. We then drove that down as tactical action plans so that everybody in the organization could understand what it meant—what it meant to him or her personally and what he or she should be doing to drive forward. We also did a lot of work around culture: surveying and talking to employees. Every other year, I go out and meet at least 17 or 18 different union groups to really listen and hear what the organization was saying, and a couple of things had popped out. One was around leadership, because, in many cases, leaders in organizations and supervisors, in particular, are promoted because they've got great technical skills, and it dawned on us that we needed to make sure that their supervisory and leadership and management skills were equal to the same technical levels they had achieved in their jobs. We needed to put specific tools and techniques in place to do so. We've developed a leadership road map, a road map for when somebody comes into the organization, they know what they need to do to keep moving through the organization.

From my perspective, leadership is not just about ties and titles; leadership is for individuals to take ownership of his or her own direction as it ties back to our road map and our plans. We've recently reinvigorated our core values as an organization and communicated them very broadly across the organization. About five years ago, now, we started an inclusion and diversity committee, which really tries to ask the question of how we can have a more inclusive and diverse workplace—by inclusive, I mean making sure we are listening to people throughout the organization and not just the few who always want to raise their hand. And, very importantly, from my perspective, inclusion means engaging people broadly, from the field crews and the craft workers all the way through to the people in finance, and certainly to the people who have leadership roles, but really making sure that all our people are engaged. And last but certainly not least, one of the things that I brought is the mindset that it’s important for us to all be students of the business. One of the gaps I saw when I came in that we've really worked hard on was that, for example, somebody in finance didn't necessarily understand the implication of markets, or somebody working in the field didn't understand why coal plant closures were going to impact our customers. I urge everybody to be learning all the time and we go out of our way to make sure our people are educated and become students of our business.

Ed Manfre: You recently shared some personal definitions of leadership and trust that you've developed, and we know these are tricky topics for leaders to learn about and to apply. Would you tell us where you landed?

Mark A. Gabriel: I've landed on what I call my big five. The first is that you're never going to do wrong by doing right. What I mean by that is that sometimes you have to make a tough decision. When I came to WAPA, prior management, quite frankly, had pushed a few things under the rug. They didn't want to tackle the hard problems, even though tackling those problems was critical for the future of the organization. Those problems can get you some grief in the process, as I experienced with things like expanding internal audit and uncovering things that are uncomfortable to talk about.

The second one is that transparency is the key to success. I believe that the Western Area Power Administration is the most transparent organization that I've dealt with in my career, certainly. We instituted something five years ago called the source. If you go to wapa.gov and type in “the source,” it lists all of our financial data: our economic data, any speech that I have or the senior leadership team has given, and all of our presentations and material, and most of them are published in real time so that anybody who’s concerned, any of our stakeholders, could find the information right away.

Number three is that organizations have to focus on alignment and not consensus. Consensus, to me, very often is the lowest common denominator. I want to make sure that in all levels of the organization we can sit around the table, have vehement discussions, and make sure that people get their opinions out and bring their data to the table. But, at the end of the day, I want folks to walk out understanding what we are aligned on and what decision was made. And that understanding is a difference between great organizations and good organizations.

The fourth one is that leadership means giving people the freedom to do the right thing. During my almost eight years as consultant, almost every one of the recommendations I made came from insights I got from people within the organization. What that says to me is that people in organizations know what the right thing to do is, but very often they feel throttled by leaders who don't want to hear the answers. So, give your people the freedom to do the right thing and they will succeed.

Last but not least is that trust is the belief that I have your best interest at heart. That came from our federal employee viewpoint survey. It took us a couple of years to really tease out what it meant when people said they didn't trust leaders and supervisors. It’s kind of a thorny question, right? What is trust? It was an employee who came to me and said, “You know, Mark, I believe I can trust you because you have my best interest at heart.” That was an ah-ha moment for me and it’s something I truly believe in.

Ed Manfre: If one of your peer CEOs came to you and said, “Mark, I have to be a better leader and I want to improve my culture. Where do I start?” What would be your elevator pitch to him or her?

Mark A. Gabriel: My elevator pitch is very simple, it’s three things. Number one, listen. And I mean really listen for what you're being told. The second thing is to make sure you are being heard. And the third is to communicate. You can never over-communicate in organizations. It ties back to trust; it ties back to all of those critical leadership skills. You may think you've said it often enough, but I can tell you, as a leader, you cannot over-communicate. It is impossible to over-communicate.

Ed Manfre: Mark, thank you so much for taking the time to speak with us today. I certainly appreciate our relationship and we as a firm wish you every continued success.

Mark A. Gabriel: Great, and thank you so much for the opportunity. Please be safe—and make sure you wear your mask, it’s very critical.

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