Friday, July 25, 2008

Inside Leadership

Hire entrepreneurial athletes to lead clean tech startups

From supplying wind power to providing solar energy or utilizing biofuels, clean technology has become the stuff of dreams for environmentalists and venture capitalists alike. As venture capital investment and consumer demand for renewable energy continue to increase, so does the need for talented, enterprising minds to lead these businesses into the next phase of growth.

With the interest in this sector, there is a marked increase in startup activity. Additionally, established companies are looking to reinvent themselves, forcing their businesses to become more entrepreneurial. For firms that are looking to adapt existing technology, even if it is “high tech” — a semiconductor business looking at solar power for example — these evolutionary shifts require a different type of leadership than typically exists within their organizations. As such, recruiting talent for this sector presents special challenges.

To help address these challenges, here are some guidelines to consider when hiring in this sector:

• Look in a variety of sectors to find talent. There are successful individuals leading clean tech companies who have crossed over from many other industries, including semiconductors, microelectronics, specialty materials, chemicals, and even software and communications. The best approach is to source individuals who have demonstrated an ability to reinvent themselves, either by switching industries or by coming to the high tech sector from a completely different area, such as health care.

• Choose “entrepreneurial athleticism” over domain knowledge. The ideal prospects to lead early stage clean technology firms tend to be those who have had prior success as entrepreneurs. Sizing up entrepreneurial talent can be challenging, but it is the most important criteria in the evaluation process. Thus, it is critical to look for broadly experienced individuals who have the ability to conceptualize the whole of a business, not just its individual parts. Look for a candidate with a track record in applying new business models to existing industries and whose behavior is governed by a proactive posture toward execution. Someone who is habitually looking for innovative improvements is key.

• Think creatively. Because the clean tech industry is still nascent, there are few obvious competitors to look to for talent recruitment. This forces you to think outside the roster of usual suspects to find a pool of candidates. For example, when hiring a CEO for a solar company, perhaps the solution could lie in an executive from a semiconductor or electronic materials firm who has both the strategic and customer-facing skills to build and lead a successful team.

• Hire for functional breadth and strategic imagination. Individuals who know how to interact effectively with customers, build management teams, raise capital, and position their companies as leaders are essential. These individuals know how to create a compelling message to make others want to get behind their vision. Clear thinkers with high integrity and determination often prove to be the most successful in these roles.

Historically, the most significant challenge in recruiting for the clean tech space has been finding high-quality entrepreneurial leaders. There were interesting technologies, but the missing link has been a team of growth-oriented, entrepreneurial executives. Fortunately, more of this breed are now migrating to clean tech, and this influx of talent has energized the industry. While still a rare species in the sector, these serial entrepreneurs generally prove to be the most successful leaders in a space.

Given the complexities of identifying talent for this emerging market, firms must adopt a highly customized, active approach to sourcing candidates. There is no substitute for a systematic, research-driven search process. Leverage the network of the CEO and senior management team and the networks of your board and investors when beginning to source senior talent. A common error, however, is to wait too long to look beyond these “internal” resources before seeking professional assistance. Using experienced search professionals who possess both a demonstrable track record of success recruiting in this sector, as well as a proven process for creatively sourcing and attracting candidates across a range of possible target universes can be highly valuable.

By thinking creatively and looking broadly into different industries to source talent, you will significantly increase the likelihood of having a more robust pool of candidates. There are certainly more exciting and rewarding opportunities in clean tech to come, and it is essential to ensure the right talent is on board to capitalize on them when they do.

Executive pay packages
For C-level technology company executives in Massachusetts, salary accounted for an average of only 27.8 percent of their total compensation package. Bonuses, annual incentives, long term incentives and equity compensation, such as stock and options, were among the elements that boosted executives’ total pay.
 

Aaron Lapat is managing director for technology with J. Robert Scott, an executive search firm in Boston. He can be contacted through www.j-robert-scott.com.