Powering with Purpose

DTE Energy CPO Tony Tomczak knows what it’s like to spend the holiday season at the epicenter of a global economic crisis. He and other DTE employees lived through the experience in 2008. 

A diversified energy company with businesses including electric and natural gas utilities, DTE serves millions of people in Michigan. The company is based in Detroit, which has struggled with a decline in American manufacturing jobs, especially in the auto industry. Detroit’s jobless rate in 2008 was more than 40 percent. The average home price was US$7,500, and the city was hundreds of millions of dollars in debt. Elsewhere in Michigan, families and communities dealt with escalating layoffs and foreclosures. 

With DTE executives pledging to use layoffs only as a last resort, the company’s 10,000 employees aimed to become more efficient. Thousands of innovations helped streamline work, eliminate waste and develop synergies.

In the weeks before Thanksgiving that year, more than $200 million in DTE revenue evaporated as a result of lower electric and natural gas usage caused by the economic downturn. “At the time, things looked pretty bleak,” Tomczak admits. 

However, DTE survived the crisis and, in the process, shifted its aspirations beyond providing power — to be a force that powers growth and prosperity in the communities it serves.   

DTE Energy transformed a once-vacant dirt lot in the shadow of its headquarters complex into Beacon Park, which attracts nearly a million visitors each year. 

Climbing Back from Rock Bottom

The economic casualties stemming from the 2008 crisis left DTE in a difficult position. “We hit bottom on just about every front,” Tomczak says. “In a short time, everything we worked on relative to our business plan disintegrated. But, when you hit rock bottom, that’s when you begin to climb.” 

With DTE executives pledging to use layoffs only as a last resort, the company’s 10,000 employees aimed to become more efficient. Thousands of innovations helped streamline work, eliminate waste and develop synergies. By working together, employees offset the $200 million revenue loss and implemented improvement initiatives so successfully that leaders double- and triple-checked accounting systems to make sure the financial statements were correct. 

Although 2009 was a harrowing year, DTE emerged from the Great Recession in better shape. Thousands of Michigan residents, however, were not so fortunate. “Our employees had friends, neighbors and family members in crisis,” Tomczak says. “It left us wondering what more we could do, and we engaged in deep thought into how we could help Michigan and Detroit.” 

Within this context, DTE formulated a new objective: to be “the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve.”  

Our employees had friends, neighbors and family members in crisis. It left us wondering what more we could do, and we engaged in deep thought into how we could help Michigan and Detroit.—  Tony Tomczak DTE Energy

Local Spending Commitment 

After his election in 2010, then-Michigan governor Rick Snyder asked DTE to redirect its external spending toward businesses located in Michigan. However, this endeavor’s success was hard to predict, given the state’s economy and the tumultuous business landscape.  

“At the time, we were spending $450 million each year with in-state businesses,” Tomczak says. “We set a goal of increasing that by $50 million annually. I didn’t know if we could make that goal, but we promised to do our best.” After DTE made this commitment, the company’s supply management team launched a search for Michigan-based suppliers. There was one ground rule: no compromising on cost or quality. 

 “Meeting the $50-million goal turned out to be more achievable than we initially estimated,” Tomczak says. “We delivered on our pledge and then some. Our people took hold of this program with energy and passion, because they knew it was a chance to help our state and make a difference.”

Today, DTE spends more than $2 billion a year with Michigan-based businesses — four times the amount it spent in 2011. According to data from the Michigan Economic Development Corporation, this four-fold increase is estimated to have created and supported 14,000 sustained jobs — more people than DTE directly employs. Because DTE has millions of customers in Michigan, new jobs and businesses laid a foundation for the company’s economic growth.  

Last spring, DTE doubled down on this success by pledging to spend $10 billion with Michigan-based suppliers over the next five years. “This is just our way of doing business now,” says Tomczak. “Our local spending has increased every year since 2011. We’ve learned that we need to be intentional about growing this commitment. There are a lot of great, competitive companies in our state, but we have to put in the work to find them.” 

DTE requires at least two Michigan-based suppliers on new contract bids. The company also encourages existing and new suppliers to open offices in Michigan, if they haven’t already. Internal local spending targets for the company’s largest business units are among the biggest drivers of overall spending goals.

The company also is building on its supplier diversity initiatives by committing to spend $500 million with women- and minority-owned businesses over the same five-year period. To facilitate this commitment, a team of employees seeks diverse entrepreneurs and offers education, mentoring and outreach to help their companies grow. 

DTE hosts seminars to explain its bid process to business owners and provide information on open-bid opportunities. Networking events enable entrepreneurs to meet company buyers and leaders. High-potential suppliers receive training and opportunities to develop relationships with buyers and other company officials. Initially, the supply management team provides guidance. Then, armed with knowledge and encouragement, local business owners take the reins and begin to blossom, generating jobs and opportunity in the process. 

“We have one supplier who grew from employing a few people to employing 300. Another vendor grew from himself and a part-time helper to 50 employees,” Tomczak says. “We’ve replicated this success over and over again — and that’s how we’re generating thousands of jobs.”

The success of its local spending initiative helped DTE earn the Civic 50 Award from the Points of Light charitable foundation for being one of the most community-minded companies in the U.S. in 2018 and ’19. 

Michigan Minority Supplier Development Council president and CEO Michelle Sourie Robinson presents DTE Energy CPO Tony Tomczak an award for supplier diversity excellence. 

Workforce Development

DTE has expanded its community efforts beyond helping suppliers and other businesses. A recent example is a creative solution to equip people released from prison, known as returning citizens, with skills for and connections to an in-demand job: tree trimming. Studies have found that up to a year after being released, between 60 percent and 75 percent of returning citizens are unemployed — that’s more than 15 times the overall Michigan state unemployment rate. Without stable employment, roughly one-third will end up in the criminal justice system again, according
to a report by the Brookings Institution, a Washington-based public policy organization. 

With millions of miles of overhead power lines, DTE depends on tree-trimming suppliers to keep branches off wires to reduce power outages. These suppliers have been faced with a chronic shortage of qualified workers.

The program addresses both problems. DTE partnered with the Michigan Department of Corrections (MDOC) to develop and launch a program to train returning citizens for careers in tree trimming. In the six- to nine-month program, students learn how to safely climb trees, use trimming equipment and obtain a commercial driver’s license. Last summer, the first class completed the program. DTE worked in partnership with the MDOC, a Detroit chapter of the International Brotherhood of Electrical Workers Union and tree-trimming equipment suppliers to establish a pathway to employment for program graduates. 

DTE is also striving to improve career prospects for a broader group of Michigan’s population. Tomczak is leading DTE’s main suppliers in an initiative designed to improve career skills and opportunities for Detroit residents. A decade after the disastrous economic meltdown, Detroit is blooming with new business and construction, yet many citizens have been left out of this revitalization. Nearly half (46.1 percent) of the city’s adult (age 16 and older) population is not participating in the workforce, according to the U.S. Census Bureau — leaving hundreds of skilled-trades jobs unfilled. 

“We have the opportunity — and the responsibility — to provide people with on-ramps into the workforce,” Tomczak says. “In the process, we are rebuilding the middle class and revving up the engine of our local economy.”

A team of procurement officers from eight large Detroit companies,
led by Tomczak, facilitated the hiring of 2,000 local residents through October. The group held its first career fair last summer, which was attended by more than 1,000 job seekers and featured 40 companies with 2,300 available positions. 

Expanding on Community Involvement

Realizing that the company could do more for communities than supplier development and employment, DTE leaders have spearheaded other
projects, including:

Urban revitalization. The company transformed a once-vacant dirt lot in the shadow of its headquarters complex into a year-round entertainment destination for residents. Called Beacon Park because it brings light, energy and motion to west central Detroit, the 1.2-acre space has become a magnet for the community and new development. The park features a restaurant and hosts concerts, food trucks, children’s activities and other events year-round. 

DTE Energy employees logged nearly 70,000 volunteer hours last year by working in community gardens, food banks and other locations.

“Beacon Park has succeeded beyond our wildest dreams,” Tomczak says. “It now draws over a million visitors a year and has really transformed the neighborhood.”

Environmental preservation. In addition to creating more urban green space in Detroit, DTE is working to create a greener future. In September, the company set a bold goal to significantly reduce carbon emissions: By 2050, DTE aspires to have net zero carbon emissions in its electric business. 

As Michigan’s clean-energy leader, DTE is on pace to triple its renewable capacity in the next 10 years and has developed the largest wind and solar installations in the Midwest. To date, the company has invested $2.9 billion in Michigan-made renewables and expects to double that figure in the
next five years.  

“In Michigan, the wind doesn’t always blow, and the sun doesn’t always shine,” Tomczak says. “So, we also need additional, affordable power-generating sources that we can rely on 24/7.” To that end, DTE is building the Blue Water Energy Center, a natural-gas-fueled power plant that will replace three retiring coal plants and provide enough energy to power 850,000 homes beginning in 2022.

Volunteerism. DTE’s community advocacy is amplified by employees who volunteer their time and talents at organizations around the state. Employees work at community gardens, homeless shelters, food banks and thousands of other locations. DTE employees logged nearly 70,000 volunteer hours last year; they view volunteerism as an opportunity to increase engagement and make a difference. 

According to Tomczak, these volunteer hours and DTE’s broader community focus are grounded in the philosophy that solutions to complex problems require participation from every corner of society. “We believe
that the private sector — working together with governmental and nonprofit organizations — must take responsibility for solving society’s toughest problems,” Tomczak says. “We want to be more than just an energy provider. We want to be a resource for the communities we serve and become a transformational force for good throughout the state.” ISM

Lisa Bolla is senior communications strategist at DTE Energy in Detroit.