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Power from the bottom up.

POWER FROM THE BOTTOM UP

Every year for the past 20 years, Verl Topham has travelled to Cedar City to the Shakespeare festival. One of his favorite plays in King Lear. He likes Lear for the lessons it teaches about power and leadership.

Indeed, history repeats itself. We see the same misuses and abuses of power in most of today's organizations. Power, it seems, is intoxicating--it goes to one's head, affecting vision, reducing reason and, in some cases, inducing madness. The corporate counterpart to King Lear is the CEO who, from the top down, demands loyalty and expects certain affections from followers.

Atop the impressive One Utah Center tower, Verl Topham has the power office in the state. He enjoys expansive views of the Salt Lake valley and, electronically, has instant access to data and information on virtually every person, place, and thing in the state. Utah Power has some 530,000 customers in Utah, Idaho, and Wyoming, 4,800 employees, and annual sales of $1 billion.

But the 57-year-old native of Paragonah is amazingly unaffected by it all. Like the children in the company's ads, Topham has a sort of natural aversion to power. He quotes, in addition to Shakespeare, Thomas Jefferson: "I've sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man." Says Topham, "There is no greater tyranny than the tyranny we place upon ourselves through our own fears, inhibitions, restrictions, and self-limiting beliefs." He wants his management team to be free from prejudice and preconceived notions. His favorite book, Les Miserables, is the account of a French revolution against abusive aristocracy.

"I try not to let titles and office surroundings get to me," says Topham. "I try to keep a common touch and appreciation for those who do the real work of the company. I spend a lot of time visiting our offices and plants and our customers to listen to them and let them know I support them. There's a good deal of natural skepticism about me as the leader of a merged company. My managers see me as someone who has the power to upset their lives. I'm gone a lot. And so they wonder who I am, what I am all about, and whether I represent their interests, and the best interests of customers, stockholders, and employees."

He adds reassuringly, "I don't believe in bullying people or abusing power. I'd rather be creative in coming up with win-win alternatives. You have to respect the power of your position and use it carefully as you would the power of electricity. Respect is earned; it cannot be decreed."

One reason Verl Topham practices a bottom-up style is that he has worked dutifully along a slow and steady track up the legal side of the corporate ladder. Also, he comes from pioneer stock. His ancestors settled the Paragonah area, and his father, Angus, was a farmer and rancher. While Verl never took to ranching, he retained a small town sense of community and values. At age 16, he received a ticket out of Paragonah in the form of a scholarship to the University of Utah. He graduated in 1955 at age 20 and decided to go to law school, receiving a juris doctor degree in 1960. But he admits failing early in his career by "trying to find legal solutions for too many problems rather than good people-sense solutions."

He practiced law for 20 years, including a stint in the regulatory side of the business as an attorney for the Division of Public Utilities, Utah State Attorney General Office. He joined UP&L in 1972 as an attorney, dealing extensively with environmental and expansion issues. He was named assistant corporate secretary in 1974, associate general counsel in 1980, chief financial officer in 1981, senior vice president, CFO and commercial manager in 1984, UP&L board of directors in 1985, executive vice president of operations and executive vice president of PacifiCorp's electric operations group in 1989, and president and CEO of UP&L in February 1990.

In his role as CEO, Topham tries to spend one-third of his time directly involved in matters of business--attending board meetings, holding staff meetings, signing papers, discussing policies with senior management; one-third supporting community, state and civic causes, meeting with other business leaders, and supporting the arts, service clubs, fund raising, and charities; and one-third of his time thinking. "Thinking," he says, "is the most valuable thing I do for the company, and the most easily put aside. It bows to the pressure of other activities because sometimes it must be done in solitude. But it must be done, and unless it gets emphasis, it will not be done."

He also expects his managers to "approach every problem with the idea that there may be a solution--old or new, simple or complex, orthodox or radical" and to express their ideas without fear of reprisal. "Even if I reject your proposed solutions, I will respect your thoughts and opinions. I expect you to have ideas and the courage to express them. I will never expect more and will never accept less."

He expects six things of his managers:

1. to lead out in their respective areas of

responsibility to assure efficiency and

effectiveness in company operations;

2. to provide exceptional service to

customers and collect for those services

to achieve bottom-line profits;

3. to see that employees perform their

duties and when they do, to recognize

and compensate them fairly;

4. to give the CEO their best ideas for

new policies, programs and future

directions;

5. to develop people who can assume

any job that becomes vacant;

6. to take some time for thinking."

Says Dave Mead, manager of public relations, "He's candid about what he will and will not do and what he expects us to do. He's very open with information. He listens. And then he leaves you with some thoughts to ponder and questions to answer." Carol Hunter, director of Economic Development for Utah Power, says Topham "expects you to have opinions and to voice them. He always wants to hear the truth."

Topham says: "I expect our people to think and act on their own. If they can't think, they can't function. And if they don't function well, we don't have a future."

Al Gleason, president & CEO of PacifiCorp, says, "He had the foresight to seek the merger with PacifiCorp in 1987 because he could see the mutual benefits. One clear benefit has been the series of rate reductions, resulting in 21 percent lower rates since August 1987. And Verl has increased returns for shareholders by boosting the stock value. Without the additional power supplies created by the merger, Utah Power would be hard pressed to meet projected needs in Utah's growth economy."

The merger with PacifiCorp has not only made Utah Power one of the best performers in PacifiCorp but also one of the most efficient public utilities in America. Topham says the merger resulted in greater strength and efficiency for both Pacific Power and Utah Power divisions because of the power supply benefits inherent in seasonal peak demand differences and increased access to wholesale power markets. The two-year merger benefits total now stands at more than $200 million--25 percent above initial projections. Power supply advantages alone account for more than $45 million of the total.

"The merger with PacifiCorp has been good for us because of increased power supply; good for our customers because rates keep going down and services keep improving; and good for out stock-holders because they have made good returns (about 80 percent over the past four years, making it one of the better stocks)."

It's the typical "win-win" deal Topham negotiates. While some cities--Murray, Bountiful, Logan, and Provo, for example--have their own municipal power systems, Topham says, "We're looking for ways to do business that benefit both sides, becoming partners with them as wholesale supplier or joint venture. I concluded a long time ago that suing your customers is bad business. The only deals that are successful over time are deals that benefit both sides and make sense for all the stakeholders. I suppose that you can win in the short term by bullying people, but it's never worked for me at home or in business over time."

Carol Hunter recalls a time when the company was negotiating a contract with another utility for more than two years without reaching an agreement. "Every time we would reconvene, we would start from different positions. Finally, Verl said, |Okay, I want these Utah Power people at lunch and their counterparts at the other utility lined up facing each other across the table.' After talking to each other face to face for a couple of hours, we gained empathy and within six months we had all contracts put together in a win-win way."

Rather than fight, he prefers finesse in negotiations. He was a key figure in regulatory hearings before the Public Service Commission during the boom decade of the 1970s, when UP&L was heavily involved in construction of power plants and transmission lines, countless contracts, stock and bond issues, and work-force growth. Topham's impressive background in environmental law should serve the utility well in this decade. Efficient and economical balance of supply with demand is one of many challenges facing the electric utility industry. The evolving energy marketplace, coupled with regulatory dynamics, often tax a utility's ability to meet customer needs while producing earning's growth, as witnessed by the financial difficulties or bankruptcies of several utilities.

Utah Power has just concluded its best year ever (for the third year in a row), as measured by bottom line profits, and the company recently announced yet another rate reduction. "Since 1988, we've cut our rates by 29 percent while we've boosted profits. Many utilities across the country are having financial difficulties. We're doing well because we didn't make speculative investments in real estate and S&Ls. We got out of the business of building new power plants at the right time, and we concentrated on serving our customers and supporting economic growth and community development."

Ever self-effacing, Topham downplays his personal role in the company's performance: "My style is to get good people and get out of their way. If they don't know how to do their jobs better than I do, we're all in trouble."

But several people give him more credit. PacifiCorp's Gleason says that Topham's "integrity and quiet competence earns trust. He simply gets the job done."

Dave Mead, who has worked with Topham for 20 years at Utah Power, says, "He is a good leader and motivator. He has a knack for putting the right people in the right jobs and then not interfering with their work. He's warm, friendly, caring, easy to deal with."

High on Topham's list are "rate payers," who he calls "customers," saying, "it's more than a semantic thing. We are serving people as customers. When I first became commercial manager of this utility, I spent many weeks visiting our facilities and calling on major customers. I came away with the realization that because we saw ourselves as the experts on electricity, we too often tried to tell our customers how to use the electricity and how we would supply it to them. Since then, I've tried to listen to our customers, supply them with the service they want, and be open to win-win options that serve them better and save us money."

One measure of customer service is how many minutes our customers are out of service. Although Utah presents some challenges in terms of geography and climate, Utah Power has managed to reduce down time and improve service to remote and rural customers. "Serving remote homes, farms, cabins and businesses often isn't very profitable for us," says Topham. "The residential customer in Moab pays the same rate for electricity as the business in downtown Salt Lake City."

Topham says that his biggest challenge now is to "control costs, keep employee morale high, and have people feel good about the company, about themselves, and about each other. Nothing pleases me more than to hear employees speak well of each other." It also pleases Topham to reinvest in the state. He sees UP&L as a partner in the economic development of Utah. Carol Hunter says, "He's a champion of economic and community development in Utah. He's wants every community to be positioned for growth. As the director of Economic Development Commission for the state, he assists with expanding businesses and with recruiting and relocating out-of-state business. It's not just talk--he makes resources available to us. If we need experts within the company, we can extract them from their current assignments and use them on teams to solve problems and promote growth. He tells the field officers that 50 percent of their job is economic development. He wants to make the Utah economy recession-proof and ensure that we have sufficient resources to meet current and projected needs."

He takes pride in the fact that Utah Power has built several power plants without environmental objections. "We've spent more money on environmental cleanup than any company in the state. But then we should. We're the biggest coal burner in the state. We own our own coal mines and account for nearly half the state's coal production."

The bottom line, says Topham, is that "business is often boring--dealing with routine problems, punctuated only occasionally by real excitement."

Creative thinking is more exciting than meetings, he says. "Thinking is the one chance we all have to impact the world. And then to take some risks and stick your neck out--that's what makes for all the greatness I find in the world. You may have to grind through a lot of routine to get at one idea that is really exciting."

"I'm a man of few words," concludes Topham. "Talk is cheap. And if I don't have anything to say, I keep quiet. When I speak, I try to say it softly and succinctly. The longer and the louder some people speak, they more they prove their ignorance."

PHOTO : Verl Topham, CEO, Utah Power

Ken Shelton is editor of Utah Business.
COPYRIGHT 1992 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Utah Power and Light Co.'s chief executive officer, Verl Topham, a believer in, practitioner of open management, team playing
Author:Shelton, Ken
Publication:Utah Business
Date:Feb 1, 1992
Words:2367
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