by Michael McCullough, Edelman
College football’s big-time programs have as much at stake as any other billion-dollar enterprise; and the associated scandals demonstrate a culture of playing fast and loose with rules and regulations.
Compliance doesn’t equal security, in football or with utilities. On the gridiron, the University of Oregon demonstrated recently that minimum compliance to keep the school and athletic department out of trouble, with the NCAA was not enough, especially when it found it had committed numerous violations. To address this, the university is proactively thinking ahead and setting the bar higher, announcing it would hold its program accountable to the most stringent standards in the sport, well above what the NCAA mandates. The contract between the university and its new head football coach contains an unusual set of specific provisions related to NCAA rules compliance, including a requirement that he “actively look for red flags of potential violations.” Such an exhibit did not exist in any of the three iterations of the previous coach’s agreements.
The utility business could learn a lot from the University of Oregon.
In May, I attended the Department of Energy’s Consumer Engagement Working Group planning session in Denver. This group continues to refine a template that utilities can use to engage consumers. One of the primary recommendations to come will be education covering customer and citizen benefits, and concerns from A-Z. When it comes to smart grid, there’s no shortage of security, privacy and health concerns.
If you’re from a utility, ask yourself: How prepared are you for consumer questions about security, privacy and other concerns? Are external consumer advocates ready to be mobilized and speak on your behalf?
Grid modernization technologies are shifting the utility-customer relationship. With a primary focus on regulators, utilities can’t afford to overlook consumer opinion and expectations about how their information is used, stored and secured. Reputational damage already has been done for some utilities in news coverage about smart meter health concerns and fires.
Any consumer backlash will invite more regulatory scrutiny. Understanding key stakeholders and increasing trust will proactively ease the regulatory burden. When consumers read headlines claiming 40 percent of cyber-attacks target the energy sector, the next logical step is to begin asking for information on how they are protected. How data is managed, kept private and secure will change in the wake of these technological advances.
The biggest utilities, and those looking to demonstrate innovation, need to evolve beyond a culture of compliance.
Utilities should embrace enhancing relationships with customers. According to Edelman’s “Privacy & Security: The New Drivers of Brand, Reputation and Action Global Insights 2012,” security and privacy are important to people and businesses must be more accountable for managing the information they collect. Some 85 percent of customers say that businesses need to take data security and privacy more seriously.
Engagement activities with local, regional and national organizations that acknowledge and consider consumer privacy and data protection might seem daunting. Utilities would be wise to seek advice on how to break this down into something manageable so that that they are prepared to activate in situations that pose a risk to their reputation.
In addition, the messenger is just as important as the message in utilities’ engagements with customers. Customer service and stakeholder education often reside within different utility departments, which can create a delimma. Utilities should consider adjusting this model. The new energy dynamic likely will mandate these two functions work closer together. Add that to the privacy and security advocates now informed and speaking on your behalf, and you get the positive halo deserved. When you inform the right audiences, you’ll be rewarded when they speak positively and with correct information.
A modernized electrical grid will benefit the end customer, but the story of how that will happen is as uncertain as the outcome of a third-and-long play call. Relying on compliance alone is conservative and risky. But if you engage the right stakeholders now and tell them what they need to know, you can play offense and call the plays rather than sit back and rely on defense to save the day.
Michael McCullough is a vice president in the corporate practice at Edelman, the world’s largest independent public relations firm. His clients are leading the global smart grid discussion and educating consumers and customers about how these technologies will convert energy challenges into lasting solutions. Reach him at email@example.com or on Twitter @mikeymc50.