When Leaders Lack the Knowledge to Lead (Podcast Episode 66)

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Here’s the situation: You and I are screening candidates for an important job, and we need to make sure we select the very best person for the position.

Let’s make believe that every house in our country is connected to a huge water supply system.  There are thousands of lakes, rivers, and streams that supply water for the system, and millions of homes and businesses that draw on the water system for drinking, cooking, cleaning, and all kinds of industrial purposes.

Let’s also pretend that we’re not allowed to store the water; we have to draw it from the spigot as we consume it.  This means it’s critical that our water supply be reliable and virtually uninterruptable.  If the supply were to be interrupted industries will have to shut down and people won’t have anything to drink.  If an outage were to last very long then people will get desperate and some may even die. Because our national water supply is so important to our survival and our way of life, our government has decided it would be wise to put some regulations in place to ensure the system is reliable and secure, and to make sure business transactions for water remain fair and above the board.  This is the job we need to fill: The head of this important government agency.

So before we start to screen candidates we need to think about the core competencies and knowledge the applicants for the position need to have:

  • First of all, candidates or this position need to have a firm technical grasp on how the water system works.  Without the requisite technical background they’ll be unable to make wise, informed decisions.
  • The person for this important job needs to have leadership experience because this government agency employs many thousands of people and prior leadership experience will ensure the organization runs smoothly and efficiently.
  • Also, the candidates need to understand the principles of water laws and regulations, because this government agency’s role is to apply and interpret these laws.
  • Finally, the leader of our Federal Water Regulatory Commission needs to be fair and unbiased because the opportunity for abuse of power and influence is great, and the consequences even greater.

Guess what – we have our first applicant for the position!  She has a Masters Degree in mathematics and a law degree, and is an attorney.   She has 30 years of experience in a very successful private law practice representing clients in the water business.  Her clients have been mostly wealthy individuals, companies, and politicians with interests in a small but growing part of the water business; they own or have interests in tiny creeks and ditches that are scattered all over the countryside.  For years this group has been trying to make it in the water business, but they laws of nature are against them.  The amount of water flowing in each creek is too small to be of much use, and it flows intermittently.  It is very expensive to capture all the drips and trickles from the creeks and pump it into the national water system. As a result, these water suppliers have not been able to compete with the larger streams, rivers, and lakes that provide most of the nation’s water supply.

The proponents of using creek water hold out hope and belief that some day the water the tiny creeks will solve all our water needs.  They argue that if we add up all the trickles from all the millions of creeks across the country that it could replace all of the other water sources.  Our candidate for the head of the Federal Water Regulatory Commission has made a good living representing these people and she has developed a reputation as someone who can help them get their product to market.  In fact, she has helped change the laws in some states to give her client’s creek water an advantage over the suppliers of river and lake water.

The candidate definitely understands the legal side of the water business, but let’s look at the other job requirements.  Other than her successful law firm, she has never managed an organization so without other experience to show we’d have to say she does not have the experience to lead such a large and complex organization.  She obviously has some technical knowledge of how creeks and ditches work, but her formal education and work experience would concern me.  She may not understand the operation of the rivers and lakes that supply 98% of the water.  The last job requirement is her ability to be fair and unbiased – something that she has not proven in her prior experience of representing the creek water industry.  The bottom line for me is this: I would have serious concern about this candidate’s ability to the job.  In a pinch I might decide to giver her a trial period but if things did not go well we would end the probation and find another candidate.

By now most of you have probably caught on to my analogy.  We don’t have a Federal Water Regulatory Commission, but we do have one that regulates our electrical energy supply system.  It is called the Federal Energy Regulatory Commission (FERC), and the new Chairman is just the kind of person I have described.  Jon Wellinghoff is a career lawyer from Nevada, the home state of Senate majority Leader Harry Reid.  He has spent the last 30 years representing renewable energy companies and politicians with interests in promoting renewable energy.  In fact, he wrote the Nevada Renewable Energy Portfolio standard.

The nation is in big trouble!  Based on some recent remarks, Jon Wellinghoff lacks even the most basic understanding of the laws of physics or limitations of the national grid he is tasked with regulating.  At an energy industry forum this week Wellinghoff stated he believes there will never be a need to build new base load power plants and that wind and solar power will be able to meet all of our energy demands.  When referring to the need to build new coal or nuclear plants Wellinghoff responded, “We may not need any, ever.”  His answer implies he believes we can reduce our energy demand dramatically through efficiency and changing behaviors, and that we will grow the renewable energy business from about 2% of the market to almost 100% in the next thirty years as today’s coal and nuclear plants are retired.

He spoke about “shaping” the energy output of intermittent wind mills and solar panels which implies being able to store large massive amounts of electricity and transporting electricity over vast distances.  Neither capability exists!  That kind of battery storage is not even on the horizon.  And although high capacity ultra-long distance transmission is technically possible, it is years (perhaps decades) away from being a reality, and would be massively expensive.  The NY Times reported a few weeks ago that those kinds of grid upgrades would cost over $100 billion and take many years to accomplish.  A host of industry experts with a wide range of backgrounds have condemned Wellinghoff’s comments as ignorant or just plain silly.

Jon Wellinghoff has proven that he is either ignorant of the system he is charged with regulating, or is acting in an overtly biased fashion to promote the agenda of his former clients.  Either one disqualifies him from fulfilling his responsibilities to ensure our electricity supply system remains reliable, safe, and fairly regulated.

President Obama should ask for Jon Wellinghoff’s resignation or should remove him from his position as Chairman of the Federal Energy Regulatory Commission and replace him with someone more knowledgeable, level-headed, and unbiased.

Author: John Wheeler

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