Commercialism In the Central Station Third Edition November 15, 1911 ARTHUR S. HUET F> ^ 36017 •t '^ ' V . >*<■ - Is Arthur S. Huey Vice-President H. M. Byllesby & Co., Chicago. Commercialism in the Central Station HE central station industry has A suffered too long from lack of the genuine commercial spirit. The real commercial spirit is to sup¬ ply the needs of the public as perfectly as possible. It is along these lines that central station management has shown its greatest weakness. There has been no lack of invention and improvement in the electrical art. Thousands of men have labored suc¬ cessfully to cheapen, popularize and multiply the uses of electrical energy.* In many instances operating com¬ panies have failed lamentably in car¬ rying out their part of the task—in educating the consumer to the proper and wide-spread employment of the products of the inventor and manu¬ facturer. A paper prepared for the Commercial Day Program of the National Electric Light Association Conven¬ tion at St. Louis, Mo., May 25, 1910. 6 Commercialism Instead of the judicious cultivation of the use of electrical energy by the public, too many operating companies have contented themselves with simply offering service and letting it go at that. MUST STUDY PEOPLE’S NEEDS. The endeavor to-dav should not be to search for excuses for wrong con¬ ditions, but to probe into the demands and needs of the consumer and to an¬ ticipate constantly what he wants and can buy advantageously; also to let him know about it. This commercialism in the central station is the force which will do as much as anything else to make popu¬ lar the central station corporation. The hostility and prejudice against utility companies throughout the coun¬ try is largely undeserved. It is caused by a great deal of misunderstanding and a percentage of truth. The percentage of truth runs from zero to proportions in rare instances, which I hesitate to estimate. It is absurd to blame the agitators and the disgruntled and avaricious for In the Central Station / everything. Some of our ills origi¬ nate in ourselves, and the apex of folly is to ignore our own shortcomings. I venture the assertion that at least 75 per cent of public ill-feeling against utility organizations has been caused by the failure of operating companies to take pains to please their customers. I am quite sure that numerous pio¬ neers in the central station industrv launched their enterprises with the idea that all thev .had to do was to install some machinery, string wires on poles, connect up stores and dwell¬ ings—and take in money. Aspirations so devised either have been blasted or reformed so thor¬ oughly that their authors could not recognize them. We used to think that the conditions which make the central station com¬ pany naturally and essentially a monopoly were bulwarks of pro¬ tection. Most of us are now convinced, I believe, that these conditions are in the nature of a two-edged sword. They are every bit as much an ele- 8 Commercialism ment of danger as they are an element of security. Your live manufacturer or mer¬ chant succeeds because he contrives to please the public a trifle better than his competitors. So does the pros¬ perous theatrical manager; the win¬ ning politician. They exist in their respective callings because they make a business of satisfying the consumer and constituent. Usually composed of men more or less unfamiliar with practical utility operation^ it has been necessary for the commissions to studv the conditions very carefully in the attempt to do jus¬ tice. Not a single state commission has yet failed to be impressed with the chief claims of operating companies and to base its decisions upon broad recognition of many principles which companies vainly have tried to have the people understand. Obviously utility commissions may be good or bad, or may be neither. So may the courts; so may every depart¬ ment of government, and it makes lit¬ tle difference what style of govern- In the Central Station 9 ment is in vogue. We might as well tremble at the name of a thousand imaginary dangers as to regard the tendency toward governmental regula¬ tion of utilities with dread and appre¬ hension. CO-OPERATIVE EFFECT VERSUS EX¬ PLOITATION. With all proper regard for the sensi¬ bilities of others, I am a believer in plain speaking. I believe in admitting that things are wrong, when they are wrong, in order that curative measures may be applied without loss of time. With far too many central station companies things have always been wrong on the commercial side of the business. Indifferent management has been to blame—the kind of manage¬ ment which permitted progress to overtake and pass it and to put it hopelessly out of the running. How many managers are at the head of establishments which are pointed out to visitors in showing them the good points of a city? How many central stations are properties where strangers are taken as a matter of 10 Commercialism course in the endeavor to demonstrate the progressiveness and prosperity of the communitv? You know the answer as well as I do. It is ^S^erv few.’’ This is a true statement, despite the fact that our central station companies frequently represent the heaviest single corporate investment in the city. As such our companies should play active parts in the whole commercial structure of the municipalitv. Thev should be made attractive physically, admirable from the point of efficiency and court the voluntarv declaration from everv citizen that '‘Our town has one of the best electric companies in the countrv.” No words are strong enough to denounce the central station manage¬ ment which regards the community it serves as a mere field for exploitation— as a mere machine for the coining of electric service into dollars. An atti¬ tude like this will wreck any organi¬ zation. The commercial field of a public service company represents an oppor¬ tunity to market a product. The act In the Central Station 11 of supplying the demand enhances the entire value of the community. As the community becomes more attractive it grows and develops, and as this change takes place, the value of the market increases. In other words, the central station is a part of the economic scheme of the modern city. Logically, it should profit in proportion to the co-opera¬ tive value it returns to the communitv. SHOULD PARTICIPATE IN MUNICIPAL ACTIVITIES. The central station does far more than most other commercial influence to build up cities and to All them with people, industries and wealth. A prevalent notion that utility com¬ panies do little or nothing to create the prosperity which occasionally comes to them is absolutely wrong. We can afford to spend a good deal of time and 'money eradicating this idea. Even companies which seem to fol¬ low reluctantly in the wake of local development rather than to participate in and stimulate the communities’ 12 Commercialism activities, contribute heavily in the general development. A central station company and its officers, however, should be in the very front rank of the wide-awake individuals and corporations who are planning and striving for municipal advancement. They should lead and point the way. They should employ their talents in helping to solve the common problems confronting their municipality. An operating company has no busi¬ ness skulking along and courting pri¬ vacy. We have no right to ask the pub¬ lic to ^^Let us alone.Our business is the public^s to a large extent, and the public’s business is our business in the same measure, no matter what we may say or do. A central station organization can do far more good for itself lined up with the commercial clubs, the boards of trade and similar broad gauge bodies than it can fraternizing with peanut politicians and wasting valu¬ able time in the attempt to manipulate political machinery. In the Central Station 13 One of our most imperative duties is to prove that the lack of direct competition in the central station in¬ dustry does not result in non-pro- gressiveness nor to the disadvantage of the consumers. We can do this only by exerting our best resources to meet the needs of consumers in the most efficient, pains¬ taking and beneficial way. For competition's sake, let us com¬ bat the wrong economic theories of the socialistically inclined, the twisted facts and theories of fanatics and the assaults of our personal enemies, and do our best to win. And winning in this kind of compe¬ tition, just as in any other, will come by using our brains and taking pains. The time has come to quit regard¬ ing the public as a general nuisance, and instead to treat all consumers with the confidence and respect common to ordinary business transactions. f' The consumer with a complaint should not be regarded as a fool or a crook. He should be accepted as a part of the day^s work to be dealt with 14 Commercialism as cheerfully and as carefully as the most persuasive effort of the new business department. RESPONSIBILITIES LAID UPON THE COM¬ MERCIAL DEPARTMENT. Those who contribute most to the common good should be most liberally paid. To encourage development, there should be a dependable system of compensation. No one knows the extent to which electricity will go in the saving of manual labor, the conservation of fuels and the cheapening of light and power and heat in their most convenient and « adaptable forms. To carrv out the destinv of elec- tricity, we need the talent of the great¬ est number of brilliant minds which can be induced to enter the profession. They must give up many years in preparation. If the best men are to be secured for the technical advance¬ ment of our cause they must be guar¬ anteed substantial rewards in propor¬ tion to their success. It is the duty of those entrusted with In the Central Station 15 commercial responsibilities of the cen¬ tral station industry to see that this guarantee is offered. They must make the business uniformly profitable if they hope to assemble the funds which will reward inventive effort properly by the quick and universal application of improved apparatus and methods. Only by following such a course successfully can men in charge of the commercial side of electric under¬ takings fill their true obligations to the public. This line of reasoning, repeated, is as follows: The public is the party most benefited by improvements in the electric art and lessening the cost of service. Improved and cheaper serv¬ ice can be obtained only by holding out high premiums to inventors, engineers and manufacturers. These premiums are made possible through the profit¬ able operation of the properties as thev alreadv exist. The task laid upon the business end of the industry is very difficult. It calls for fully as much brain power as do the professional departments, de- 16 Commercialism manding a kind of ability just as spe¬ cial in its features as that demanded by engineering. It seems to me far more important that the manager be a good man of business than a good electrical en¬ gineer. If the two capacities can be com¬ bined in one man, the acquisition is highly desirable. Usually the two kinds of special ability are not so com¬ bined. The professional point of view often fails to appreciate vital elements w^hich the man of affairs grasps instinctively. As a rule, the professional mind is not well suited to dealing with the pub¬ lic in purely business transactions— and dealing with the public is one of the largest and hardest of the man¬ ager’s problems. WHAT THE CENTRAL STATION MAN¬ AGER OUGHT TO BE. Permit me to quote from a recent address which I made to the managers and heads of departments of the H. M. Byllesby Companies: In the Central Station 17 “The ideal manager should be a man who understands the public better than the best politician in his city; a man who is versed in practical modern so¬ ciology, and who understands, not only big financial matters and large busi¬ ness ideas, but the lives of the people as well. “Our properties are usually the largest single industry in the commu¬ nity. It is fitting that our managers should take a position among the lead¬ ing men of the city. “The manager should have the widest possible local acquaintance, and particularly should he be in close touch with the leaders of thought, business and progress in his community. He should study the city, its people and its prospects and its needs with unceasing vigilance. “The ideal utility manager should be an integral part of the city; in sympathy with the aspirations of the different groups of which it is com¬ posed and foremost among the plan¬ ners for municipal advancement. “Of political entanglements he 18 Commercialism should keep free. In all local quarrels and controversies he must maintain a neutral attitude, keeping always in mind the principle that it is his duty to serve the whole communitv to the best of his ability. ‘'Too often have I gone into one of our local offices and found the manager pouring over diagrams, charts and figures at his desk, when his time should have been employed to far bet¬ ter advantage in dealing with broad problems of policy and management. “Too many times I have found man¬ agers busy tinkering with some weighty mechanical problem, such as the color which meters should be painted, while important questions of public policy were being totally neg¬ lected. “Managers should be men who can see over their desk-tops, and who re¬ fuse to let their imagination be ob¬ scured and their activities paralyzed by annoying trivialities. They should not be hampered with mechanical and professional details for which they should have competent technical men to handle. In the Central Station 19 '‘To get into the heart of his busi¬ ness, a utility manager must know a good deal about financial affairs. He must be able to plan years ahead and to weigh and consider various ques¬ tions of financing and expenditure. He should understand the terms and meaning of a trust deed, for instance, and should know the best plans for securing additional capital to develop the properties.” These are a few of the things I told our own managers, and I meant every word of it. I have been amazed, disheartened and discouraged time and again with the narrowness and inefhciencv of men who posed as managers of utility prop¬ erties. I have found them railing at men and conditions when thev them- selves were the biggest pessimists and the worst croakers in the communitv. I have observed them sitting like ugly frogs on a log, bewailing the state of the public mind and the cussedness of the consumer, letting their property go to pieces and their services deteriorate, creatures of weak and shameless despair. 20 Commercialis m What is more natural but that peo¬ ple join in throwing the handiest ob¬ jects at the croaker? The impulse is human and common. The people have no use for the men or the manage¬ ment filled with bitterness and in¬ efficiency—devoid of energetic action and confidence in the future. I recognize the fact that in the smaller plants the manager must per¬ form many duties not enumerated in my partial conception of the ideal manager, yet between the technical detail and the question of public rela¬ tions, my advice is to take care of the question of public relations first, for it is by far the most important. It is wholesome for us to try to see our faults as others see them. Try to get the other personas point of view. Let us stop complaining when we our¬ selves are to blame. Are any of us so foolish as to im¬ agine that the business of serving the public with electric service is a task in which we expect a continual suc¬ cession of smiles and kind words and sweet thoughts showered upon our op- In the Central Station 21 erating companies? The complaints, the misunderstandings and a certain ^ proportion of ill-nature are simply parts of the game, to be looked upon f as every-day business problems and to ^ be handled without heat or hysteria. VIEWS FUTURE WITH ENCOURAGE¬ MENT. It is far easier to find the man of professional training to handle tech¬ nical emergencies than it is to discover the individual combining the gifts of the executive and the diplomat—the man who can succeed in popularizing his institution against overwhelming odds. There is a sharp difference between the kind of ability which does things behind closed doors with the aid of science and the kind of ability which satisfies the multitudinous demands, needs and prejudices of a large num¬ ber of people. It does not follow that, because a man is equipped mentally so that he can construct a great central station property, he is the right man to man- i t 22 C ommercialism age the property and to make the un¬ dertaking a commercial success. Let managers keep themselves free from petty details, particularly tech¬ nical details. They should organize their force so this can be possible. Their first duty should be to popular¬ ize the company, and to see that it occupies the position in the community which it deserves, both as a right and as an obligation. It has become a considerable prob¬ lem how to obtain managers and commercial department heads for elec¬ tric properties—men who possess the executive skill,the tact and the breadth of view necessary for the positions. My personal view of the future is very hopeful and encouraging. The fact that a ‘'Commercial Dav’^ has been set aside by the National Electric Light Association is a splendid indica¬ tion of the change which is taking place in the methods of central station management toward the public. During the last year much educa¬ tional advertising work has been done by operating companies. A large pro- In the Central Station 23 portion of it has been effective; none without value. Scores of new business departments have been created and equipped within a short time. 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