Acquisitions power growth at Laclede
In three short years as president and CEO, Suzanne Sitherwood has nearly tripled the number of customers The Laclede Group serves.
Sitherwood joined the public utility holding company in February 2012, after she was recruited by The Laclede Group’s board for her proven acquisition prowess at Atlanta Gas Light Company in Georgia, where she had worked for 30 years and was serving as president.
She did not disappoint.
After leading the company through a restructuring to position Laclede for growth, she inked a $975 million purchase of Missouri Gas Energy from Texas-based Southern Union Company in September 2013, adding 500,000 customers to Laclede’s base of 625,000.
In April 2014, The Laclede Group purchased Alabama Gas Corporation, bringing Laclede’s customer count to 1.55 million and making it the fourth largest natural gas distribution holding company in the country today.
In addition to success in the acquisition arena, organic growth and innovation are also adding to the company’s bottom line.
Missouri Business had an opportunity to ask Sitherwood about The Laclede Group’s growth strategy, company innovations, and what it is like to lead one of the largest energy companies in the country.
Missouri Business: How did you get your start in the energy industry?
SITHERWOOD: When I was in college, I was a co-op student working for Atlanta Gas Light, which is the gas company in Georgia. I liked the industry and especially the people. I liked the impact we had on customer’s lives. Growing up, I was a military brat and moved around a lot, so when I was offered a full-time position with the company and an opportunity to stay in Georgia, I took it and made it my home for 30 years.
MB: What attracted you to take the lead of The Laclede Group?
SITHERWOOD: I had been one of the primary architects for growth with my predecessor company, and it is now the largest company in its sector. So, when I was given the opportunity to come to Laclede, I accepted the position and came here enthusiastically to help Laclede grow.
I knew of Laclede and knew it was strong financially and had a strong balance sheet, and it had the capacity for growth. I knew growth would be good, not only for Laclede, but also for our customers as well as the state of Missouri. I also knew there was a strong management team here and that they had the capacity to deliver on that growth, which indeed has been proven.
MB: How did you prepare The Laclede Group for aggressive growth?
SITHERWOOD: First, I sat down with the management team, and we mapped out a clear vision for the company. It wasn’t a “boil the ocean” kind of vision. It was very targeted.
Then, we communicated that vision to all stakeholders: our employees, our customers, our shareholders, our regulators, and the business community. We told them, this is how we are going to grow, and this is how we are going to go about it.
The second step was to organize the company around our strategies. You don’t organize and then create a strategy. You create a strategy and then organize around that strategy. That’s why we went through a reorganization at the company fairly early on. Again, it wasn’t about the company not having talent. It was organizing the talent around our promise of what we were going to deliver.
The third step is what I call “project management discipline,” which is developing an understanding of the scope of your work, the timing of your work, and what that work will cost.
MB: What are the most dangerous pitfalls a fast-growing company must avoid?
SITHERWOOD: Doing too much. Make sure that you focus on the big things that matter. Don’t think you have to do everything, because everything doesn’t necessarily line up behind your vision and strategies.
Also, understand that if you are in acquisition mode, if you are acquiring other companies, you must be very sensitive of the employees and customers of those other companies. You really need to do a cultural assessment and build a strong integration plan to bring those companies together.
The bottom line is that you are serving customers, and you have to make sure you are supporting your customer service requirements with a strong culture embodied in the people you employ.
MB: How do you keep employees informed and engaged during fast-paced change?
SITHERWOOD: Communication is critical. One of the first things we did was work hard to build up a strong communications team that could engage with all of our stakeholders and make sure we were being transparent and clear to all. It becomes an easier message when you are talking to everyone and sharing the same story and the same promise with the same timeliness for all involved.
MB: How has the shale gas boom impacted the energy industry and The Laclede Group specifically?
SITHERWOOD: Enabling our country to have more energy independence is a very good thing. Specifically at Laclede, the boom has lowered gas prices for customers.
Because of the location of the shale resources and Laclede’s connectivity to those supply basins, Laclede has been well positioned in the Midwest to deliver this natural gas to markets.
MB: Tell us about the Spire compressed natural gas fueling station at Lambert and future plans to expand natural gas fueled vehicles.
SITHERWOOD: We spoke with our business customers and learned that many were looking for alternatives to diesel, not only for the economic aspect, but also because of air quality concerns. We talked with these customers to find out the business model for natural gas delivery that would work for them. Laclede is uniquely positioned to provide this service.
Our traditional customers have meters and gas equipment to power their facilities. Now the technology exists to power vehicles with natural gas.
The first [compressed natural gas] fueling station was opened at Lambert Airport. Part of the reason for that is that we wanted it in our backyard. We also knew there was a large interest in having this resource around the airport, tractor trailers, and other smaller providers that deliver goods and services during the day and refuel at night.
We used the Lambert station to make sure, from an engineering and construction perspective, that we were building the best station to serve our customers’ needs. The Lambert station has exceeded our volume expectations.
MB: Which industry innovations are powering The Laclede Group’s growth?
SITHERWOOD: Our primary focus is acquisition. However, we are also focused on organically growing our existing gas companies in two ways: by investing in updating aging infrastructure and also through the addition of a vice president of organic growth who will be looking at new technology and ways to leverage the benefits of natural gas for all customers.
Another area of growth is through innovations such as Spire and new technologies like microturbines. We are also looking at assessment of upstream infrastructure as a potential area of growth.
MB: What is the best business advice you have ever received?
SITHERWOOD: Follow your gut. You can study things to death, but ultimately you have to step back, exhale, and follow your gut.
MB: What is your favorite thing about living in Missouri?
SITHERWOOD: The people! The people here are incredibly nice, supportive, and interesting. I have thoroughly enjoyed the experience of living here.
My husband and I immediately fell in love with the architecture, the Arch, the people, and all St. Louis has to offer.