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Welcome to Episode 8 of the Leadership Lyceum: A CEO’s Virtual Mentor

“Leading Beyond Authority in Utilities: A Conversation with American Water Works CEO Susan Story”

American Water Works (Ticker: AWK) is the largest publicly-traded water utility in the country, serving one of the basic human needs of about 15 million customers across 47 states, and in Ontario, Canada. The company serves, and Susan leads, in a mission-critical infrastructure sector.

I have had the pleasure of hearing Susan Story, CEO of American Water, speak to industry groups on numerous occasions over the last several years. Her speeches are engaging and carry power that moves an audience to action.

I realized that the persuasive power of her public speaking and her approach to leadership demonstrates quintessential qualities for effective leadership beyond the boundaries of the corporation that she leads.

A key measure of success in the utility industry is continuously achieving safe, clean, reliable, affordable delivery of service. These objectives are dynamic and their parameters are often dependent on public policy, legislation, and regulatory relationships. Industry leaders, therefore, must advocate in these areas by leading and influencing beyond the boundaries of their corporations. They must lead beyond their authority.

There are three types of authority, according to the famed sociologist Max Weber.

There is authority based on legal rules. There is traditional authority, based on traditions, customs and historical precedents. Weber posited an additional authority structure called charismatic authority.

Charismatic authority is conferred on someone not by established norm or rule, but by an individual’s personal history, achievements and leadership qualities. Weber defines charisma as possessing exceptional qualities regarded as exemplary in the eyes of his or her followers.

A utility executive leads beyond the boundaries of the corporation with charismatic authority. Leadership effectiveness in this sphere of charismatic authority, above and beyond the corporation’s boundaries, requires unique characteristics and competencies often overlooked.

There are many descriptors for the general qualities of the effective leader. But there are very few specific frameworks for effective leadership with charismatic authority. In 1951, Northwestern University professor Franklyn Haiman established a list of qualities desirable for a leader engaged in democratic processes.

These qualities include social sensitivity, which includes a respect and concern for others, extroversion, and a belief in the value of the individual. This sincere interest in other people is the most important attribute of this type of leader. Other qualities include sensitivity to the basic trends and moods of the group; knowledge and expertise in the area where they are expected to lead; facility in verbalizing the ideas of a group; vitality; maturity and patience.

Susan Story has those qualities. I think you will hear evidence of the qualities throughout my interview with her. These attributes enable her to successfully lead and influence people beyond her corporate authority into the areas of corporate social responsibility and public policy.

Informative and Helpful Links

From the September 13, 2014 The New York Times: Adam Bryant’s Corner Office “Susan Story of American Water: A Job Description Is Just the Start” https://nyti.ms/2jGgWfX

The Bipartisan Policy Center: http://bipartisanpolicy.org The Bipartisan Policy Center is a non-profit organization that combines the best ideas from both parties to promote health, security, and opportunity for all Americans. BPC drives principled and politically viable policy solutions through the power of rigorous analysis, painstaking negotiation, and aggressive advocacy.

Program Guide

Susan Story Interview – “Leading Beyond Authority in Utilities”

0:30 Introduction to Susan Story, American Water and Policy Leadership

1:55 Strategic and public policy priorities for American Water

5:33 Introduction to the Bipartisan Policy Center (BPC)

7:06 BPC: Moving from white papers to practical legislation

7:58 BPC: Addressing aging infrastructure - Public Private Partnerships (P3s)

9:45 BPC solutions and implications on activities of American Water

11:50 Break 1

12:07 Ideal conditions state-by-state to support P3s. Fair market value, single tariffs.

15:20 Measures and approaches to addressing state-level policy matters.

16:40 Break 2

17:00 BPC: Other industries that benefit from the P3 construct

17:50 Barriers to P3s: Bonding capacity - tax-exempt bond defeasance enablers and barriers

19:45 Lyceum’s introduction to “Leading Beyond Authority” and definition of “charismatic authority”

21:06 Susan’s leadership approach to...