Southern Co. CEO: ‘We’re just a wee bit sexier than Spam’

Not many buttoned-down CEOs of publicly regulated utilities rise through the ranks after blowing the whistle on a colleague involved in financial improprieties. And not many CEOs have a diagram on their office wall of Napoleon’s march to Moscow in 1812, when most of his troops died, largely because of poor preparation.

Tom Fanning

Tom Fanning

Meet Tom Fanning, a big believer in preparation. Fanning, 55, began his career at Southern Co. three decades ago after graduating from Georgia Tech. He leads an $18-billion-a-year utility with operations in four southeastern states. Fanning talks about his whistleblowing experience, work-life balance and how to fistfight.

Q: About 20 years ago, you blew the whistle on a colleague for allegedly violating the law. Would you please discuss that and how it changed your life?

A: I was a treasurer of a Southern Co. unit. We had hired a guy who I believe tried to commit a Foreign Corrupt Practices Act violation to get influence around a bid we were doing in Portugal. I was largely responsible for catching him and stopping him. I went to the higher-ups and he was terminated.

After he left, I was given financial responsibility for Asia, and then an acquisition deal hit in Australia. I had been married for four years, had two young children, and I essentially left my family for a total of about nine months.

But because of the tumult going on in Southern, partly related to the financial impropriety, it was exceedingly important to represent Southern in the very best way possible. We had to stand for something. It required sacrifice and I was perfectly willing. So I led a team down there.

When you go down on one of those merger and acquisition deals, it’s 18 hours a day, seven days a week. We thought about my wife and family coming with me, but all of the support networks were here. And I would not be able to pay attention to my family anyway, so it required them to stay here.

Q: What did you learn about work-life balance from that experience?

A: It was a spear to the chest. I had a wonderful business experience, but from a personal standpoint, it was the worst. I choke up talking about this today.

My son, Matt, was on the phone wanting to know why I was not at his third birthday party. He was the type of kid who when I was mowing the lawn, would be right behind me with his little red lawn mower. He could not understand why I could not get home and see the magician at his birthday party.

I learned that at the end of the day, you have to stand for something more than your accomplishments at work. You have to balance the competing interests in your life. There are times in life when you are out of balance. What you have to do is recognize that you are a human being, and make personally rigorous priority choices.

When kids are at home, you want to pay attention. Everybody feels frayed about making these choices. Now that I run a 26,000-employee organization, we have so many two wage-earning families, you’ve got to give those folks room to have a life outside of work.

Q: A football training injury right after high school prevented you from fulfilling a dream to go to West Point. Instead, you went to Georgia Tech. What did you learn from that disappointment?

A: Life is not linear. It does not proceed from A to B to C. If you look at my career at Southern, I’ve been here 31 years, had 15 different jobs in eight different business units. It always seems that there’s a left turn ahead — something you never saw.

In finance parlance, every option has value. What you’ve got to do is run your life in such a way that you have the personal flexibility to take advantage of unforeseen problems, which can be opportunities.

There is nobody on earth who has a perfect life. When something bad happens, you’ve always gotta have the discipline to put one foot in front of the other and do something positive that day. You’ve got to take personal responsibility. You have to have that kind of fire of purpose.

Q: Speaking of fire of purpose, you believe in treating competition in business like trying to win a fistfight. Would you please discuss?

A: I was taken by “The Art of War” by Sun Tzu. A key is to win without fighting is best. Nobody really wants to get into a fistfight. But man, if you do, you better be ready.

There are three rules. The first rule is to pick the time and the place, and get ready. Run your business as well as you can.

The second rule is to swing first and make it count. If you’re in a competitive situation, you really have to make your first punch your best, because you may not get another.

The third rule is to kick them while they’re down. In business school, they say build a sustainable, competitive advantage.

Q: After a three-decade lapse in the United States, Southern’s Georgia Power unit is involved in the first new nuclear project to win regulatory approval. How does that square with your conservative business approach?

A: We were the second lowest Beta [a measure of stock volatility] in the S&P 500 last year, next to Hormel. So, we’re just a wee bit sexier than Spam.

Here’s the business angle. You have to really understand why you’re here. Put customers in the center of what you do, and relentlessly pursue that as your North Star. The purpose of this company is to provide reliable and affordable electricity.

The United States has to pursue a broad palate of energy options, including nuclear power. It is riskier than probably not doing it. We could rely just on natural gas. But if all you do is double down on gas, you are subjecting our customers to tremendous price and volatility risk. The right long-term solution — and yes, we’re going to undertake some short-term challenges as a result — is to take on these challenges in a careful, rigorous and disciplined way.

Each week, Sunday Business Editor Henry Unger has a candid conversation, called “5 Questions for the Boss,” with a top executive in Georgia. Some remarks are edited for length and style.

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David G Jones

May 20th, 2012
2:23 pm

If you get into a fight you have violated the key instruction in Sun Tzu. And you have failed. Winning before fighting means winning without fighting.