Powering Progress: Leadership and Innovation at CMS Energy

Welcome to Leadership Reimagined, where game changing conversations are reshaping the world of work. I'm Janis LG CEO and founder of L Group, Executive Search advisors and pioneers in redefining executive search through our unwavering commitment to helping organizations hire outstanding executives to build inclusive environments. Today on Leadership Reimagined, our topic is powering progress, leadership and innovation at CMS Energy, and I'm delighted to welcome Garrick Rochelle, President and CEO of CMS Energy, a Fortune five hundred energy company headquartered in Michigan that provides electricity and natural gas to about six point eight million of customers through its principal subsidiary, Consumers Energy, and with assets totaling roughly thirty five billion, they are one of the largest utilities in Michigan.

Garrett joined CMS Energy in two thousand and three and has held multiple leadership positions across operations, customer service, and strategy. Before becoming CEO in twenty twenty, he served as executive vice president of Operations, where he oversaw electric and gas distribution, generation and operations. A Michigan native, an engineer by training, Garret is committed to reliability, innovation, and doing everything he and CMS Energy can do to keep the lights on for customers twenty four to seven, while never wavering in their commitment to doing it safely and efficiently as possible.

Eric, I know you have a busy schedule with electricity and energy on everybody's mind today, but so thank you so much for joining us. Thank you, Janis. I appreciate the opportunity today. It's a pleasure to be here.

Well. Great, So energy issues are challenging today and I'd like to know, though, before we get into those, what got you into this sector? And as a native of Michigan, your passion to impact the state is compelling. So who inspired you and how did you come to pursue this career path.

I'm smiling. It's an interesting story and I have to tell you this. Like most people, I love my dad, but like I got to tell you the story along this on along these lines. So my dad was in the energy space.

Although our careers never overlapped, there was a gap between when he retired and when I started in the energy and the utility space of about three years. He came into the industry in the nineteen seventies, and this is when some of the Clean Water Acts, Clean Energy Act underway and companies were first starting to comply with environmental requirements from the e PA and the like. And was in business and kind of shaped his career in that area. But one of the things he was responsible for was re licensing hydro facilities or dams on the river.

And he had to do these public presentations and he would practice with the family. So imagine me like ten, eleven, twelve years old, and he's got this slide carousel, Like that is that's aging me? When I talk about slide carousel. I don't think anybody knows what a slide carousel is anymore.

But all these little pictures and it would make the kind of chunking sound when the slide went in, like a noise. But he practices presentations in front of us, so like I got to know the energy business, I got to know the company. Like when I was ten, twelve, fourteen years of age, I didn't like it, like what teenager wants to sit with his dad and go through some presentation. But as I got older and more mature, I'm like, wow, that was really wise of him, Like that got me inspired because energy companies were doing cool things at the time and building cool things, and that's really what got me into this industry.

And so fast forward to today, like I took it along my career steps. I took a job at a municipal utility doing energy work, and then I came over to CMS Energy in two thousand and three, and so I really attribute a lot to my dad and my passion around that. Even though I wasn't excited about the time, I love being able to connect back to the eighties and nineties in times of what was going on in this industry and how it's changed today and what we have the opportunity to do for our customers and coworkers and communities.

Well, that took you, though, to get a degree in environmental engineering right from Michigan Technological University. So you went that path and then you when you went to CMS, you had a lot of different roles that you took on. So obviously your father made a major impact on you. So tell us about some of those early career moves that you had he did.

I mean, part of the reason I went into environmental engineering was because he was an environmental scientist, and that was his role, so he like pushed me in that direction or encouraged that direction, and it was a great opportunity. I like, I started out as an environmental consultant, Like right out of college. Fresh out of college, when I'm green, I went to work for this environmental consultant which was doing groundwater treatment and other types of programs throughout the Midwest.

And it was amazing learning experience because I would design treatment systems to treat contaminants in groundwater, I'd build them, I'd deploy them, and so I saw the full cycle. So it was really growth opportunity. But it was a horrible company to work for. We like just like the owner was a penny pincher, and he gave us twenty five dollars per dim today like to eat twenty five dollars.

And this was like nineteen ninety six, seven, ninety eight, twenty. You couldn't even even eat like breakfast, lunch, and dinner for twenty five bucks even back then. It was always like And then he gave us sixty dollars to find a hotel room. So like I was traveling all over the Midwest and I was staying in these crummy hotels like the ones you pass on the highway where the doors are exposed to the parking lot, like hotels eating fast food.

And then I met my wife and she was permanent in a place, and I was like, it was a great experience for learning, it was a horrible from a coworker culture perspective. So I got out and that's when I saw this opportunity to work at This is where my dad's earlier influence had an important impact, because I had the opportunity to go work for a municipal utility. They're doing energy work. I was responsible for environmental compliance at the time and doing some of the modifications they were doing to boilers, and so that's where I made my transition back in ninety eight to nineteen ninety eight to the utility space.

So what were some of those roles that you had early on in your career that led you into being able to take over a CEO. There was a really great at Holland Border Public Work. There was a really great boss that I worked for. I did environmental compliance, but he gave me the opportunity to go into leadership.

I jumped from my comfort area of an engineer into being a maintenance supervisor. A superintendent had union coworkers, thinks working for me, millwrights, welders, and I just learned a lot about the power plants and the industry and that really positioned me to go over to Consumers Energy or CMS Energy at in two thousand and three and grateful for a number of leaders who gave me opportunities. I was in power plant operations, both coal and natural gas. I went over to engineering on the electric and gas sides that think the wires and the pipes, had opportunities to go into our customers and customer service and economic development, opportunity to go work in our regulatory organization, think how do we recover some of the investments we need to make.

And then eventually was the chief operating officer and ran the entire operations for the company. So just a variety of different opportunities that I've had that positioned me well over the last really twenty seven years in this industry, position well to be a CEO. So you have had so many different roles there you really understand this industry and now you're employing over eighty three hundred people actually and you serve million nine electric customers in a million eight natural gas customers every day.

You know what goes into making that service delivery work. But what are some of those challenges because you're really a major player in Michigan's economy, what are those challenges those demands in terms of continuing to support your customers and Michigan's economic growth that you face every day there. I love what we do and we put in this context of heat and light. I didn't say electricity and gas.

I didn't say gas, molecules and electrons. It is heat and light is it's really, as we know in the US, a quality of life. It is a standard of living, and we get to do that every day. We're not making widgets, right, We're not selling commodities.

We're doing something amazing in our communities and in our state. And so when it comes to challenges like we want to be able to just continue to exceed our customers' expectations well from how we serve in terms of the reliability in the electric system and doing it at a very affordable cost every one of our customers. And so that's a challenge. In the context of what's changing around us, there are more more significant weather activity in the last five years.

Both in terms of frequency of storms and wind speeds and we've seen in our entire history, and so building an electric system that can be resilient to that is important for our customers so they're not without power that costs something, and how do we do that in just the most efficient way. For the future, we have this opportunity on digital and how do we use digital and AI and machine learning to be able to change our business for the future. Like that's an important piece of how things are changing.

But I think one of our biggest challenges is this is this data center boom that we see going across the US in the context of AI. So you see these large hyperscalers companies like Google, like Microsoft, like Amazon who are building these large data centers and have this love energy demand, and so it is really about working with these companies to plan that out because we have to make sure we have the wires to be able to support it, but also the supply resources are generation I think power plants to be able to support that.

We can't build power plants overnight, and so being able to coordinate those two is probably one of the most challenging topics, not just for US as a company, but US as an industry, and so we are working closely with a lot of the hyperscalers to be able to say yes to be able to help grow our service there grow our state. But it takes a lot of coordination to be able to do that in a successful way. Well, you have a great team around you and innovation has been part of your ethos in direction for a long time.

You're one of the one hundred and fifty two utilities is moved away from coal, So you have been innovative and taking steps along the way. So when you think about those data centers and those challenges and the workforce that you need to deliver all this, what is keeping you up at night to really have the people you need along with the technology to drive this innovation and the changes. That's a great question. It's certainly something we look at from a workforce perspective, and what's the media in the future and can we get the workforce to the future.

I think the big opportunity and innovation is i'd broadly say digital, and digital in my mind is everything from software and hardware what you might expect all the way through artificial intelligence and the components of machine learning and the GENICSAI and how does that utilize But it's also in things like robotics and robotic process automation, and how do we think about that as utility Because in our sector, if you are not thinking about those things, you are quickly falling behind.

And I would even from broader perspective, say, even outside of our sector, if that's not part of how you're thinking about the future, then you are falling behind. And so we're spending a lot of time in that space because we know the workforce it'll be difficult to attract the workforce of the future. We want to know that we're attracting both people who have great analytics skills and data scientist skills. So that's how it's shaping and like the profile of future co workers.

But we're spend a lot of time in that space to build out. We have been doing like code camps to teach people coding to advance our workforce existing workforce. So we're prepared for that. And I'll just give you like a real world example of this.

My highest cost as a business is when the lights go out and we have to restore service. And that's an important not just cost for the business, but It's an important piece of how do we deliver better service because nobody wants the power out. They want to back as fast as possible. So within the space of innovation, I'm convinced.

I'm convinced with sixty seventy years of public information on weather and even our internal evernment, we have computational power today in AI that we can better predict the weather, better than our weather people today, better than Noah today. We can do that, and then wef overlay our assets. When I say assets like pipes and wires, we can get better knowing that this circuit or these polls are in this condition, the ones on the adjacent circuit under a better condition, and if we can better profile that weather, I can be very surgical and how I put my resource to restore customers because I know these customers will go out and these customers will stay on, and I can pinpoint those important line workers right at that substation, right at that point of impact, and restore those customers faster and it will cost less.

So this is that we're working with the University of Michigan. We've worked with our own teams to be able to develop this kind of modeling. Really in the space of AI and machine learning, which is I mean, it's just amazing what's possible in the space of innovation. So I'm so excited about what the future brings and how we're leveraging it is to just continue to deal with the workforce gap but also the future workforce needs.

That's amazing. You know, it is predictive scenarios right where you can if you can use AI and these other models to you look in a month or two weeks, you can expect this to happen. You know, nature will be a tornado, windstorm, whatever, and then you can allocate your resources accordingly. Right, this is what you're talking about in terms of present predictions.

Yeah, better customer service at a lower cost, and our coworkers are happier too because we're just just how we leverage some of some of their time as well. It's a win win. How do you find in terms of looking for employees today to be able to attract them? Are you getting are you working with community colleges, universities?

How do you prepare for the future in terms of having that workforce? What are you doing proactively? It's both, particularly from a trades perspective, our line workers and gas workers. We're working closely with community colleges.

Typically we want them to go through at least some preliminary courses on electric and how electric works and see if there's an affinity to that, if they're both interested in that type of work, but also they have the skills and for our trades people, we have really made the commitment that we have to train them ourselves. And it's for a couple of reasons. One, when we invest in them and do that work, we found they're very sticky. We make a commitment to them and growing them, but they also stay for a long time.

They're not one to get the training and leave, and so we'll spend with an electric line worker and an apprentice piece. There's got about a little over three hundred in the apprentice step one through four for an electric electric line worker, so we're doing a lot of that work. It's surprising how much it costs to train an electric line worker, but you can't just go hire them and complete it. Just they're not sticky at that point.

It's hard to get them, hard to get them to move from other companies to your company, and so that's what we've had to do. Both an electric and gas perspective. So it's about nine hundred thousand dollars to train line worker just to give you a ballpark. That's awesome, and that's the cost in terms of paying them too, but in training to bring them up to be a journey line.

Then we work particularly with some of our what I call office work and some of our engineering and our computer science and data science people. We work closely with the universities and particularly find it's universities located in Michigan, Becau particularly they're stickier as well if they've grown up in Michigan. But we're looking for skill sets of having richer development in the data scientists, analysis analytics, deeper analytics for every one of our roles, because that's really the wave of the future.

And so we work closely in partner with universities to get the right talent here across our system. So with AI and technological changes that will happen in this industry. And the audience is now listening to you, why should people come to CMS and why is this a great career for the long term as you have had you know, over twenty years there, why is this so exciting particularly. Now as you said twenty seven years in the industry, and I will tell you this is I'm not just saying this to say this is your question, Like, this is the very best time to be in this industry.

And if you as an individual, are up for a challenge, if you love changing the future, this is the place to be. We are and changing how we supply energy for the future, and that is moving away from traditional fossil based assets like coal to more renewables, and that's the grid looks differently as a result of that. And to be part of that change and changing the way we supply energy and doing better by the planet to improve air quality, like being part of something that big is an opportunity of a lifetime.

That's just one element. I talked about the weather and the increasing frequency of storms. We got a distribution system that was built fifty sixty years ago, and now we're bringing new technology, new ways to harden that system so it's resilient to tornadoes and other types of natural disasters. And so it's our customers have energy when they need it, and that's really to meet those high customer expectations.

So the technology and rigor that we are bringing to the distribution system that change. That transformation is well underway, and that's an exciting part to be in. We're bringing digital. There are a lot of companies that are talking about digital.

You know, I sit on a number of boards and we're all talking about digital, but like we're actually doing it. That example that I provided with University of Michigan and believing that we can model the weather better and we can get better at service is just one example of many that we are doing across and actually of deploying digital to get better outcomes and be able to better predict because we have the computational power now and that is like, that's cutting edge. That is great, a really great place to be.

And then the other thing is like, there's so much growth. This is an industry that's growing. I talked about data centers early. We did not have this opportunity five years ago to have this type of growth.

We are seeing more on shoring of manufacturing in the US and bringing semiconductors in Michigan. In Michigan, one of the largest polysilicon manufacturers in the world is located right in our service territory. Polysilicon is in every every phone, it's in every car, it's what's used in making solar panels. It is how we develop all these chips and it's being made right here, very technical process.

One of our largest customers. It's amazing to see it's happening right here in Michigan. And so what a great opportunity is to be in this industry and just the CMS Energy pitch that was exciting to be in this industry. But find a place where you can find joy in your work.

Find a place where you have the right culture. And when people land here and have the opportunity, they stay, They stick and have great opportunities, great careers and find really joy. Like for me to get up, it doesn't take anything for me to get up in the morning because I just love what I do and I'm in the I love this work, and a lot of our coworkers feel the same way. Even when there's a major storm right here, you're there.

It's sort of a challenge of the industry. But you know, when you talk about culture, CMS has been championing a culture of inclusivity for a long time. You've been recognized by Forbes as the number one utility for workplace diversity in the US and one of the country's top companies for women. How did this all come about?

Have you been driving this? Who else was driving it? And you say, you know, come here and you'll get great joy, a sense of belonging. Where does that come from?

How do you make that happen? I give a lot of credit to Patty Poppy, who was our previous CEO. She was clearly leading on this, and I grab that baton and continue to carry that baton. But it boils right down to this.

For me, we want the very best outcomes like we got. We're doing big things. We are doing big things, and the only way you're going to be successful at big things is if you are really listening to the ideas and thoughts and perspectives of your team and throughout the organization. The only way that can happen is if you are have a wide net when you're hiring it.

You're hiring the very best people, and you're really widening that net so you're getting all different perspectives. That's gender, that's ethnic background, that's just different points of view and different places in the world, and like cast that wide net, pick the very best people and then internal to the company really creating that environment where everyone can be present and everyone can be at their best self. I just won't say whole self, because sometimes when people bring the whole self, they bring bring things that need to be coached.

But like, bring the best self into that conversation. So we're hearing, and we're hearing all those different perspectives because that's the sweet spot. I'll give you a real example. We're at an off site a strategy discussion two weeks ago.

This is the executive team of the company, and we had part of our strategy team there. And on that strategy team, we had a new leader. She's been with the company six months. She's in her twenties, and she says this in the room.

She says, I might be naive. I haven't been in this industry that long, but here's my perspective. And she's kind of like in the point of this, like challenging me. And I loved it, like I love that she felt comfortable enough to share her point of view.

But I said to her, like, hold on, hold on, take that word naive out of your wolf gable. Here. You have a different perspective than I do. I've been here at this company twenty two years, in the industry for twenty seven.

I am probably biased. I've probably been here too long and I'm setting my ways and so you bring in that new perspective is exactly what you need to do. I need that, we need your perspective. And so it's that type of that type of perspective that's what we're trying to create on a daily basis.

So people feel like they belong, they're sticky, they want to stay, they have a voice, and we're really able to create the best outcomes for success to the company and our customers. I love that. I think having the voice is so important because I know when I'm doing recruiting people to different firms, including yours, they want to know that they're going to be heard right, that they can make an impact. Otherwise their life is not as meaningful.

They want to have a meaningful purpose in life. And when you can go to a company like yours and know that you can speak up and do this CEO that way, it's really empowering, isn't it. And you get the best information because the frontline workers know more than most of us at the top. Right, that's where all the dirt is, Like, that's where, Yeah, you got to have a connection with where all the that's where you hear the real challenge.

Absolutely so, Gerrett. But you're in an industry that's highly highly regulated, and so that also impeak can impede progress and making things happen. How do you deal with that in terms of still being innovative but dealing in this highly regulated environment. That's a good question, and it's it can be a barrier just the nature of the regular to overhang.

In some cases, we really try to frame it up internally to say like, if you want to rest on the regulatory blanket and feel safe and comfortable in the regulatory blanket if you want to. Many times utilities are referred to as monopolies. If you want to just rest in that spot, you will quickly fail as a company, you will quickly fail as individuals because it leads to path of mediocrity and it leads to the power path of ultimately failure of the company. That's not where we want to be.

We want to be in this place of where we're innovating for the future. When we're thinking about how do we deploy digital for better outcomes for our customers. How do we do this differently from a robotics perspective to aid and make our safer for our coworkers. That's a better place to be, that's a more exciting work, that's more that's a bigger opportunity.

And so that's how we talk about it from a people perspective. Get people to think differently and move differently. And then we've equipped our strategy team with the ability not just think about strategy in the future of the company, to think and look at innovation. We've also done some recent restructu within our different business units where they have an innovation lead which is really designed not to be thinking of like the new sources of energy like batteries or nuclear, but to be able to be able to be how am I innovating in the business that I operate, How can I bring robotics into the way we do line work?

How do I improve the efficiency of this process? And so we've also embedded innovation within the very business units to work on how do they get better in terms of that innovative space. And so it's very deliberate and the last thing I'll talk about the digital piece, but we're we have created a newer organization to be a digital first utility, to capture this opportunity. So we've hired the right leader, built a new team, enhancing our coding skills to be able to self build some of this work and to be able to work with some of the vendor community differently.

And so those are just examples of ways that we have changed, changed our structure, changed our approach to be able to get beyond this kind of regulatory regular toy blanket or safe space that our barrier that might be out there. You're obviously changing with the times and moving ahead. Talk a little bit about those emerging technologies and the potential to disrupt and transform the energy industry, and particularly small modular reactors. Where do you see this going.

I'm excited about small module reactors or SMR. There's good work going on in the space, and particular project in Wyoming. There's a project in Texas, the Wyoming Ones fur their advance. We need that technology to become what i'd call more commercially available, to scale and to be at the right price point.

Nuclear is cost prohibitive right now. It is clearly in my book and from a US energy policy, a better solution in the long term, but we've got to be able to get the cost down, so it's an affordable opportunity for customers that can happen with this technology that's being developed today. I'm excited about what that means. I still think it's ten to fifteen years off, but it's certainly something that we are contemplating considering.

I would also say there's a lot of investment in battery technology, so beyond nuclears, like battery chemistry, different approaches from a construction perspective, a lot of invest being made in investment being made in research and develop in those areas. That's also something we stay close into and are deploying across our system as well. So it's not just digital. That's a key piece that I've provided examples throughout this podcast, but there's also in the space of supply, both batteries and nuclear.

There's great developments underway that work. We're closely closely following. Eric. You've been with CMS Energy for more than twenty years.

You've obviously really excited, like you said, to get up the every day and go serve the Michigan Residence. It's really empowering and exciting. I wish I had started energy a long time ago. I think it's too late for me to do it now, but I really commend you for what you're doing.

So what would be your most important piece of advice to those listening today who aspire to enter energy or the utility field, and what would you say to them? So I shared some of it. Yeah, find joy, Find this opportunity where you love what you do. This industry is not your grandfather or your grandmother's s dodgy old utility.

There's so much transformation underway, there's so much challenge underway. Find a career where you're challenged, and this really is that opportunity. This really is that place. It's exciting to go to some college campuses and see the lineup of interns and potential new graduates that are excited about energy and so it is really different than it was historically.

And hopefully what came across is my passion around this industry because I really think it's a great opportunity. And when you get into the energy business, there are how do you supply energy? How do you distribute energy? There's the gas, there's the customer piece, that's a regulatory there are so many different avenues.

What I've seen is people over the course of their career be within one company and say like, I want to go from electric to gas. And so you go from you've developed a strong career in electric, you make the jump to gas and it feels like you've took on a new career. You're fresh, you're excited about that in your career. But you have the benefits of you're with the same company, so you know how things get done.

You don't have to take you don't have to take the risk of moving to a new company and finding out, oh that grass is not greener. It's you can move within the same company and have a completely new career or what it feels to be like a new career. And so that's an exciting part of what we do. And so I would just encourage the listeners here, grab the ball by the horns.

Do something challenge and exciting. It's in the energy space where you can make a real difference for the future of the country and future of the state and certainly for every one of our customers we serve. Grek, you know what you're doing for the residence of Michigan Heat and light. You know it's a quality of life, isn't it.

Im You making sure that people can live in a good way, and I hope in every state we have that. Sometimes I wonder so other states where I reside, you're really Your commitment to strengthening the grid with smarter technologies, stronger infrastructure, and automation while balancing innovation with environmental responsibility is compelling and impressive. You know, from underground wiring to adaptive polls and digital response systems, your work demonstrates how legacy utilities can lead during a time of transition, and I know our audience has gained invaluable insights from your perspective on navigating these changes, advancing renewable energy and building a resilient utility for the future.

So I want to thank you personally and professionally for being with us today and making a brighter future, empowering progress with the leadership and innovation that you are driving at CMS Energy. So Garret rausch Out, thank you so much for being with us today. Thank you, Janis, I appreciate you, and thank you to our audience for tuning in on another exciting, game changing conversation on leadership imagined. You can find me on LinkedIn, Instagram, or visit our website at elgroup dot com.