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It was a little over 40 years ago when Steve Young first joined what would become Duke Energy, the giant electric power holding company headquartered in Charlotte, North Carolina.
“Not only has it been a long tenure, but also it is the only post-college job that I’ve ever had,” says Young, who first roamed the energy giant’s corridors as a finance assistant.
In the years that followed, Young says, he became involved in various finance-related projects as different executives sought him out because he had become recognized as a hard worker. One such senior executive, who sat inside Duke’s rates and regulatory affairs realm, approached Young about a staff position in the department.
“It was a smaller group and outside of finance, but from what I could see, the group intersected with the lifeblood of the company’s profitability and revenue streams and pricing,” explains Young, who accepted the position and in short order acquired the regulatory executive as a dedicated mentor.
Says Young: “This person was a tough, hardnosed executive who had a reputation for being that way.”
Years later, when the executive retired, Young advanced to his mentor’s position, a promotion that firmly planted him inside Duke’s executive ranks.
Along the way, Young’s regulatory focus and experience afforded him a keen sense of how the changing legal landscape would alter the industry in the years ahead.
“I was pulled into that process,” recalls Young, who says that back in the mid-1990s, he enjoyed a ringside seat as Duke pursued and acquired one of its early M&A targets, PanEnergy.
“Mergers were rare in the utility industry back then, and certain laws had to be repealed—they were, and other mergers have since occurred,” explains Young, who in the decades that followed influenced and championed a string of transactions that would reshape Duke’s business over time.
“I found it a fascinating challenge to pull the pieces apart, put the new pieces back together, and come up with a cohesive business plan that was understandable to the SEC, regulators, and shareholders,” remarks Young, who would find himself at the center of Duke’s M&A activities in the mid-2000s, a period during which Duke sold off its international and merchant businesses and merged with energy company Cinergy of Cincinnati, OH.
“All of this happened within 2 years,” says Young, who advanced into a number of organizational CFO roles during that period and was named senior vice president and controller for Duke Energy in 2006. He would be named CFO and executive vice president in 2013, following the energy company’s 2012 merger with Progress Energy—yet one more transaction along Young’s career path. – Jack Sweeney
Guest: Steve Young
Company: Duke Energy
Headquarters: Charlotte, NC
Overcoming merger hurdles.
CFOTL: Tell us about Duke’s technology transformation practice and the role it plays in M&A?
Young: The technology side of any business, certainly at Duke Energy, is dramatically important and the importance is accelerating. And that’s why we set up a business transformation capability. We’ve got a separate facility that houses several hundred people who are just looking at how can we take technology, whether it’s data analytics or digital, and how can we put products in place that will streamline the efforts of employees in this company? And it’s incredibly important. In the M&A environment, one of the big efforts that you do in integration is assess: What are your IT platforms for payroll, for work management, for benefits, for your generating facility, information for your financial systems. All of that. You’ll look at where are your platforms? What are they? What condition are they in? Let’s start planning the integration here.
One of the biggest challenges of an M&A transaction is the integration, where you get the systems up and running. The quicker you can get on a common platform, the quicker people will start speaking the same languages. They will then be able to transfer more easily from company to company, business unit to business unit, and you’ll start getting more best practice sharing. You’ll start to see a better benefit from your human resource side of things when people are working off the same platform. So technology is really advancing in importance within any enterprise, I suspect.