GSE Systems

The high-wire act of managing risk in new nuclear technology

When pilots are learning to fly, they often use a flight simulator. It is, after all, much safer and less costly to crash a computer than an airplane.

In a similar vein, GSE Systems constructs highly accurate computer simulators for nuclear and fossil fuel power plants, the petroleum industry and other industrial processors.

These simulators not only help plant operators manage their facilities and prepare for potential emergencies, but also give engineers a risk-free tool for verifying and validating plant changes and experimenting with new and more efficient designs.

GSE Systems

GSE also offers corresponding training and educational services. If operators are the “pilots” of nuclear power plants, GSE makes sure they are always ready for flight.

One attorney, many hats

Some of these simulator applications are new to GSE, and Dan Pugh is among the leaders helping the company refocus its business model. In 2011, after a nuclear power plant meltdown in Fukushima, Japan, left the industry reeling, many companies, including GSE, suffered from the downturn.

Pugh was hired early in 2016 as part of GSE’s leadership overhaul. In the new role, he has helped to cut costs, boost revenues and steer the company’s focus.

Pugh serves as the company’s general counsel, senior vice president, risk management officer and corporate secretary. His duties entail everything from assisting with HR policy to bridging the divide between engineers who “think the big thoughts and solve hard problems” and business leaders who must convert those ideas into profits. He faces the extra challenge of wearing all those hats in a legal department of one.

“It is a bit of a high wire act to be the only legal guy at a public company that’s under budgetary constraints,” Pugh says. But he likes the challenge of juggling multiple roles in a fast-paced environment with little margin for error.

From machines to monitors, the products are changing

One major change at GSE is an evolution in its focus from hardware to software. Simulators were once “these big machines that were primarily creatures of hardware” Pugh says, but that has since changed. “Simulators still have to have the look and feel of a real nuclear plant control room,” Pugh says, “but the primary transformation this company is undergoing is from thinking like a builder of big metal machines to thinking like a builder of innovative software-enabled tools. In some ways, we’re reinventing GSE as a software development company.”

With broad experience working for software and technology-driven enterprises, Pugh doesn’t just handle legal matters or manage risk. He contributes to the company’s strategy.

As GSE refocuses, so do its customers. “We’re pushing for innovation, but our customers are pulling for it, too,” Pugh says. The give and take between GSE and its clientele has Pugh and his fellow executives thinking about new ways to use their simulators and training materials.

For instance, instead of simply training plant operators and preparing them for worst case scenarios in power plants, GSE can help engineers use GSE simulators to model more efficient ways of running their equipment. It’s an innovative approach and one that helps power plants improve operational efficiency and save money by modeling and testing new plant configurations before implementing them, Pugh says.

Responding to the risk model

In these ways, GSE caters to industries populated by companies that have built their entire business models around risk management. According to Pugh, the discipline of risk management has spread beyond financial institutions and is becoming common in a variety of business settings like the energy sector.

Nuclear power plants, for example, must plan for and mitigate operational risks such as human error, natural disasters and breakdowns in internal processes, controls and systems. They also must contend with more intangible risks such as how politics influence policy decisions, or how public perception of a particular power plant’s safety affects that plant’s profitability.

GSE’s simulators and training programs offer a means of directly and indirectly minimizing some of these risks.

However, GSE faces its own risks, operational and otherwise, and it’s up to Pugh, a certified Financial Risk Manager through the Global Association of Risk Professionals, to help the company address them. Pugh says it’s not enough to catalog and be aware of risks. The core of his job is finding effective ways to deal with risks that work in the real world, with all of its variables.

In order to find realistic solutions, “you have to be at the five foot level and the 50,000-foot level,” he says. Before making any decision, Pugh brings to bear all facets of his background: law, business and risk management. Pugh first examines a problem in close detail through the lens of each of these specialties. When it’s time to make a decision, he pans out to the “50,000-foot level” and considers the solution that best balances company priorities and strategies.

Before joining GSE, Pugh served as general counsel and risk manager for ANCILE Solutions, which makes industry-leading workforce performance improvement software. Before that, Pugh was the chief operating officer and corporate secretary for the social networking startup, 40billion.com.

Pugh says he likes working at companies that are fast-paced and constantly changing. While the demand to adapt and turn a profit can create stress, it also spurs creativity. It’s a matter of “how you figure out ways to do the things we are trying to do effectively and within the bounds of the rules,” he says.

Outside work, Pugh doesn’t stop seeking new and different ways to look at things. He unwinds by playing trumpet and sousaphone in a New Orleans-style jazz band, the Wild Anacostias. “I have been a painter and a poet too,” he says. “What matters is finding ways to keep the creativity flowing.”

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Summer II 2020



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