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UTILITY WEEK | 13TH - 19TH NOVEMBER 2015 | 7 National Grid special report Who is John Pettigrew? National Grid staffers have been known to call themselves "Griddies" – and they don't come much Griddier than John Pettigrew. With 25 years at the company under his belt, he's steeped in the culture and history of the unique organisation. Pettigrew has had a varied career at National Grid, with stints in all the major busi- ness areas. He's also enjoyed a rapid rise through the ranks, being appointed direc- tor of engineering in 2003; chief operating officer for the US business from 2007-10; chief operating officer for the UK gas distribution businesses from 2010-12; and UK chief operating officer from 2012-14. The CV reads like a checklist for the top job, and indeed Pettigrew has long been seen as a potential successor. Pettigrew is well liked and respected by colleagues – though his marked differ- ence in personality and style from current boss Steve Holliday has been cause for comment. "Steve is an extrovert; John is much more introverted," says one former colleague. "He loves detail – as a manager, he's insatiable for detail and loves pro- cess." Pettigrew has been instrumental in rolling out process excellence across the business, and is known for his focus on metrics and numbers. His challenge will be stepping out of the detailed delivery required of an efficient Number Two, and into the more hands-off leadership role, which requires greater interface with politicians, media and the markets. As one former colleague says, "When you're the chief executive of a FTSE top 25 business, you need to present a different face to the world." This is particularly true as the UK enters a time of tight capacity margins and transformational change to the system, when the role of the company's chief executive as a figurehead will be more important than ever. Pettigrew's inexperience relative to Holliday's lengthy record has been noted by investors. On the announcement of his appointment, one fairly typical quote, widely reported, from Jefferies' Peter Atherton was: "One concern over the appointment will be the relative lack of experience of Mr Pettigrew, who was only appointed to the board of National Grid in 2014." That said, Pettigrew is a safe and popular choice for Holliday's replacement – and the industry is unanimous in wishing him well. a situation when government, Ofgem and National Grid are all pointing at each other." Fundamental questions about the man- agement of the power system arise from these changes, and time to answer them is running out. One option is the introduction of a whole system architect. Certainly, as the system's complexity increases exponentially, some kind of whole system approach must be agreed between government and industry. This will happen on Pettigrew's watch and, given the concentration of engineering skill and know-how in National Grid, will be very much influenced by the organisation. There remain perennial questions about the role of the company. Under Holliday's leadership, it has become a trusted adviser on policy, with a key role in government initiatives such as EMR. Does this create a conflict of interest with its commercial objectives? The question has been raised a number of times, though one senior indus- try source comments: "If someone else were asked to advise, who would it be and where would they get their people from? The num- ber of people who really understand this T he announcement that Steve Holliday will be stepping down as chief executive at National Grid was no great surprise, although the identity of his replacement, John Pettigrew, was less widely predicted. Having taken up his role in January 2007, Holliday can feel extremely satisfied with National Grid's progress in the intervening years. At the operational level, one of his enduring achievements has been to ensure that the lights have stayed on, despite ever lower plant margins. With virtually no baseload plant currently under con- struction, Holliday's successor will inherit the unenvi- able mantle of being the ultimate electricity ring-master. Indeed, only last week there was near panic as National Grid used its "last resort'" powers to dampen demand. But Holliday will be less satisfied with the US part of National Grid's business. The diverse US operations still need attention, despite improvements of late. They are not helped by seemingly never-ending regulatory issues. For investors, Holliday can rightly point to a very impressive performance during his near nine-year tenure, especially because much of it has overlapped the deep recession from 2008 onwards. National Grid's total shareholder returns are up by more than 130 per cent during the period, equating to a near 10 per cent year-on-year growth: generous dividend payments have accounted for much of that increase. While National Grid has undoubtedly benefited from strong and effective leadership under Holliday, two external factors have been crucial. First, the advent of the recession in 2008 highlighted the benefits of defensive earnings and assured divi- dends – an investor scenario seemingly tailor-made for National Grid. By contrast, many electricity generators have incurred serious losses due to falling energy prices. Second, in 2013, National Grid unquestionably secured a very attractive eight-year regulatory settlement from Ofgem for its core transmission business. But taking over as chief executive will be no sinecure. For Pettigrew, getting through the next few winters on very tight plant margins will be challenging, especially if there are several contemporaneous plant outages. He will also preside over a c£3.5 billion annual investment programme, most of which is UK-centric. As for Holliday, he is leaving the EU's most valuable utility on a high. Aer all, at privatisation in 1990, it and the 12 regional electricity companies combined were val- ued at £5.2 billion. Today, National Grid's market value alone is c£35 billion. Nigel Hawkins, director, Nigel Hawkins Associates "Holliday is leaving the EU's most valuable utility on a high." Analyst view Nigel Hawkins continued overleaf