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The Moment explores the pivotal moments that changed the lives and careers of the world’s leading CEOs and defined their leadership journeys.
Claire Blake (00:05):
From World 50, this is The Moment where we explore the pivotal moments that changed the lives and careers of the world's leading CEOs and defined their leadership journeys. I'm your host, Claire Blake. Today we are talking to Patti Poppe, CEO of PG&E.
Patti Poppe (00:23):
I just stepped in and I made some important fundamental decisions early with limited data. I did not have time to do a big analysis. The company was in crisis. And as I reflect on that, it was quite effective. The standard is not perfection. The standard is perseverance.
Claire Blake (00:40):
Patti shares her experience taking the helm of a company in the face of unspeakable tragedy and how a positive shift in her leadership mindset is bringing out the best in her team.
(00:49):
If I'm not mistaken, your father was an engineer before you. Did he encourage you to pursue STEM? Was there any kind of family linkage there to what you wound up pursuing?
Patti Poppe (01:03):
Oh gosh, my dad had seven daughters and I was his last ditch effort to get an engineer out of the bunch. So he pulled out all the stops. He definitely wanted me. I wanted to be a TV news broadcaster, Claire. He said, "You'll never make any money. You're too good at math and science. You got to go to engineering school." And so he really encouraged me and it opened my doors. And I think very seriously, he took a stand for my future.
Claire Blake (01:30):
So that's an interesting backdrop to the fact that he worked as a nuclear engineer at CMS Energy, which you later became the CEO of. So how did he react to that?
Patti Poppe (01:41):
He was so proud. That's my hometown. And it was so wonderful to lead the people of my hometown, so many of whom I had grown up with and never thought I was going to leave. He really was just very proud of all that.
Claire Blake (01:54):
What was it like being the youngest of seven sisters?
Patti Poppe (01:59):
It was wild. They're great women. I was very blessed, really.
Claire Blake (02:04):
Did someone steal clothes from you?
Patti Poppe (02:06):
No. They didn't steal my clothes. I had to steal theirs because those were the only ones I got. I wore a lot of hand-me-downs.
Claire Blake (02:12):
In context for what we're going to be discussing today, I'm cognizant it's one thing to become CEO of a company and a culture you know well. I mean, in this case, you've got a longtime family tie. You were an internal successor within the organization. It's another to come from the outside, which you did now sitting at the helm of PG&E. So I want to give a little bit of context as what we know was happening at the time that you became CEO of PG&E. You're a few years in now, but there's a little bit more context. You joined at an incredibly tumultuous time. The company had just emerged from bankruptcy, was still under federal probation from a 2010 natural gas explosion. You had equipment that started deadly wildfires, including the Camp Fire in 2018, where at least 84 people lost their lives. And you're coming in as the new CEO, which if I'm not mistaken, the third in about four years, the fifth, if we include the interim CEOs.
(03:11):
So it does kind of beg the question, what in the world made you take the job?
Patti Poppe (03:15):
Well, that's a great question. I often ask myself. At the time, I was really in my dream job and living a great life in my hometown and leading my hometown utility. And when the PG&E team called, and particularly our board chair, Bob Flexon, I just realized that they needed help and they needed my help. In fact, when they drafted the job description for the CEO, and they had been on a search for some time and I had actively declined, they sent me the job description and Bob Flexon said, "Patti, just look at it. I just want you to see it. I want you to know what we're looking for. We really think that you're the right person for the job." So I printed it and I handed it to my husband and he looked at it and he said, "Oh my gosh, did they do a custom job for you? This is what you're good at." And I said, "No, I think this is actually what is required at PG&E." And he said, "Well, I guess we're moving to California." So that's really how it went.
Claire Blake (04:17):
That fast. Honestly, that much of a reaction. Yeah, there's probably a little bit-
Patti Poppe (04:21):
There was more to it. It wasn't a five-minute decision, but we just realized that America needs a strong utility sector and the challenge of our generation is transitioning and decarbonizing the economy. And PG&E is in the heartbeat of the leading state with the leading ambitions and the leading distributed energy resources and the leading policy. America needs PG&E to be strong. The world needs PG&E to be strong because how we do this will set the blueprint for the world and the nation at a minimum. And I realized that it was an opportunity to have a much greater impact on the world than staying to my comfort zone, which I was definitely in my comfort zone. So I stepped widely out of it in pursuit of something important for the world.
Claire Blake (05:15):
I'm assuming as a Fortune 500 CEO, you've gotten many opportunities coming your way, even in a short stint. That's what happens. You get the job. All of a sudden, you're extremely marketable for a lot of things. What was on the job description in particular or what were some of the key points? You mentioned how important it is, but I think we also just discussed all the things the company was facing. So what were some of the things in particular that Eric saw about you that he thought was such a fit?
Patti Poppe (05:43):
Yeah, I think the big thing was the need for a very operationally focused CEO. I was pretty clear with the board, if this is a financial turnaround, I'm not your gal. That's just not my jam. But if this is operational, organizational, cultural, people-driven, rebuilding of something, that's what I love. And I was at CMS for a little over a decade and was involved in a turnaround there. Previously in my automotive experience, had done a lot of turnaround work. So I really do love creating order out of disorder and bringing people to a place where they can believe in themselves and again and deliver something again. And the lean playbook that I learned back in automotive is so essential to driving operational excellence and really bringing an organization, bringing out the best of the organization. That's really what was required. And so my experiences as kind of unusual maybe as they are, really led to this moment.
(06:44):
And then the intersection of electric transportation, automotive and energy, it's just a unique combination of things that really told the story that this was the right time for me to be here.
Claire Blake (06:57):
This conversation is all about pinpointing a moment that has really defined you as both a leader and a person. And in my understanding that from kind of a little bit of context of what you just shared, that moment occurred very quickly for you at PG&E on the very first day on the job. Tell me a little bit about what you walked into day one.
Patti Poppe (07:18):
Well, I had done obviously my homework and had talked to a lot of people and had observed from afar what was happening here. But following the Camp Fire and the town of Paradise, the company was rocked to its core and we had a massive rebuild to do both of our infrastructure and our trust with our customers. And so on my first day I did one, I stopped by the union hall to say hello to the union presidents. And I showed up in my pickup truck by myself, walked in their front door and they were like, "Who are you? What is happening today?" And so I wanted them to know how important our relationship was going to be. And so then the union president and I went up to Paradise together and to see the devastation. It had been a couple years after the fire and it was still what I would describe as apocalyptic.
(08:13):
It's just the worst kind of scene that you can imagine. And I was so amazed by the people I met that day from PG&E who were so resilient, many of them who grew up in that town, lived nearby, had all sorts of reasons to lose faith in the company. And instead they wanted to stay and make it right and make it safe.
Claire Blake (08:38):
Had anybody prepared you for what you were going to see? I mean, had you gotten any advice on the approach or kind of anybody painted a picture for what you were about to walk into?
Patti Poppe (08:49):
There's a couple documentaries that have been made, and of course I watched those and they're pretty graphic. I saw pictures and articles and read everything I could and talked to a lot of people, but there is no substitute for standing there and seeing the devastation. You can't understand until you stand there. And it was just so eye-opening to me and the need for us to commit to it never happening again.
Claire Blake (09:20):
And I mean, obviously we've already talked about your husband. What did you tell him when you went home that day?
Patti Poppe (09:27):
I think I just cried.
Claire Blake (09:34):
I know it's hard to talk about.
Patti Poppe (09:42):
I feel for my people who they're so resilient and so committed to making it work and making it safe, but that community was devastated and they're strong and they're resilient too and they're rebuilding, but it takes a long time. And I don't know, it just changes everything.
Claire Blake (10:12):
I know for you, there's probably just a deep sense of accountability, even day one, in the sense of the word that I don't think anybody could feel unless they were you. You've already told us about a piece of kind of almost practical advice of what to do. What changed for you when you went back to the office?
Patti Poppe (10:34):
The seriousness of it was much greater than I expected. Just figuring out how to deal with that and know that you can make a difference. And so I called one of my board members is a four star admiral, Mark Ferguson, CNO of the US Navy, a wonderful leader and amazing guy. I can't even believe he's on my board and in my circle. And I realized that a military man would understand the gravity of the situation. And so I called him and he said, "When you have command of an operation, you have to ask yourself, is it safer because you're there?" And I could see that we were putting the building blocks in place to make transparent where our vulnerabilities and risk was. Legislature passed some new financial protections as long as the organization delivered on our wildfire mitigation plan. And so Admiral Ferguson asked, "Is it safer because you're there?" And I could unequivocally answer yes, and it's getting safer absolutely every day, like absolutely every day it's getting safer.
(11:40):
And he said, "Well, real leaders thrive in that environment."
Claire Blake (11:43):
Wow.
Patti Poppe (11:44):
I was like, "Ooh, okay. This is me thriving." Okay.
Claire Blake (11:49):
Is this me thriving?
Patti Poppe (11:50):
Wow. All right. Let's reposition that thought in my head. And actually, it's so interesting. He said one other thing too. He said, "Look, in every great mission, there are setbacks. The standard is not perfection. The standard is perseverance." And he said, "Patti, I've studied every great mission ever in the history of the military. I'm telling you, it's the leader who refuses to give up and an appreciation that there will be setbacks, but you're better because you're there." And that took the weight of the world off my shoulders. I felt empowered and like I am the right person at the right time. Let's go get it.
Claire Blake (12:26):
I want to settle for a minute in the fact that we mentioned earlier that you became PG&E's third CEO in about four years, fifth, if we include the interim CEOs. This wasn't your first time. And I have to imagine that was super helpful to you to know that you were the leader in this very moment. What did you do differently coming in this time than you might've done at CMS? How did you establish yourself as a leader within the company at this moment in the company's history?
Patti Poppe (12:57):
So the context of CMS was I was an insider, I was going from peer to boss. It happened a little earlier than everyone expected because my CEO had a health situation that caused him to accelerate his retirement. He's doing great and he's very healthy. He's the chairman of the board and is a superstar, but at the time decided he didn't want to be CEO. And so there was almost a little bit of apologetic taking of the helm. And from peer to leader, it can be a very challenging transition. And I wanted to tell myself it's all the same. I'm still Patti and they're still them. And we're a great team now. We'll be a great team with me as their leader. It's no big deal. What's the big deal, CEO? It's still me. I know the culture. I know the people.
(13:47):
It's .. choice, kind of no big deal. Well, I was wrong about all that. It is a big deal to become the CEO. And so I probably lost some time being apologetic about being the leader. Now, we didn't have a crisis. And so was it ... We had great performance and wonderful things happen and I had the most amazing time leading that company. It was very hard to leave and I still miss the people every day. But that whole time required one thing and this PG&E situation required something else. I did not have time. There was no apology required. It was like, get busy. I was much more decisive. I had to hire an entirely new executive team. I just stepped in and I made some important fundamental decisions early with limited data. I did not have time to do a big analysis. The company was in crisis.
(14:39):
And as I reflect on that, it was quite effective. It really mattered. People needed that definitive leader unafraid to lead. And I think sometimes as leaders, we, from a place of humility and from a place of just not wanting to be too self-centered, play down our role as leader. And the reality is as leader, you unapologetically have to lead. People want to follow someone. Someone they can see, someone they understand, someone they know, which means you have to tell people about yourself, which means you have to be expressive about what you think. You have to share your thoughts, which means you have to do a lot of talking. And I know people say listening is so important and it is, but at some juncture, people want to be led and they want to know what's on your mind.
Claire Blake (15:31):
I'm going to go back to something that you said because you've mentioned that the standard is not perfection and there's going to be setbacks. So I want to talk about one of those because it's one thing to walk into a scenario that wasn't under your watch. It's another when something happens on your own watch. So July of the year that you joined, the Dixie Fire happens. How did that change things for you? Give me a sense of where you were when you got the news. With you being at the helm, how does this play into the equation of everything we've discussed so far?
Patti Poppe (16:04):
Yeah, that was a game changer for us — for me. We get notifications every day about fires that have started in our service area. So daily, this might horrify people, but I get two or three texts a day about a fire that started, not necessarily because of our equipment, but we have all this monitoring equipment now across the state. We have cameras, all these things. So we know about every fire. And we always look for a couple things to quickly determine if our equipment was involved at all in any way. And this one was a very strange one, but long story short, it became apparent that our equipment was involved to the degree that a tree that we had inspected multiple times came on a line in a very deep canyon. It was very hard to get to. One of my coworkers worked valiantly trying to get to that tree and the fire let go and it ended up being the second largest fire in California's history.
(17:02):
We knew at that moment that we could not go and our closest service yard was Chico and this line was in the Feather River Canyon, which is not far from where the Camp Fire started. I knew that I could not go to Chico, California and tell them that PG&E would try harder, like nothing. I had to tell them what we were doing. Now, fortunately, after that first day in Paradise, when I learned about or was recommended by the team that we should be burying the lines, we did some really great work with my officers and one of our lawyers came to me one day and said, "We need to bury the lines, Patti." And so we had come up with a plan internally that we were going to bury 10,000 miles of line. That had happened back in April, May timeframe. Well, here it is, July, and we hadn't socialized that plan with anyone.
(17:53):
We hadn't told really anybody other than we were putting the pieces of the plan together internally. And so I said to the team that day, a couple days into the Dixie Fire when we could see what was happening, I said, "We got to tell them we're burying the lines." This infrastructure is a decision and the standards for what is safe infrastructure does change as environmental conditions change. We had to do it. So I went, I called a press conference against everybody's better judgment, and this is sort of the unapologetic leadership part. As a leader, sometimes you just have to take a stand and lead.
Claire Blake (18:31):
I think there's a lot of power in that moment where everybody's telling you not to. You're at the helm of the company. You have very strong convictions. How do you walk through that moment of, no, I believe in this and I'm making this call and I'm saying it? What is it about your gut and conviction if there is such a thing that you could help us understand that we could take within our own roles and our own lives as the human behind that decision?
Patti Poppe (19:00):
Every great innovation, every great accomplishment, every great achievement took somebody saying it first. I mean, great leaders lead and they have conviction and they don't just stop by saying it. And here's, I think, the place where people get tripped up, but you do have to say it and then you have to work like hell to make it happen.
Claire Blake (19:23):
And I 100% agree with you, but with all due respect, you show emotion. There are other leaders who have those convictions who turn a lot of people away along the way into the journey. I have to wonder, how do you deal as the face of the organization, the heartbeat of the organization in many ways and the way you've even expressed things today? How do you deal with the criticism? How does that manifest in you?
Patti Poppe (19:50):
I have a saying, it's part of our purpose here at PG&E. Our purpose is delivering for our hometown, serving our planet, and leading with love. And people know that leading with love is a phrase I've used for some time. It's not unique per se, but it's definitely in the front of my leadership approach. And I think for me, leading with love in this case, in the context of your question, means understanding that people are going to not believe at first and having a deep sense of empathy for where people are and understanding that you have to lead them through it.
Claire Blake (20:28):
I'm going to ask just one more follow-up question on that, which is just, it's one thing to say it. It's a long journey that you're on. How do you lead with love and instill patience on that journey with your stakeholders, your customers, your employees? Is there a lesson here on how you continue to do both because this problem's not going to be fixed tomorrow?
Patti Poppe (20:49):
Yeah. I think there's a really important lesson here. And I learned it probably mid-career for me that I used to be one of those people who could ... And I still am, I have a healthy dissatisfaction with the status quo. And so I'm always seeing the things that need to be better, need to be different. And it used to occur for others with me that nothing was ever good enough. And so that healthy impatience came off as, "I'm not good enough, you're not good enough, it's not good enough." And that's not very fun, actually.
(21:20):
And I had a very important pivot about mid-career where I sort of traded up to a different way of thinking that was more in the space of possibility. And instead of saying to people, "How come we didn't do this? How come this isn't good enough? Or why aren't our numbers better?" I shifted even just my language, but also my thought process, but the language would come out in the form of, what would be possible if we were X percent better? What would be possible if we achieved this extraordinary outcome? That change in my own thinking enables amazing ideas. It enables people to try stuff and that whole fail fast thing and the scientific method of problem solving to have a hypothesis, try it, test it, eliminate it, rule it out or rule it in, but believe that anything is possible. I have learned that when you lead people from a place of possibility, unimaginable things can happen.
(22:17):
The breakthrough outcomes are possible and it is so much more fun and it gives me the encouragement to push the team to do more than they can even imagine themselves, but love them through it. That they're not bad, they have infinite possibility that they haven't yet discovered. Those are two very different places to lead from.
Claire Blake (22:39):
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