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HOW WATER WORKS Susan Story and Linda Sullivan are showing how a public utility can help transform communities and diversify an industry

The Interview Issue

Susan Story, left, CEO and president, and Linda Sullivan, senior vice president and CFO, American Water.-(PHOTO BY AARON HOUSTON)

It’s easy to forget the little things during this busy holiday season.
But American Water Works Co. in Voorhees certainly isn’t overlooking its customers.

As the largest publicly traded water and wastewater utility company in the U.S., American Water provides services to an estimated 15 million people in 47 states and parts of Canada.

Twenty percent of which live in New Jersey.

“Our job is to provide clean, safe, affordable and reliable water and water services to our customers in ways that they don’t even need to think about because they are always getting what they need,” said Susan Story, CEO and president. “What we do is a critical part of every single citizen’s life every day, and we don’t take that responsibility lightly.”

Founded in 1886, American Water — with $16 billion in total enterprise value — has established an industry-leading 7 to 10 percent long-term earnings per share growth goal over the next few years.

“From a financial standpoint, it is a really fun and exciting time to be in the industry,” said Linda Sullivan, senior vice president and chief financial officer.

The company is not only a financial leader, it also sets the example for gender diversity:

Four of its nine board members are women, as are three of its four committee chairs, in nominating and governance, audit and finance and risk.

American Water’s biggest news this year, however, is its acceptance of $164 million in tax credits from the New Jersey Economic Development Authority to relocate its corporate headquarters from Voorhees to Camden.

The move — expected to be finalized by the first quarter of 2016 — will consolidate the company’s Voorhees, Cherry Hill and Mount Laurel locations into one location for nearly 800 employees in the American Water Service Co. and American Water Enterprises when it opens in 2018.

NJBIZ spoke with Story and Sullivan to get the full scoop on the changes they’ve already made to American Water and the changes yet to come.

SUSAN STORY

Company: American Water Works

Position: CEO and president

Family tree: Husband, Joe

School ties: Auburn (B.S. industrial engineering); Alabama-Birmingham (MBA)

When you brag about Jersey to people from out of state, you say: There are so many places that are special, from the shore, to the land in South Jersey, to the vibrancy of the North.

Passion: Water: the beach, boating, water sports, exercise, everything.

What’s something your co-workers don’t know about you: I was an honorary commander of the 33rd Fighter Wing at Eglin Air Force Base in Florida in 2006. I have one hour and one minute of fighter pilot training, and no, I did not pass out or get sick.

                                                                                                   

LINDA SULLIVAN

Company: American Water Works

Position: Senior vice president and CFO.

Family tree: Husband, Tom; daughter, Crystal (28), son, Tommy (24)

School ties: Portland State University (B.S.)

Passion: I love anything with an engine and a motor — especially Corvettes.

What’s something your co-workers don’t know about you: I love to go on adventurous vacations, from zip lining through the Black Forest of Germany, to snorkeling in the Great Barrier Reef, to driving on the Autobahn.

NJBIZ: You both joined American Water less than three years ago. How has American Water’s vision changed since you started?

Susan Story: Our vision is clean water for life. We chose that statement about a year and a half ago because those four short words sum up the fact that our job is to provide a resource necessary for daily life. We thought about every word and about how our 6,800 employees could be part of that vision.

NJBIZ: How is American Water viewing the various water crises across the country?

SS: Thirteen percent of all electricity in this country is used for water; 4 percent of that is used for utilities, such as the pumps and treatments, while 9 percent is used to heat water, wash clothes, etc. We want to be — and we are — a leader in energy efficiency. We have a research and development group of about 20 scientists. We’re very involved in our partnership with the EPA, which helps us partner with foundations all over the world in search of answers to questions such as: How can we improve water quality? How can we develop a smart water system? How can we use more affordable technology? How can we help our customers manage water better? We do serve parts of California, and we’re currently doing a lot with smart water meters to help residents deal with the mandatory restrictions.

NJBIZ: What initiatives is American Water concentrating on in New Jersey?

Linda Sullivan: One of our biggest issues is the need to replace infrastructure. In New Jersey, we have had very constructive regulations that have allowed us to make those investments in New Jersey through the New Jersey Board of Public Utilities. (For example), the Water Infrastructure Protection Act legislation passed earlier this year removed some of the potential roadblocks for municipal water and wastewater systems who are interested in unlocking the true economic value of those systems to sell those assets to investor-owned utilities and use the proceeds for critical community needs.

NJBIZ: American Water has specifically invested hundreds of thousands of dollars into the community of Camden over the past several years — any particular reason?

SS: We are very excited to be a part of the continuing revitalization of that area. Mayor Dana Redd is doing an amazing job helping to revitalize the city. It’s becoming such a magnet for national and international corporations; you’ve got a lot of big players who are choosing to call Camden home.

NJBIZ: Now, with the help of the Economic Development Authority, that list of big players includes American Water.

SS: We will be incorporating all of our corporate and nonregulated New Jersey employees into our new headquarters in Camden. We are currently going through a site selection process and are looking to move sometime around 2018. American Water already serves about a third of the city of Camden. There was a recent competition about who might run the rest of the (water and waste) system, and we also won that competitive bid.

NJBIZ: Seeing as neither of you are New Jersey natives, what brought you to the Garden State to work with American Water?

LS: I came from a 22-year career with the Edison International companies, where my last job was the CFO for the utility of Southern California Edison. I moved from the West Coast to the East. You find your best job when you’re not looking for one. This opportunity was brought to my attention through a mutual acquaintance at a women’s forum that both Susan and I belong to. I had absolutely no plans to move across the country or move careers, but as I looked at American Water, I realized this was an absolute gem of a company.

SS: Linda came on as our CFO with accounting, financial and auditing responsibilities. One year later, she also was our senior executive of operational services, responsible for every organization, from environmental stewardship, to supply chain, to facilities, to information technology, to security.

LS: It felt like a good fit not only to expand my experience from electricity to water, but also from a regulatory perspective. Going from working within one state’s regulatory environment to working with 16 states’ regulatory environments provided personal growth.

SS: I worked 31 years for a large electric utility in the Southeast. Like Linda, I wasn’t looking to leave — I had great opportunities there, having moved up to CEO and president. But a mutual friend who I had worked with for years and board member of American Water kept calling, even though I kept saying I was happy where I was. I grew up in the South, went to school in the South and after 31 years, I took all of that and moved up here. I have never regretted it a single day.

NJBIZ: With the creation of the Talent Management Center for Expertise in 2012, American Water is well known for its broad and diverse hiring practices. How have you contributed to that cause?

SS: The main thing that a company needs to do is hire diverse employees and make sure there is a strong training and development plan for each employee. That creates natural diversity in the pipeline; everyone will be qualified to take the next job.

LS: We are also looking at creating a more formalized mentorship program. As we are putting top performers into new roles, we also need to make sure we’re giving them the support needed to be successful.

SS: Seventy percent of training and development is experiential — only about 10 percent is classroom training and the other 20 percent is coaching and mentoring.

LS: We put together a program this year in which the executive team would be involved in training the majority of our front- line supervisors in the company’s vision, strategies and values. They are actively involved and personally traveling to our leaders across the company to make sure they are prepared to do their jobs and understand the vision.

SS: Our executive leadership team focuses not only on the (talent) needs we have today but also on identifying employees with high potential at all levels of the company. How can we move them around early in their career? How can we provide them with an array of experiences outside of a silo? We act intentionally. We’re good at it — we’re getting even better.

NJBIZ: What was it like creating your careers in a highly male-dominated industry?

SS: I began as a nuclear power plant engineer in 1982, and I won’t even talk about some of the things that I had to go through being the only female engineer at the plant. But here’s the lesson I learned: at first, they’d say, ‘Wow, there’s a girl.’ After six months, they said, ‘We have an engineer that happens to be a woman.’ There will always be some people along the way you should ignore — don’t let them affect who you are. One male colleague didn’t believe women should be engineers. I came to realize that wasn’t my problem; it was his.

LS: Growing up in utilities, Susan and I both had a lot of firsts. We were the first women in our job or leader, and that’s a big change. Women today have women leaders they can look up to for mentorship. My mentors were all men because there weren’t any women in the industry. Susan is the first woman I’ve reported to in my career — I hope our future women leaders can never say that.

NJBIZ: What would you say is your greatest accomplishment in your career so far?

LS: I have had individuals sponsor me along the way that really believed in me. I’m proud to sponsor people and put them into positions that I can watch them grow.

SS: I get the most joy from developing someone to do more and be more than they thought they could be. People love to be winners. They love to do things the right way and there is nothing like seeing someone be successful and take joy in what they’re doing. It’s so great to deliver those results and have people feel great about themselves in the process.

E-mail to: megf@njbiz.com
On Twitter: @megfry3

Meg Fry

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