A Partnership in Progress:
UConn faculty and Northeast Utilities collaborate for the Finance Academy
David McHale, Executive Vice President and Chief Financial Officer of Northeast Utilities System, was reading a book a few years back about why people with original ideas succeed in business, when he had an idea of his own.
The book, entitled Mavericks at Work, advocated taking risks and investing in your employees as a way of moving your company to the next level – a concept that appealed to McHale and led him to the idea of creating an in-house college curriculum for his own employees that is called the Finance Academy.
The two-and-a-half year program, which began in 2008, is taught in partnership with UConn School of Business Executive Education faculty and experts from NU. The company also partnered with the UConn School of Education to help train NU employees to be teachers.
"The idea was really born out of the need to support the organization as we strategically navigate through the new energy economy," said McHale. "But fundamentally it was to make them better business people and help drive good answers for this company. My sense was that the world was getting more sophisticated and complex and we needed a work force that was going to keep pace with this. The bigger issue was how to do it."
McHale knew what he didn't want – a general exposure to business concepts – and that led him to UConn School of Business's Executive Education Program, which stresses experiential learning for its students. Going in deep, and actually testing the theories that are taught in the classroom, was exactly what McHale had in mind.
The end result is an interesting mix of general business classes, in subjects such as accounting and finance, taught by School of Business professors, and industry-specific courses run by experts from NU. Many of the latter courses also involve simulation of real-life job experiences, such as rate case hearings before the state Department of Public Utility Control and investor presentations for the sale of company stock and bonds.
"I wanted this program to have a special feel that was interesting, where people would want to engage and work in teams and experience something away from the norm," said McHale. He participates enthusiastically in many aspects of the program, such as playing the role of Attorney General Richard Blumenthal during rate case hearings and getting up in a bucket truck to explain the importance of NU's capital program.
UConn graduate Steven Casey '87, now Manager of Financial Development at NU and director of the Finance Academy, said he had 60 employees apply for the 30 spots in program the past two years.
"We're making a significant investment in our own employees and, with UConn's help, we're customizing it to what they need to know for our business so they can come back and apply the learning to the job they're in or a future job down the road," Casey noted. NU will spend about $275,000 with UConn on the academy in 2010, when three different classes with a total of 85 to 90 participants will take place simultaneously.
The core offering of the academy is a five-semester program that begins with a four-hour online course covering the basics of electricity and then progressesed to fundamental classes on the electric and gas markets. After that, students move on to accounting, revenue requirements and rate design, and finance.
The basis of the revenue requirements and rate design course is the simulated rate case, which comes at the end of six weeks of classroom learning, Casey said. Students work in groups of five or six and each team has to create a rate case as if they were preparing it for the DPUC.
"People just love it, but it's really a lot of work and very nerve-wracking," Casey said, adding that he, McHale and other NU executives play different roles in the mock hearings.
Sal Giuliano, the Manager of Corporate Real Estate at NU and a UConn graduate from the Class of 1980, recently completed the revenue and rate design course. "I had a little bit of apprehension going in because the mock hearing was very formal and structured as much as possible to mirror the actual hearing at the DPUC," Giuliano said. "But it was very insightful and I certainly got an appreciation for the folks who do this work for the company."
Part of the appeal of the program is that employees such as Giuliano, who has 25 years with NU, work side-by-side with people who have recently started their careers – for instance, Mohammad Nauman '07 MBA, who has been employed as a Risk Management Analyst at Northeast Utilities for about two years.
"I'm really grateful that I was accepted into this program," Nauman said. "The things that I have learned, I never would
have learned. Never. The whole experience has been great."
Dr. Shantaram Hegde, Professor of Finance and fomer associate dean of Graduate Studies at the School of Business and director of the Executive Education program at UConn, said he and other UConn faculty worked with NU officials for six months to develop the program.
"It was an intensive effort to develop this program. In a conventional program you learn and then apply what you've learned. We wanted to accelerate that process in this program," Dr. Hegde said. "Northeast Utilities has an enlightened management and a very strong conviction that empowering their employees is a good investment."
The partnership with NU is good for the school on a number of levels, Dr. Hegde said, because it offers faculty an opportunity to learn more about the gas and electric industries.
"We typically look at a larger cross-section of firms. What this allows us to do is to dig deeper into a particular industry and see how the financial management operational tools can be applied to that firm's challenges and problems," said Dr. Hegde.
At the end of the day, that's what McHale wants his employees to do, too, which is why the company is also offering a case studies course in which employees study business concepts and then apply them to NU.
"Although it's still a little early in the program, I think we are already developing better business people," McHale said. "And I would bet that when we look back five years from now, we'll see a lot of people who have contributed something significant to the company." B