In this week's Spotlight on Bay Leaders, Hawke's Bay Today reporter Andrew Ashton talks to Unison Networks chief executive Ken Sutherland about the challenges behind doing business in a regulated industry and his thoughts on the future. Headquartered in Hastings, Unison owns, designs, manages and operates the electricity network that serves the Hawke's Bay, Taupo and Rotorua regions. The network spans almost 9000km and supplies more than 110,000 connected customers with approximately 1590GWh of electricity per annum, making Unison one of the larger electricity distribution businesses in New Zealand.
What are the major differences between running a company within a regulated industry compared to a non-regulated industry?
While there are obvious differences within a regulated industry – such as having a larger number of stakeholders to address and more compliance costs – we only see small differences between regulated and unregulated industries; differences which are getting smaller over time.
In competitive markets, successful businesses focus on meeting their customers' needs, using innovation to stay ahead of the pack and through a conscious effort to take good care of the people that work in the business – you can only deliver exceptional service with good, engaged people.
Unison continually seeks to be innovative and industry-leading with technology as we are acutely conscious that new technologies – such as solar, batteries and home energy management – will have a significant impact on our business, well within the lifetime of our key network assets.
What advantages or disadvantages lie in operating a large company across several different geographic and council boundaries?
Scale is the key factor in creating a strong value proposition for our consumers. With a large-scale operation across multiple regions, you can afford to have more specialists, it lessens concentration risk, and allows capabilities we wouldn't be able to access across one regional area.
This approach to managing the business allows Unison to attract and retain the right talent to maintain the continuity and reliability of our network.
Business factors that we must manage well do come with the territory of large-scale operations. For Unison this includes various environmental, atmospheric and geological conditions across its regions, multiple local government planning and compliance requirements and logistical factors such as ensuring that our people stay connected across our geological spread.
As much as possible, we try to use technology to overcome the challenges that distance brings. We've invested in high-quality video-conferencing facilities, which have paid for themselves many times over in avoided travel between our network regions – Rotorua, Taupo and Hawke's Bay.
What are the major challenges you foresee for business in the next 10 years?
In my view, there are three significant challenges facing the industry. These are primarily around ageing assets, changes in customer behaviour and an ageing workforce.
The condition of assets in the electricity sector is deteriorating fast due to limited asset condition knowledge and as a result, under-investment. Unison however has done a lot of work over the last 10 years to gain a good understanding of the condition of our assets. Firstly, by utilising advanced sensors and artificial intelligence to increase our asset condition knowledge and secondly, through the enhancement of its asset management practices where Unison has become the first electricity distribution business in New Zealand to achieve international best practice asset management ISO 55001 certification.
The growing affordability of new technologies – solar, battery and electric vehicles – is driving different customer behaviours and increased power quality expectations. Unison is embracing this challenge and is investigating new ways to engage with its customers and to ensure we can meet their expectations, either by strengthening our network's resilience or by working with them to explore alternative energy options.
In future, instead of just making expensive upgrades to our assets to meet new demand, we foresee that we will also be able to call on things like customer-owned and distributive storage batteries to meet localised demand. This will require us to transform from a business managing a one-way flow of electricity from the national grid to people's homes and businesses, to a complex management of our network and distributed resources. This is an exciting future and, with some of the core capabilities we've been developing in our smart network, one we're excited about meeting.
With an ageing workforce, and several key roles listed on Immigration New Zealand's Long-Term Skill Shortage List, Unison has this year more than tripled trainee numbers across its network regions. Ensuring the experience, skills and knowledge of our experienced cohort is passed throughout the training and development of these trainees is critical.
What do you feel New Zealand needs to do to attract more highly-skilled workforce to regional centres?
While there is no easy "silver bullet" solution, greater employment and growth opportunities in regional New Zealand are generated through creating relevance, to entice businesses to set up here and attract the right people.
An environment needs to be created which sells regional strengths such as lifestyle benefits, good connectivity through technology and fostering strong regional links – for example the increased frequency and reduced cost of flights due to competition.
To allow our regions to prosper while supporting this ongoing growth, the right infrastructure must be in place, requiring a co-ordinated effort from all major local players including councils, infrastructure providers and government agencies.
Over the years Unison has been fortunate to attract and retain high-calibre people. This is mainly due to the culture we have created – based on innovation, excellence and learning – and through providing a stimulating work environment in a beautiful part of the world. Another key element to our success is that we inject local potential into our business on an annual basis, such as by awarding scholarships to students in their final year of school. Once they have completed their studies, they return to our region and start their new career with Unison – close to family.
When did you first know you wanted to enter the world of business?
While you start to have a view from a young age – I was brought up on a farm and originally wanted to be a vet, until I knew what they did – true perspective comes once you have responsibility for your life. This started to evolve in my late teens, which somehow saw my first job being in finance.
I knew I wanted to gain a reasonably rich experience of business and as such, I've gathered a diverse commercial background in the financial, retail, manufacturing, import and export, and infrastructure sectors. The types of organisations I have worked for have given me a depth of experience that has proved invaluable in overseeing the Unison Group of companies.
I came across the energy infrastructure sector while working as part of a team that started the commercialisation of ports in Wellington, when looking at developing a local distribution business. This fascinating journey led me to Transpower, where I worked with generators, power distribution businesses and major electricity users across New Zealand. It became clear that electricity leads to economic growth, which landed me at Unison.
I've always sought a career with a strong purpose behind it. Working in this industry is fulfilling and rewarding as, like all infrastructure, getting the job right is critical for enabling the community to prosper. Electrical infrastructure is a key enabler for both commerce and social enrichment, which is why I enjoy what I do.
But most of all, I enjoy working with the calibre of people that we continue to attract to Unison, and my biggest goal is to send everyone home safe and well every day.