Excerpts from this article featuring Todd Greenhalgh and Madison Kempf, SPMB’s Innovation & Sustainability Practice leaders, were originally published in Hunt Scanlon’s Cleantech/ESG Recruiting Special Issue in May 2021.
What has driven the recent surge in the clean technology, energy and sustainability sectors? How has this growth affected executives in these fields?
A number of factors have contributed to the recent surge in clean technology, energy and sustainability.
- Grid parity has been achieved — meaning that the true cost of renewable energy is equal to or less than the fossil counterparts. This is a result of large scale commercialization and years of production of improved solar technologies, higher output wind turbines and better storage technologies. Transmission, distribution, smart grid, new inverters and the advent of AI and Machine Learning have all advanced dramatically as well and, thus, propelled growth significantly. But this is actually not new or even recent; it has taken the better part of the last two decades to achieve.
- No compromise EV’s. Tesla has proven EV’s are cool: Porsche, BMW, VW and every major automotive manufacturer has put some amazing models on the road. Buses, trucks, last mile transport and even E-bikes are now incredibly capable electric vehicles.
- The investment in technologies accelerated under the Obama administration and now under President Biden’s administration. The United States has recommitted itself to The Paris Agreement and makes an aggressive pledge to cut America’s climate warming emissions in half by 2030 in an effort to reclaim credibility on the world’s stage as a leader in sustainability by driving massive amounts of funding and innovation into cleantech.
- But perhaps most important — capital flow and liquidity is at an all time high. With IPOs, SPAC’s, and acquisitions dominating headlines, the need for experienced executives in this space that can drive these outcomes is greater than ever.
The nascent state of the industry means there are very few senior executives already within the sector who have a proven track record at scale. Where have you been looking for candidates?
Cleantech is far from nascent but it’s certainly having a resurgence. At SPMB, we have been doing work in this space for over 15 years, so we know what translates from industry to industry. While only a handful of companies in this space have seen tremendous scale (especially in the last 5 years), the experience required to scale cleantech is not unlike other industries. We have a tremendous track record of building companies that are trying to do something that has never been done before. As a result, we look to relevant industries that have seen tremendous growth, especially those with asset-heavy business models. Successful, relevant companies that come to mind are Apple and Amazon, both of which have inherently complicated supply chains and continue to push the envelope on innovation. We are constantly looking for companies that prioritize innovation, as those leaders within those companies can typically adapt quicker than others.
What types of roles have been most in demand? Which ones have been the most challenging to fill?
It always starts with the CEO and/or founder, leadership is the key. When thinking about asset-heavy businesses, in particular, there are 3 fundamental pillars that are required for businesses to succeed:
- Financing — the ability to raise money to complete these projects has never been more plentiful
- Sales and/or origination — the ability to find projects that need financing
- Operations — the ability to scale the projects
As a result, sales, operations and finance leaders are the most in demand — with financial leaders being the most scarce and, therefore, challenging roles to fill. As the technology industry continues to experience explosive growth within the private and public markets, IPO-ready finance leaders are in particular demand.
What are the skill sets most in demand?
The short answer, it’s a combination of skills. The most in demand leaders are those who manage people (and hire) well, who are comfortable with hyper-growth, and who are not afraid to roll up their sleeves. Within finance, it’s having the dual experience of strategic long term planning (the more ‘internal’ facing functions), paired with the ability to manage investors and other external stakeholders. Within operations, it’s scale. The ability to grow teams at a near lightspeed pace while simultaneously implementing process, structure and controls. Executives who have continuously expanded their skill sets over the course of their career and who deeply understand people processes tend to be the most successful and in demand.
Will the Biden plan on infrastructure accelerate growth and expansion across the clean energy sector? If so, in what ways?
Biden’s infrastructure plan leverages today’s technology into tomorrow’s infrastructure and will undoubtedly fuel growth and expansion in the clean energy sector. But using the terms “sustainability” or “clean energy” is a misnomer — it’s the most efficient, cost effective way to do things while being responsible stewards of the world we live in.
The plan includes hundreds of billions of dollars in federal spending on climate-friendly renewable energy projects including the build out of 500,000 electric vehicle charging stations across the country along with a number of wind and solar energy projects. However, one key part of infrastructure that’s noticeably absent from Biden’s plan is high-speed rail; this is more efficient and oftentimes faster than traditional air travel.
Perhaps the most meaningful part of Biden’s plan, which would completely transform the US energy economy, is a federal mandate called the Clean Electricity Standard. This mandate calls for 80% of all electricity generated in the US to come from zero carbon electricity sources by 2030, which would effectively mean closing every fossil fuel plant. This would fundamentally change the way we get our electricity. If the mandate passes, the clean energy sector in the United States will enter a new realm of innovation and technology that would be unparalleled.
A plan of this scale should be achieved through a Public-Private partnership to leverage the collective power of Companies and Government without the bureaucracy we have traditionally seen. This leads to more jobs, more innovation and immediate impact towards achieving our climate goals.
If this acceleration occurs quickly, how will talent pipelines be able to keep up with demand?
Call SPMB — we know this space intimately and have been operating in it for over 15 years. What this industry requires and what we bring is creative sourcing strategies, extensive network knowledge, and enhanced talent assessment techniques.
We understand and have seen first-hand that the advantage these companies have is Purpose and Passion…compound that with Profit and you have a triple bottom line — a measurement of the financial, social, and environmental performance of a company over time. And this metric will become increasingly important and attractive to top talent going forward.
From a recruiting perspective, companies will need to identify certain skills in leaders outside of cleantech and in adjacent industries. Instead of a ‘been there, done that’ approach, an assessment based approach to talent will be crucial. For example, while Uber and Lyft are asset-light businesses, they are examples of companies that have seen massive scale especially on the operations side. Looking at leaders from companies like these that have successfully navigated scaling challenges and opportunities during enormous periods of growth will be highly sought after.
Lastly, this industry acceleration presents a tremendous opportunity to enhance diversity in the workforce and re-train workers from industries like coal or other fossil fuels. We have an enormous opportunity to build a better future while also creating a talent pipeline to meet the imminent and approaching demand.
If you’re looking to add to your executive team or seeking general advice on hiring, please contact us directly or visit SPMB.com.