The Next Generation:Succession Planning and Talent Management in

a Changing World

Presented by Geoff Isbell, Chief Operating Officer

Passing the Torch - Olympic Tradition

• The greatest resource we have is the wealth of knowledge and experience that we can pass to the next generation…

• We need to pass the torch, now more than ever…

• It should be considered an honor to carry the flame for Natural Gas!

Passing the Torch…

Take Away:

Something to think about…

1. Challenges we face

2. Actions we must take

3. Principles we must embrace

How will you pass the torch?

NextGen Overview

1. Awareness

2. Assessment

3. Action* The Sloan Center on Aging & Work

ENERGY worldnet’s Involvement

Three Necessary Steps

Recruitment, Talent Management and Succession Planning:

Primary Challenges

1.Aging Infrastructure

2.Aging Workforce

3.Limited talent/resources

4.Increased Regulation

The Challenges We Face

60% of utility assets are near the end of their useful service life*

20 -25% of utility assets are past their intended service life*

* CRA International report dated February 2009

Chart from DOT/PHMSA Report on Pipeline Safety

Aging Infrastructure = More Work

CERA estimates that the electric power industry alone will invest approximately $900 Billion for infrastructure projects over the next 15 years.* (Natural Gas will need more pipelines and facilities to meet the demand for electrical power generation)

Outlays of $10 to $20 billion per year could be required over the next 20 years to build new systems and facilities and modify existing ones to bring U.S. oil and natural gas resources to market.**

*CERA – Cambridge Energy Research Associates**Curt Launer, Managing Director of Natural Resources/Deutsche Bank

Aging Infrastructure = More Work

Aging Workforce = Fewer Workers

Center for Energy Workforce Development (CEWD), 2011 Survey

Aging Workforce = Fewer Workers

As 75 million baby boomers approach retirement age, a significant portion of the existing workforce will be leaving.

Beginning in 2005, around 8,000 baby boomers per day are turning 60. Since 2010, half the U.S. population is now over 50 years old.

National Center for Construction Education and Research

Aging Workforce = Fewer Workers

40% of employers surveyed anticipate the aging of the workforce will have a negative or very negative impact on their business over the next 3 years.

** The Sloan Center on Aging & Work

Aging Workforce = Fewer Workers

Talent Management Study

77% of employers stated that they have not analyzed the projected retirement rates of their employees, either “not at all” or “to a limited extent”.

* The Sloan Center on Aging & Work

Aging Workforce = More Training

Talent Management Study

Two-Thirds (68%) of employers surveyed reported not having analyzed the demographics of their workforce, either “not at all” or only “to a limited extent”.

* The Sloan Center on Aging & Working

Aging Workforce = More Training

Talent Management Study

Approximately one-third of employers surveyed reported NOT having enough programs for the recruitment (30%) and training (35%) of workers.

* The Sloan Center on Aging & Work

Limited Skilled Talent/Resources

Talent Management Study

Records from the Dept. of Labor’s Bureau of Labor

Statistics (BLS) show that less than 10% of the 7 million workers in our

industry participate in a formal internship program.

* U.S. Department of Labor, BLS

Limited Skilled Talent/Resources

Taking Action

The battle to attract our future workforce is with other industries that are all competing to attract the same pool of talent.

• 50% - attend college

• 25% - earn degree

• 75% - looking for employment that doesn’t require a degree.

* National Center for Construction Education and Research

Limited Skilled Talent/Resources

Taking Action

We are not attracting enough of the right workers to our industry.

It’s essential to our future that we reach out to our young people and expand career-training opportunities to them.

Career and technical education students can benefit greatly from the opportunities our industry has to offer.

* National Center for Construction Education and Research

Limited Skilled Talent/Resources

Taking Action

Actions We Must Take

1. Creating a Business Casea. Assess current environmentb. Use Succession Planning Templates

2. Developing a Comprehensive Plana. Assessment Centersb. Talent Poolsc. Matching Talent with Roles

3. Knowledge Capture & Transfera. Policy and Proceduresb. Training/Apprentice Programsc. Mentoring

Actions: Best Practices

Actions/Examples: Protocols

Proactive Examples1. High School Recruitment &

Apprenticeships

2. College Recruitment & Internship Programs

3. Gas Operations Schools and Assessment Centers

4. Partnerships with Technical and Community Colleges

5. Rehiring Retired Employees as Trainers & Evaluators

Actions We Must Take

An argument for recruitment and screening:

Puget Sound Energy (PSE)(from article in Western Energy Magazine –Spring 2012)

From 2008 to 2011, PSE recruited for five apprenticeship programs that focused on critical skills and functions at PSEPSE received 3,674 applications1,241 met basic qualification requirements (33% of applicants)Only 500 passed required apprentice aptitude tests (<14% of applicants)

Assessment Center: A Case Study

ALAGASCO – Alabama Gas Corp. Birmingham, AL

Phase I6 month Construction Crewman program

Pre-employment Test (Hogan Personality-Auburn Univ.)Trades Experience & Mechanical AptitudeStructured Interview Process/PanelSkill Assessments every 30 days

Phase II24 month formal Apprentice Program (Journeyman/Master)

Pre-Meter Construction & Service/Post-MeterTrades Experience & Mechanical AptitudeStructured Interview Process/PanelSkill Assessments every 30 days/90 days

Apprenticeship: A Case Study

Missouri Gas Energy (MGE) partners withMetropolitan Community College: Gas Utility Technician

Gas/Tech Schools: A Case Study

Provided all necessary training

Short program: Only 4 weeks

Reasonable Cost

Job placement opportunities

Good pay opportunities

NOT ENOUGH PARTICIPANTS!

Pacific Gas & Electric (PG&E): PowerPathway™

Partnerships: A Case Study

Recognized by…National Commission on Energy

Policy as a best practice program

Clean Edge Clean Tech Job Trends

as an organization to watch

White House/Skills for America’s

Future initiative: PG&E's

PowerPathway™ program is a

distinguished leader in workforce

development.

Public Reference: www.pge.com/about/careers/powerpathway/about/

Mentoring: A Case Study

Mentoring – Learn the job of the man ahead of you and teach your job to the man behind you.

Military – The one who gives the order leads the charge!

Passing the Baton…The success or failure of the team is entirely dependent on the exchange

Learning Organization

1.Systems Thinking

2.Personal Mastery

3.Mental Models

4.Building Shared Vision

5.Team Learning

* Peter Senge, The Fifth Discipline (1990)

Principles we must Embrace

1. Compelling case for change

2. Time to change

3. Help during the change process

4. Removing new/unknown barriers

* Peter Senge, The Fifth Discipline (1990)

Four Barriers to Change

A word of encouragement…

“I was doing my job,” Mitchell said. “But probably

at 201 meters, I heard it and I felt it.”

“Faith, focus, finish. Faith, focus, finish.”

“That’s the only thing I could say to myself.”

Legacy of Leadership

Questions & CommentsQuestions & CommentsContact Info:

Geoff IsbellChief Operating OfficerENERGY worldnet, Inc.

Email: geoff.isbell@energyworldnet.comCell/Text: 940-399-9653Office: 940-626-1941

www.energyworldnet.comwww.energyworldnet.com

Thank You.