Lots of companies are focused on sustainability, but who will lead them?
By Neil Sims and Adrian Choo, Boyde n
Going green has gone commercial. Environmental sustainability is no longer the exclusive purview of non-governmental organizations and policy wonks. Today a raft of young ‘cleantech’ companies is emerging to bring a wide range of green concepts to market in fields such as biofuels, solar, wind, biomass, tidal power generation, conservation and many other categories.
These companies have financial backing, innovative engineering and technology, and the widespread support of an increasingly green-conscious public.
What they often lack are leaders.
Where do you find the leadership to build a lean, fast-moving business based upon sophisticated science? There are a limited number of seasoned executives with scientific and environmental expertise and the qualities needed for successful entrepreneurship.
Scientific entrepreneurs, or entrepreneurial scientists?
Scientists can be recruited from the traditional biotech and energy companies, but these individuals may not survive in the world of the start up. The labs of large, multinational companies and academic research efforts at major universities or governments are great at churning out innovations that become the basis for startups. (Technology behind superhot battery maker A123 Systems (AONE), for example, was invented at MIT and incubated at Boston University.)
But often the leaders who emerge from such institutions are ill suited to tackle the obstacles presented in starting a company with limited cash, working the extended hours required to turn an idea into a sustainable company or making the Sophie’s Choice trade-offs normally required to transform compelling science into a viable commercial offering.
Andres Wydler, CEO of Real Green Power, a wastewater treatment and renewable power generation company, offers some interesting insights. “We have no real choice but to take some risks as we build these companies,” he tells Boyden Global Executive Search.
“When it comes to the science, we also must have subject matter expertise,” adds Wydler, who served as a software executive earlier in his career. Many observers believe that droves of qualified people will migrate from legacy industries to build the cleantech executive corps. Yet difficult decisions remain. For example, should the leadership of a biofuels company come from the biotech sector or an oil and gas monolith?
Wydler reveals three strategies he uses for executive recruitment. First, he looks for non-vocational experiences that hint at a candidate’s resourcefulness. A candidate becomes interesting to him, for example, if he or she has been active in leading a non-profit organization or a sports team where finances are limited and the individual can demonstrate an ability to achieve goals by leveraging creative resources and leadership skills.
Second, he looks for a candidate who might have led an innovative or exploratory effort within a larger organization. The imperatives for entrepreneurial success are similar because often these efforts are under-funded until more reliable outcomes can be predicted. The willingness to risk the politics of potential failure within the corporate or academic environment are often a good indicator of the candidate’s ability to be successful entrepreneurially.
Finally, Wydler and the Real Green Power team shifts discussion away from the interviewee’s strengths. For instance, at a meeting with a scientist, Wydler might ask questions related to legal issues or marketing strategies. The goal is to understand how broadly the candidate thinks. The company does not hire individuals who can only comment thoughtfully in their area of expertise.
Actual data support Real Green Power’s executive search strategies. Stanford University’s continuing studies program on cleantech entrepreneurship recently conducted an informal survey. Of the 27 cleantech CEOs surveyed, nearly three quarters of the executives transferred from other industry disciplines to their current positions. The common denominator, according to the data? Entrepreneurial competencies. Some moved from legacy industries that were logical, related to their area of environmental focus.
From infotech to cleantech
Others have come from industries with no direct correlation to cleantech initiatives. Shai Agassi, CEO of Better Place, for example has built an international team of 17 executives without regard for their individual histories in the electrical transportation sector. Agassi, himself, migrated from the world of enterprise software and few members of his leadership team joined with relevant domain experience.
The dearth of cleantech leadership is a global challenge. In Asia, for example, Boyden clients focus on adaptability, business acumen, and most importantly local business culture. These seasoned executives bring critical value to cleantech startups by “cross-pollinating” proven ideas from “old world” industries with newer, innovative solutions. Though, the pipeline of potential top executives is building. For instance, Lars Buesching, a Managing Director for Norway-based Scatec Solar, previously served as a managing director for chemical company Mankiewicz & Co. In China after beginning his career in management consulting with IBM (IBM) and PricewaterhouseCoopers. Mr. Buesching brings a healthy perspective to Scatec’s operations worldwide with his deep understanding of Asian culture and management,
CEOs who have made a shift to the cleantech sector will need to augment their companies with the essential knowledge of their core technology and distribution models. The right executives will offer CEOs significant leverage by bringing proactive management with targeted skills but must be filtered for entrepreneurial indicators that provide evidence of a candidate’s potential for success in a smaller, heavily leveraged environment.
Sims is Leader of Boyden’s Cleantech Initiative and a Managing Director with Boyden San Francisco. Choo is a Principal with Boyden Singapore. Boyden is a leading global executive search firm with more than 70 offices in over 40 countries.