Tom Mueller 0:07

Hi everyone and welcome back to the Leading in a Crisis Podcast. Very happy to have you with us today. On this podcast, we share stories from the front lines of crisis management through interviews, storytelling, and lessons learned shared by experienced crisis leaders. I'm Tom Mueller. My co-host Mark Mullen is not with me this week, but will rejoin me again in the near future. On today's podcast, we're going to dive into some uh crisis issues that have affected the Houston area in the state of Texas. For those of you overseas tuning into the podcast, I'm based in the Houston area. And we've had a series of serious weather incidents come through this area over the last several months that have resulted in significant power outages across the Houston area. And our local utility company has come under significant fire, both for their operational response to the incident as well as their communications response. So today we're going to dive in and dissect the operational response a bit and then focus on the company's communications response. And we'll talk about the political fallout that has come to the company as a result of people, residents, customers being out of power for up to two weeks in the heart of summertime here in Houston, where temperatures are soaring up near 100 degrees Fahrenheit. And it's not a time where you want to be without electricity or without air conditioning here in Texas. As with any significant crisis that is caused by external factors, uh, in this case, it was the weather that caused the power outages and a combination of factors that go with that. Because we've been going through drought for the last several years here in Texas. And so that has uh weakened trees and vegetation that live above and around power lines. And so when we had a major storm come through with winds up to 110 miles per hour in some cases, a lot of these weakened trees and other shrubs uh just couldn't take it and collapsed and took out miles and miles of power lines, including some high-wire transmission lines and towers. So we saw just horrific pictures of these hundred-foot-tall high-line towers just crumpled to the ground. We know from the utility company that those lines carried power to about 100,000 people. And of course, rebuilding hundred-foot-tall towers and restringing those lines is not something that's going to happen within a couple of days of an incident. So you knew from the get-go that it was going to be a difficult recovery effort. I don't envy any company that operates at the whim of the weather. And utility companies certainly uh have a lot of challenges uh coming in, as we've seen not only here in the Houston area, but out in western states where power lines uh have been down during storms and caused major wildfires to develop, destroying hundreds of homes out in the western U.S. Many issues that utility companies have to deal with, but you know, that's part and parcel of what they do as public utilities. Now, in the case here in Houston, uh we've had two separate incidents that have affected the utility here, a company called Center Point Energy. The first happened on May 16th of this year, when we had uh significant tornadic thunderstorms come through the area and take down those high line towers that I mentioned earlier, as well as hundreds of large trees that were brought down on top of power lines and transformers, damaging lots of equipment. But then about seven weeks later, we had Hurricane Barrel strike the Houston area with the eye of the storm coming right over the western suburbs of Houston. In fact, I have a great video that I shot of this the eye of the storm almost passing over my home and a view outside showing the winds and wave action on the local lake where I live. So it was been a busy, a busy time for the utilities. Generally, utility companies are pretty good about staging repair crews in the area ahead of big storms like this, so that once the storm passes, they can mobilize those repair crews to start getting power lines put back up and getting the power restored. In this instance, though, the company, the utility company here was caught flat-footed and really did not have crews staged ahead of time. Now that's an operational aspect to the crisis that needs to be addressed. And you you feel a little bit for the company because the track of this hurricane uh was uncertain. It was actually looked like it was going to go south of us, down into Mexico. But then just a day or two ahead of time, that track adjusted and put a bullseye into the Houston area. Now, fortunately for us, it wasn't a huge, huge hurricane. It was just a category one storm. But with the drought and the weakened trees and vegetation, that was enough to cause a serious uh electrical problems across the city. And of course, the challenge was, and the thing that brought the ire of politicians and the customers from the utility company is that it took the company weeks to get the power back on in the dead of summer. That is just horrific. So, in addition to the operational aspect of mobilizing those repair crews, getting power lines back up and transformers replaced, and all of that nuts and bolts of an operational response to a crisis, the communications response left a lot to be desired. And that manifests itself most evidently with the outage tracker map that the utility has publicized and um talked about significantly, their ability to communicate to their customers where the outages are, how many people are without power, and when that power will be restored. Unfortunately for Center Point Energy, we found out during the May 16th tornadic thunderstorm incident that the tracker didn't work. It was overwhelmed very quickly by the number of customers who were logging in and trying to get information. In fact, it became a bit of a laughing stock. The customers were using the Whataburger Hamburger Chains app as an outage tracker to figure out what areas of the city had power, what areas didn't. And so it became, you know, quite the laughing stock issue for the local utility company when their customers are relying on the local burger chain to tell them whether or not power is on or off in certain areas around their homes. In a lot of ways, this these two episodes that hit the Houston area created sort of a perfect storm of uh of crisis issues and lessons learned. Uh, because that first storm on May 16th, uh, it actually hit the downtown Houston area pretty hard and uh broke windows out of a number of downtown buildings. And as it turned out, the headquarters for Center Point Energy in downtown Houston was one of the buildings most affected by this tornadic thunderstorm. In fact, one of their executive vice presidents in an interview said they had lost about 600 windows out of that building. And so, in the immediate aftermath of the storm, they were not able to use their headquarters building to help manage the crisis. So, right away, you've got to go to backup plans for how you're going to manage the operational response, the communications response. You know, are you moving to an alternate location to set up your shop? Is everybody working from home? How is that going to go? Now, as best we can tell, looking in, it did not go well. So we still don't know exactly how the company managed that. Our best guess is they just um sent people home and had them work remotely and used phone calls to manage through the incident. Again, on the operational side of the response, you know, oftentimes when you have a large natural disaster, there will be some form of a unified command set up to help coordinate the response, to help manage communications centrally. Um, because when you have seven counties around the city of Houston that are all affected by this incident, you want to be able to get information out quickly to those county leaders so they can communicate it to their residents in a timely manner as well. We did not see any kind of unified command set up for these incidents. In fact, we didn't see any kind of uh central joint information center or even a liaison officer function in these. Uh to me, that's one of the biggest failings here is the inability of the company to scale up their response to manage the both operational and communications aspects of the incident. We learned from uh an interview, which I'll play a piece of here in just a moment, that Center Point Energy only has two or three communications staff to manage their routine communications. And they did not scale that up for dealing with this major black swan weather events. So, as you can imagine, their communications teams were just running crazy uh trying to generate information, you know, get operational updates, and then communicate that out to stakeholders. Now, you would have expected that there would be daily press conferences with company executives providing updates and giving uh information about you know how they're progressing in their ability and their capabilities to get power back on. We did not see a single press conference in either of the events that I've mentioned, the tornadic thunderstorm in May or Hurricane Barrel came through in July, which just fascinates me that they did not take time to do daily press briefings. In fact, one of the clips I'll play here in just a moment is a local television personality just berating one of their spokespeople for not being more communicative with the media in the incident. That's a valid criticism as far as I'm concerned when I look at the response. That's not to say their communications team didn't do heroic work and heroic efforts trying to keep people informed, but they really appeared to be kind of one-off efforts of doing stand-up interviews with key television journalists from different stations in town. Which, of course, if you happen to be watching that station, that could be that's good information that you're gathering. But if you're listening to the radio or uh trying to get information through the newspaper, uh it's a little bit harder getting that information and getting consistent information when it's being delivered through one-off stand-up interviews. On the clip I'm going to play for you now, we have a spokesperson for Center Point Energy being interviewed by local television journalist Bill Spencer from KPRC Channel 2 News here in Houston. The reporter, as you'll hear, is a bit uh agitated with the spokesperson and fronts her about uh the company not having a dedicated media center to provide information updates to media uh and others. Let's uh let's take a listen.

SPEAKER_02 13:26

Okay, Center Point Energy. You have 9,000 employees, you're a $38 billion uh company, and you service five or six different states across the country. And yet, this massive disaster hit us Thursday night. Why did you not set up a media center, a storm center, where you would have a media person able to talk to us every hour on the hour throughout this entire disaster? That is an industry standard. That's what they do in Detroit, New York, Miami, Chicago. They provide the power company, the primary power company provides a media center so that you guys are accessible to us. You never did that. You still have not done that. Uh instead, you're putting your information online. Why have you not set up a media center and will you set one up now that I am telling you we need one?

SPEAKER_01 14:16

So the reason we haven't set up a media center is the reason that I'm not here with you today is because all of our teams have been focused on getting people restored. And that it is an all-hands-on-deck operation. At Center Point may have over 9,000 employees, but I will share with you personally, our communications department is a tight-knit, hardworking group. And so we are the people that are responsible for the press releases, we are the people that are responsible for communicating on social media, we are the people that are responsible for updating the website, and we're also the people that are responsible for communicating with the community and with the media. And so, honestly, it has been a lot of work for us.

SPEAKER_02 14:52

How many people on your media team? How many people do you have team?

SPEAKER_01 14:55

How many people do we have total on our external team?

SPEAKER_02 14:56

In your media team.

SPEAKER_01 14:58

I mean, it just it would depend on how you count our media team. The communications department as a whole has people that can pitch in in different aspects, but right now in Houston on our external communications team, it is me and one other person.

SPEAKER_02 15:10

Right now, it's two people.

SPEAKER_01 15:11

Yeah, and the two people, yes, yes. I mean because the vast majority of our employees are line workers. Yeah. They have education management crews and have people who work on getting the power restored.

SPEAKER_02 15:24

But ma'am, with all due respect, you as a media person, the people who work in the offices, the people who work in communications or advertising, they are not going to be climbing a power pole and fixing lines. They're not skilled to do that. You're not skilled to do that. I know. The company would never ask you to do something like that, so you can't pitch in in that way.

SPEAKER_01 15:40

No, of course I can't. But that's where the company's resources are dedicated. Our finances, the vast majority of the people that this company hires are frontline workers.

Tom Mueller 15:49

Wow, that was one angry journalist. And he really lit into that spokesperson. Now we can debate whether the journalist is right or wrong in demanding there be hourly press briefings, but the underlying point is made pretty clearly that there should be regular press briefings to keep communities informed, working through the media. And that did not happen in this instance. So their press team took a bit of a beating, but I'll I'll pause here just to give kudos to the folks who from Center Point Energy's communications team who everything I saw, you know, saw them behaving truly professionals and dealing with tough questions, standing out in the hot sun, talking to uh reporters, doing these interviews, uh, or even you know, doing extensive interviews uh over Zoom calls with uh with some reporters providing updated information. And of course, those interview calls are recorded and captured on the TV station's websites. So if you knew they were there, you could go and watch an interview uh sometimes for 10 or 15 minutes and get an update on what was happening. So that's one of my big complaints about how the company went about this, is they clearly did not have surge capacity uh within their ranks to scale up their response, in particular their communications response for a black swan incident like this. And that's a big failing. You know, the politicians uh throughout the state of Texas and in the Houston area have weighed in heavily on this issue. The governor of Texas, in fact, called out Center Point Energy specifically and demanded a detailed resilience plan from that company to fix some of the many problems the governor and his staff identified in the company's responses. I spoke to one uh county emergency operations center manager here in the Houston area just to find out: hey, from the county perspective, a county that had significant damage and power outage from the storm, were you getting information from Center Point Energy? And uh the emergency official told me that they got a little bit of information early on from a government affairs manager at Center Point Energy, but then that manager got pulled into dealing with the city of Houston and Harris County, which is the most populous county in the United States these days, and that took precedence. And so there was no connection to the other outlying counties that suffered significant damage, significant power outages. And so they just, you know, were on their own to figure out what was happening alongside their residents. Now, if you're an elected official and you're not getting information from a company about an issue that is affecting tens of thousands of your constituents, you're not gonna be happy and you're gonna vent. And we saw a lot of that happening. But more importantly, the underlying issue here and the opportunity for personal growth that I see for the company is you know, they've got to have that surge capacity and be ready to scale up to deal with communications for a major incident. Operationally, they have a mindset for that because they eventually pulled in 12,000 additional linemen and vegetation people trimming trees and shrubs and cutting up the trees that had fallen on power lines. So they pulled in 12,000 workers at one point to help augment the operational response to that. We did not see a similar scale up on the communications side. And in fact, for the early phases of both of these incidents, communications were left to the communications team. We did not see senior executive leadership uh at the podium talking about these issues, demonstrating leadership. What we saw was the director of communications or a communications coordinator out doing stand-up interviews with media. So there was no sort of central ownership of the company leadership around this incident. That changed over time. And about two weeks after the May thunderstorms came through, we did see an extensive interview with the executive vice president for Center Point Energy, gentleman named Jason Ryan, who's their executive VP of regulatory affairs and government affairs. And he did a 15-minute sit-down with one of the local TV reporters. And it was a very informative interview two weeks after the incident. So, not particularly helpful, didn't demonstrate leadership at the time of the incident. One of the questions we wrestle with in the midst of a major crisis is, of course, what's the role of the CEO or senior executives going to be? Now, for center point energy, for the first incident, we really didn't see the CEO out in front at all. But for the second incident, we did see more visibility of the CEO. Now, it wasn't in press conference type settings where you would have hoped to have seen him. Rather, it was a series of Twitter videos that the staff recorded out in the field around where the operational response was happening. And they gave him visibility through those videos that were then pushed. out via Twitter. Now that's not nearly as effective or as widely seen as uh standing up at a press conference might be. And so you can take issue with how the company chose to demonstrate that leadership. But you certainly can't fault them and say that they weren't out there trying to communicate. As I've mentioned, there was significant political fallout from the incident. In Texas, what we saw is the state legislature convened a hearing to pull company executives in to demand answers to their questions about what happened here and how is the company going to assure its customers that this isn't going to happen again. And they're going to make changes to make sure that operationally they're prepared to respond to a major incident, that their tracking map is going to be up and running and not crash every time there's a major incident, leaving constituents with no information at all about their response plans or how long their power is going to be out. So significant political heat brought on Center Point Energy from elected officials in Texas. At that point the CEO of Center Point Energy did appear before the legislative committee in Austin to answer questions and take the public beating that was well deserved and well earned because of their operational response. To his credit the CEO did accept responsibility for it and they presented a resiliency plan to the governor as the governor had demanded a few weeks earlier. Unfortunately the governor was not satisfied with the plan that the company submitted and kicked it back to him quite publicly demanding a more robust resiliency plan be put in place. And the governor was very specific about what he wanted and he wanted to see more liaison personnel brought in to communicate with counties and emergency operations centers across the area where the outage may hit may occur. They also demanded additional communications capabilities and that a new senior communications executive be hired to help the company manage communications around major incidents like this. All of those demands are now part of the company's resiliency strategy in addition to hosting a series of town hall meetings to take public input from their constituencies, from their customers. So you see a company with a much different attitude now after the public flogging and making what appears to be real efforts to improve their communications capabilities. The company says they have hired a crisis management firm to help them better execute on crisis plans and to better manage communications around major incidents like this. The proof will be in the pudding as they say and all of us here in the Houston area now of course are going to be watching carefully to see how the company responds in future incidents. And that's going to do it for this episode of the Leading in a crisis podcast. Thanks so much for joining us along this adventure today. If you like what you're hearing please like and subscribe to the podcast and also tell your friends about us as well. And for all of our international listeners thanks for tuning in as well we're very happy to know you're out there and if you've got ideas for podcast topics that we can do that might be of interest to listeners in your country please let us know that as well. And we'll see you again next time on the next episode of the Leading in a crisis podcast.