USPowerGen CEO Mark Sudbey Shares His Leadership Success Story at Sequent DLS
US Power Generating Company chairman and CEO Mark R. Sudbey spoke at the University of Houston C. T. Bauer College of Business on Oct. 20 about the importance of carefully thinking through plans in business, and life, and the value of quickly changing them as new circumstances arise.
Sudbey, a featured speaker at the Distinguished Leaders Series presented by Sequent Energy Management, described his career in the electric business, which demonstrated the value of seizing unexpected opportunities, recovering from stumbles and believing in your ability to deal with all of it.
“One of the things I learned in my 25 years in industry is most people are not a heck of a lot smarter than you are,” Sudbey said. “But a lot of them think they are. You have to be confident in your abilities. Most of it is common sense, logic, hard work and paying attention to details.”
Sudbey’s path to the power business began with what he described as a “mistake” — majoring in engineering because that was the top choice among his friends. After college, that training allowed him to take his first step toward his future as an entrepreneur in a most un-entrepreneurial setting — he was hired by New England Power Co. to work in its electric generation operation.
When the utility became one of the first in the country to split off its power plants into a separate company, Sudbey went with it. The day the deal closed, he went from the secure culture of a regulated utility to what amounted to a startup in an untried, new industry.
In retrospect, he said, it put him in “the right place at the right time.” The lessons learned he learned there on how to profitably run a power plant selling electricity into a market where the price is always changing allowed him to play important roles in two merchant power plant companies.
Sudbey told students at the event that his experience shows it’s a mistake for job seekers to always equate getting hired by a big established company with certain success.
“Some of the best opportunities in my career have been with small business,” he said. “You can take on anything you want to do at a small company.”
In both cases, what started small quickly grew large.
The first of those, Orion Power Holdings Inc., grew by acquiring power plants in the Northeast until it was taken over by Houston-based Reliant Energy in a deal worth nearly $3 billion.
Sudbey then put together a team of veterans of the business with the various skills needed to start a new venture, which was to become U.S. Power Generating Company. While he was the sixth employee at Orion, he was out raising money for USPowerGen before it had employees.
“No one talks about how you convince someone to give you the money to start a business,” Sudbey said.
During the talk, he hit the high points of that effort, from raising $10 million in seed money and creating business plan through negotiating the terms for $350 million in private equity funding, to dealing with intricacies of day-to-day operations. The week the company took over its first power plants, the payroll system wouldn’t work, and Sudbey had to personally write and deliver the checks to more than 300 workers.
“The minutiae you are involved in, is not really minutiae, because it can make or break your business,” he said.
The last two years have been hard ones for power generators. Demand has been down and profit margins iffy. What seemed like sound financial assumptions about the electric business when the company was started are now in question.
“The business model changed before we did the first transaction,” Sudbey said. “We’ve change business models about two or three times based on opportunities out there and the environment out there.”
Part of Sudbey’s job as CEO is effectively dealing with those who feel the consequences when things don’t go as planned.
When asked how he deals with those sorts of things, he said, “As long as it was a well thought out process, and you understand what went wrong and know what you are going to do about it, you are going to be OK.”
By Stephen Rassenfoss