Capital Power CEO Brian VaasjoJohn Ulan
Brian Vaasjo knows about turning adversity into triumph. An industrial injury in his youth set him on a business career path, which has taken him to the top of one of Canada's major new companies, Capital Power Corp. is the power-generating spinoff from Edmonton's electricity supplier, Epcor Utilities Inc. Last year, he guided Capital Power through a $500-million initial public offering in a tough market. Now comes his biggest challenge: changing the corporate culture from public utility to private enterprise, while pursuing an aggressive growth strategy.
Did you decide early in life that you wanted to be in business?
No, my undergraduate degree was in education - in secondary-school social studies.
What happened?
I ended up doing student teaching and substitute teaching. Although I did quite well, it just seemed to be quite a struggle. I ended up in a couple of not very good schools. I thought, "Geez, do I want a life of trying to move these kids along?" It's funny how things twist and turn. By chance, I wrote the standard test for entry into business school. That summer, when I was working on drilling rigs up north, a tool joint came down and took off four toes and part of my foot. So I ended up going to [business]school when I was on workers' compensation for a year.
And if you hadn't been hurt?
I might well have ended up staying a teacher. It turned out I enrolled in the MBA program and that started the whole process. I liked it a lot.
Did you have a teacher who influenced you?
One professor in particular at University of Alberta, Terry Daniel, was very down to earth. You get those professors who know their subject matter and can bring in interesting things. I was taking statistics from him, and math isn't necessarily my strong suit, but Terry was very good. A lot of other professors are just academics. Someone teaches management science and they've never really worked in a company.
Why have you said the power market today is complicated and unforgiving?
Power prices are half of where they were a year ago. It has made a difference in the perspective of the organization - and for the better. If not for this decline, we would have been rolling into 2010 with annual revenues $100-million to $150-million higher. In that kind of environment, you're not as worried about being efficient or being effective. You don't have that push to get there. But in our situation, we actually have a burning platform.
Capital Power now has capacity of 3,400 megawatts. What does your goal of '20 times 20' mean?
That means 20,000 megawatts by the year 2020. It's a stretch goal. Our balance sheet now has $5-billion in assets; that would mean rising to $20-[billion] to $30-billion. There are some good, emerging acquisition opportunities in North America, and we see growth through our own development.
Even though there are signs we are out of recession, you have some fairly large independent power producers, or people who have power interests, who are coming under financial stress, when they have to go back and renew bank facilities and they have to refinance. It's a very different world for many of them. We have a team that is very active in looking at such things.
What is your biggest challenge?
It's moving the top 150 people in our organization to a real leadership position.
Haven't you said you want leaders, not supervisors?
It is a big leap, and we're putting in place the structure, definitions and compensation programs to support it. Not that we're putting more money in it, but there is greater alignment of pay and performance. Those things are often pretty murky in an organization.
Don't take my comments as mercenary. I'm a firm believer that very good people aren't necessarily driven by dollars, but that is the score sheet. If you've done really well, what you get at the end of the year is just recognition of how well you've done.
Do you accept that some managers will take to this new culture and some will leave?
A lot of the challenge is to work hard to try to move people to begin acting in these roles. That will take a lot of effort. We could approach it by saying, "Well, we think 30 per cent aren't going to make it, so let's bring on 30 per cent more people." But that's not showing strong values relating to people. If that number is 30 per cent, we have to get it down to 5 per cent - by educating people, working with them, making sure they get the proper mentoring.
You are tying performance reviews to certain leadership behaviours, such as coaching. What are some others?
True leaders support company policies; if things are happening in the organization, they are communicating it down to people. They are mentoring.
Another thing: Managers tend to step down and do your job if you are not doing it well. They tend not to put a bright line between what you are doing and they are doing. But if you are not doing your job right, instead of compensating for your shortfall, they should be working with you to get it right.
So preventing people from overscoping their job downwards is extremely important. Ten to 20 per cent of the activities in an organization are just that. It can be that there isn't a clear definition of roles and responsibilities.
Are there role models for this kind of transition?
None have come to my attention. A lot of it is basic good management. You know what good leadership is. And if you get good leadership from 150 people, you're going to increase the productivity of the other 1,000 by 30 per cent. You get a massive payoff.
And you can't approach it by saying: "Let's fix processes and not fix culture," or "Let's fix structure and not fix processes." You have to do them all pretty much at the same time, or you're just not going to get there. You throw all the cards up in the air instead of just a few at a time.
Because of the IPO, everyone here is dislodged a little bit, and so you already have a little bit of a momentum for change. Our challenge would be significantly greater if we were just sitting here.
Are you a green company?
We are an environmentally responsible company. But the route to a lower-carbon world will not happen over a short period. Most of the world is driven by carbon and 70 per cent of the power in Alberta comes from carbon. It is going to be a very significant power-generating fuel source for a long time.
Our view is we should be putting money into technology, into things such as carbon capture and storage. But there are also smaller initiatives such as putting monitoring equipment the size of a bread box on the stack of our Genesee plant [a coal-fired facility in Alberta] which has dropped CO{-2} emissions by 2 per cent.
Green power generation is good and it has a role, but you're not going to see where 50 per cent of North American power is green. It's just not going to happen. We're a coal generator and we're not of a mind to try to wrap ourselves in green.
But we are going to be doing renewable projects and we are involved in calls for clean energy in Ontario and B.C. Out of those, we're hopeful to see big wind projects for us. Twenty per cent of our actual power generated last year was from green and renewable sources. It's not that we're just talking - we're doing a heck of a lot.
Are you going to make some growth moves soon?
We've got a lot of irons in the fire. You can never perfectly predict when some of these things might happen. But I'd be very disappointed if something didn't happen this year that would be newsworthy.
In acquisitions?
Or on the development side. The absolute stretch case is $30-billion [in assets] If we can move the organization from a leadership standpoint, and if the right deals and opportunities are there, we should be able to meet that. But we're not going to force that to happen. If valid opportunities aren't there, we are not going to be pushing it.
Brian Vaasjo
Title: President and CEO, Capital Power Corp., Edmonton
Born: August, 1955 in Edmonton
Education: Bachelor's degree and MBA, University of Alberta
Career highlights:
Spent 19 years with the Enbridge group of companies, where he rose to senior management.
Joined Epcor Utilities in 1998 as executive vice-president and chief financial officer. Led Epcor's initial public offering of debentures and preferred shares. Rose to chief operating officer of Epcor, as well as president of Epcor Power L.P.
2009: Became president of newly created Capital Power, which has 1,000 employees and 31 power facilities in Canada and the United States.