CEO Talent Champion:Ralph Izzo, Former CEO, Public Service Enterprise Group

An interview on talent plans for the future

This video and the following Q&A do not depict the entire interview.

Executive leaders are challenged to plan talent strategies that will continue to produce future results. PSEG’s former CEO Ralph Izzo shares his forward-thinking approach, including partnering with the CHRO, board and shareholders, reskilling for long-term outcomes, and leading with diversity.

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Q&A with Ralph Izzo

This interview took place on July 6, 2022. Effective September 1, 2022, Public Service Enterprise Group (PSEG) announced Ralph Izzo’s plans to retire in 2023 and his transition from CEO to executive chair of the board for the remainder of 2022. Ralph LaRossa was named president and CEO. Prior to this planned leadership succession process, Izzo served as PSEG’s CEO for 15 years and held leadership roles overseeing all of its operating businesses during his 30-year career with the company.

What I would say is you really have to listen to your employees. So, what I do every week — or at the most every two weeks — is a Zoom call with anywhere from 30 to 40 employees. And I ask them flat out: How is this working out for you? I try to get some feedback from our veteran employees who have been here for quite some time and those who are new. 


So, it’s really just making sure you keep your ear to the ground. And by the way, that’s not just done by me. It’s my whole senior leadership team — including our Chief Human Resources Officer Sheila Rostiac — that does a great job of that and just listening to that feedback.

The partnership with Sheila, our chief human resources officer, is really patterned after what I just mentioned a moment ago in terms of listening to employees. So, when Sheila took over, I think a couple months later, COVID-19 hit. It was early in 2020, and we went into crisis management mode. 

I think if I’m not mistaken, we were speaking literally two times a day — in formal conference calls with the simulation team and what you will. That then morphed into two times a week, and now, it’s a regularly scheduled call that’s two times a week, but, of course, it’s as needed. And it’s just: What are you hearing, what are you learning?

You have to make absolutely sure that your chief human resources officer can be as honest with you as possible. There is a tendency sometimes, I think, when you’re the CEO, some people will say, “OK, this may be a problem, but let me see if I can fix it before I have to go tell Ralph.” And that’s OK, if it’s fixable, but if it starts to grow, you don’t want them to double down: “Now, I’ll really try hard to fix this before it gets there.” I can’t help unless I know that there’s an issue. So, Sheila feels comfortable telling me from day one: “Just want you to be aware. Here’s what we’re working on, but this is what we need to be aware of.” 

So, I think one of the biggest trade-offs that we pay a lot of attention to here at PSEG — and Sheila and I are of one mind on this — is we focus less on the position and more on the person. So, what do I mean by that? We recently sold a major part of our company. We sold the equivalent of 7,000 megawatts of power plants, in effect, 500 people. Some of those people work in the plants, and they went with the purchaser. Others were support functions, and others were no longer needed. 


So, we said, okay, that job is going away, but that’s a person who has some skills. They may be financial skills. They may be analytical skills more broadly defined. They may be craft skills, but they’re easily translatable to things that we’re doing in other parts of the company. 


Another example of that is we are in the process of installing advanced metering. Right now, the company has people who go out and read meters, but we’re changing to a technology where we don’t need that to be done. So, that job classification is going away. But those people understand the energy business, and they understand our company. Maybe they can be retrained to work in our call centers. Maybe they can be retrained to do some of our energy efficiency work. 


So, we try to really capitalize on the skills and talents that form a foundation that the employee has that can then be either expanded or converted to some other part of the business, as opposed to simply saying we have to protect the meter reader position.

The competition for talent is quite real. I think part of that for us is — and Sheila is great at this — is being part of a network that understands, ‘All right, so we offer competitive wages. We offer competitive benefits. What can we do to differentiate ourselves?’ 


And there’s a generation that now wants to know they’re working for a company that cares, that cares about social issues, that cares about environmental issues. I want us to be careful, right, because there are some divisive issues that may not be as relevant to us as a business — from the point of view of taking a policy position — but may be relevant to our employees from the point of view — how we manage their benefits, how we manage their vacation schedules, how we manage their flexibility. So, these are all things that I rely heavily upon Sheila for, I think, that we’ll have to be mindful of going forward.


We’re hiring people with analytical skills in artificial intelligence and machine learning. Those are phrases we didn’t use a handful of years ago, let alone hire the people to come in and do that work. So, there’s a whole range of changes that are taking place — some of them driven by policy, some of them driven by technology — that we’re having to adjust to. 


And of course, a major, major driver of these changes, is climate change. And we are proud to say that we are at the forefront of trying to address that both from the point of view of avoiding the pace at which climate change is occurring and adapting to, sadly, the climate change impacts that are here already. That involves new skill sets and new activities that we weren’t engaged in at that moment.

I do think we’ve been pioneers in the climate change arena. 

Also, I think we’ve been pioneers in our investment in infrastructure.

I’d say that the third area that I’m proud of is our efforts in diversity, equity and inclusion, but candidly, it’s the area that we have the most work to do ahead of us. Our executive core is diverse but not as diverse as our population is. Our workforce is growing more diverse but not as diverse as our general population. 

It’s interesting. The most diverse subsector of our population is our board of directors. So we’ve started at the top, and they’ve been tremendous partners in conducting seminars and having workshops with our employees and explaining to them that they understand what it meant as a person of color to go from the shop floor to being in the C-suite and now on the board of directors. As a woman, to go from an entry level position to a board of directors member. 

And, you know, their life experiences have been eye-opening for me.


It can be lonely as the CEO because there are so many stakeholders. Very often, one of your most important stakeholders is your shareholder, and they don’t have a present advocate, so to speak, inside the building. Your CFO probably comes closest to being your partner in that. But, oftentimes, that concern for the shareholder really rests with the CEO. Now, the risk is that you become shareholder-focused at the exclusion of other critical stakeholders. 

So, the value chain that we talk about here at PSEG is “Let’s focus on the employee.” Because that employee has to have the skills, the culture, the mindset to deliver what the customer needs.

If you don’t satisfy that customer through your employee, then, oftentimes what the CEO is left with — in order to satisfy shareholders — is cost reductions. And then, as you start making cost reductions, short-term usually, to improve your relationship with your shareholder, and that means you can no longer invest in your employees and that your capital plan for growth requires that investment.


So, now you’re asking your employees to be even more heroic in satisfying the customers. Sometimes that doesn’t work right, and the employee views this as a downward spiral. They’ll see greener pastures, and that’s usually not your underperforming employee seeing the pastures. It’s your talented employee who could do that. So, you get into this downward spiral. 

I would say to the CEO that if you want to satisfy your shareholders, start with your employees because that will lead to a better relationship with your customer, which will produce the fruits and benefits that your shareholders are demanding.

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