A mighty power ranger

By MARK STORY


Experience, integrity and people skills - not qualifications - are essential leadership qualities, says Mighty River Power boss Doug Heffernan.

And he should know. Heffernan's technical know-how meant he was always likely to be a high-flyer in the power industry. But his late-blooming people and marketing skills, not his doctorate in power systems, are what has kept him at the top of the electricity business heap.

His decision to broaden his outlook was not so much an epiphany as simply good horse-sense in knowing which way to jump within a deregulated market.

The challenge of competitively pricing and marketing something as boring as electricity was a big call for techno-boys like Heffernan. But the choice was to capitalise on the changes afoot or be overlooked.

Concluding that he could no longer hide behind his charts and calculations, Heffernan seized an opportunity to move out of the backroom.

He believes taking that job in electricity marketing was the smartest thing he ever did. Had he not had the courage to make the change from power engineering boffin to marketer, Heffernan suspects his career would have been prematurely scuppered.

But with electricity supply being process-driven in the mid-1980s, Heffernan's contemporaries thought his dalliance with marketing was career suicide.

"I once worked under a boss who took delight explaining where he was on the Electricity Department's bureaucratic hierarchy, and how long it would take him to become CEO," recalls Heffernan. But when deregulation brought about meritocracy, such bosses didn't survive.

Heffernan owes much of what he's achieved to an industry that's forced him to constantly reinvent himself. Born of Scottish Presbyterian parents in 1953 in rural Southland, Heffernan's start in life was humble: due to a rush on bassinets, he spent the first few days in a hospital drawer.

One of six kids, he travelled an hour by bus to Gore High and rode horses after school, in stark contrast to his later life on Auckland's North Shore.

As the oldest of three boys, it was always implied that Heffernan would take over the family farm, and had it not been for the confidence and leadership he displayed through sport, the farm may have prevailed. During his reign as captain of Gore High School's 1st XI and 1st XV, his rector said he'd have to forgo sports to make anything of himself.

Heffernan severed all ties with the land, but his best sporting days were still ahead of him. While studying engineering at Canterbury University he played one season as fullback for the junior All Blacks, and was part of the 1977 New Zealand Universities team which beat the British Lions.

Bonded to the Electricty Department for five years after it paid his way through the remainder of his studies, Heffernan's doctoral thesis on the impact incidents such as lightening strikes have on power-lines saw him score a one-year secondment with a multinational conglomerate, ABB in Zurich, Switzerland.

"Choosing to live without a TV, I totally missed the 'racial tour' riots of 1981. But Zurich opened my eyes to the applications I'd studied," he says.

As electrical engineer in Dunedin and Wellington during the early to mid-1980s he spent much time evaluating alternative technologies such as wave and wind power. Then he was asked to contribute to an economic think-tank reviewing the impact of economic reform on the Electricity Department.

Impressed with his input, the department's top brass persuaded Heffernan to join Electricorp Marketing - one of the three prongs of Electricorp, the corporatised version of the department.

Being paid to generate marketing options to power boards was totally foreign to Heffernan. But the optimism and human-touch of top brass such as Drew Stein and Electricorp's CEO, Rod Deane, inspired him.

With further industry reform in 1991 Heffernan was appointed CEO of the Waitemata Power Board and moved to Auckland's North Shore. Over the next six years he took the power company through corporatisation, a merger with the Thames Valley Power Board, rebranding as Power NZ, and stock exchange listing.

Managing a publicly listed company meant the naturally shy Heffernan was increasingly assuming the mantle of team-builder, company frontman, board member, and generalist to his management team.

But when two major shareholders joined forces in 1997 and abandoned their hostile bid for control, Heffernan and his management team were ousted. Having remarried a year earlier, he decided to take some time off to lick his wounds.

At the age of 44, Heffernan knew his next career move would be pivotal, especially if he was going to change careers. But the electricity industry was about to pull him back in. After a lengthy stint touring South America with his Peruvian wife, he decided to consult back to the power industry before making any long-term commitments.

Wanting to stay close to his two kids, he then passed up a job in Australia in favour of running what would become Mighty River Power. The job seemed almost scripted for Heffernan. Ironically, the things that attracted him - the interplay with the board, stakeholders and the marketing challenge - were 180 degrees from where he'd started his career.

In addition to managing nine hydro stations on the Waikato River, Heffernan was also charged with selling electricity to 300,000 customers through the retailer Mercury Energy. With blackouts still fresh in Aucklanders' minds, this was no mean feat.

"We've rebuilt this organisation from the ground up," he says. "The real buzz for me was recreating a strong retail business out of the legacy of the past."

The key to running a power company within an unpredictable regulatory environment, explains Heffernan, is something the industry's founding fathers knew little about: flexibility. The technology needed to supply electricity has changed little over the years. But when it comes to unleashing the technology now available at the consumer level, he says this industry is still in its infancy.

"Our business is simple, but what's uncertain is the long-term future of the regulatory environment. If the history of electricity was a 24-hour day, it would only be a few hours old."

Heffernan's convinced that what he's learnt about dealing with people is what best equips him for the industry's opportunities.

"My biggest achievement is watching people who have worked for me look in the mirror, find out who they really are, and actually do something about it."

So does Heffernan's own voyage of self discovery provide useful lessons for would-be CEOs? With the cradle-to-grave career model now obsolete, the trick, he says, is to keep moving ahead without necessarily knowing where you might end up.

"Travel and get worldly - it's experience more than qualifications that count today. Look for opportunities to leverage interpersonal skills.

"Being a good CEO is a three-dimensional thing. You need the right level of ruthlessness to win, while creatively dealing with ambiguity, and integrity that comes from leading by example."

Doug Heffernan's CV

* Age: 50

* Children: Nick (20) and Patsy (18)

* Lives: Milford, with wife Pilar

* Born and raised: near Gore, Southland, with five brothers and sisters

* Attended: Gore High School, Canterbury University

* Top qualification: PhD engineering (Power systems)

* Worked:

1980-81: Power engineer, ABB Zurich, Switzerland

1982-83: Electrical engineer, NZED, Dunedin

1983-87: Transmission development engineer, NZED, Wellington

1987-91: Wholesale marketing manager, Electricorp Marketing, Electricorp, Wellington

1991-93: CEO, Waitemata Power Board, Auckland

1993-97: CEO, Power NZ, Auckland

1998-present: CEO Mighty River Power Ltd, Auckland


* Previous directorships: Tuaropaki Power Company, Electricity Reform, Bay of Plenty Electricity Transition Unit, Grid Security Committee, Electricity Supply Association of New Zealand, Pacific Energy

* Other positions: Trustee, Sport North Harbour; member, Brightspot Board, Rural Electrical Reticulation Council; board member, Electrical Development Association