Finding Talent to Capture the Fast-Growth Market of Energy Efficiency

Posted by Rupert on Jan 6th, 2010 | no comments home title

About the Author: During more than two decades as a consultant and entrepreneur in business and sustainability, Rupert Davis has worked at the investor, owner, board and chief executive levels. Today, as global head of MontaRosa’s Sustainability Practice, Rupert combines his finance background with a unique understanding of long-term environmental business engagement issues, including climate change action, triple bottom line entrepreneurship and clean tech development. Read more from this author

BAE Systems, the global defense, security and aerospace firm, is searching for a Director, Energy Management. I was intrigued to read the beginning of the job description for this senior position:

Working closely with potential customers and end users, identify, develop, and execute programs to provide for the energy management needs of defense, government, and commercial organizations, including monitoring and submetering, load shaping, demand response, and interface with external utilities and internal energy sources such as cogeneration and renewables. The Director, Energy Management will have full responsibility for the growth and success of this business area, and will be accountable for formulating strategy, selecting personnel, developing capability, and defining and achieving a financial plan for the business area.

As I have argued in previous blogs, sustainability and the environment can be – in fact should be – seen as massive growth drivers. The issues are no longer simply compliance driven. A wise sustainability strategy drives core business and shareholder value. Firms need the appropriate talent to seize these opportunities. Gone are the days when firms can allow sustainability issues to languish on the periphery. Clearly, BAE recognizes this for themselves and for their customers.

This segmentation of the specific entrepreneurial aspect of sustainability speaks to the maturing and evolution of the marketplace in this area. Nevertheless many organizations, as well as more traditional search firms, still confuse or conflate VP of Environment Health and Safety with Chief Sustainability Officer, VP of Corporate Responsibility or VP of Energy. Yet the skill sets are profoundly different.

Energy efficiency is set to be the most spectacular growth market of the next quarter century due to the factors described below. The talent to capture this opportunity – and the compensation structure to incentivize them – must be entrepreneurial.

Like the founder of a successful start up, suitable talent must be able to spot the future opportunity, write the business plan and strategy, make the case and raise the finances – either internally or externally – pull together an appropriate team and then scale in to the opportunity. The talent BAE needs is a business builder with a track record of success with a start up or new division/product or service line.

Let’s revisit the economics behind this oncoming wave of opportunity. Energy prices are set to shoot up once the world economy kicks back into gear (anyone remember $140/barrel oil?). BRIC-economy demand increases commodity prices across the board from oil to steel to lithium (crucial content in batteries, that store renewable energy and serve electric vehicles, currently being bought up in droves by China). Meanwhile the supply of oil is shrinking, whether in production rates or actual amounts. Though ”peak oil” remains a debated topic, everyone agrees the resource is limited and getting scarcer. Third, governments globally are recognizing the climate change effects of fossil fuel use and are attempting to put a price on carbon to lead us toward a future low-carbon economy. Where nations fail, states and even municipalities are creating their own legislation. Finally, politicians are realizing the beneficial energy security and job implications of making and buying energy at home (renewables) versus buying it overseas from hostile regimes (oil and gas) where the purchasing dollars come back to bite the U.S. This is even though in the short term renewables and local energy will be more expensive. The combination of increasing energy demand, decreasing cheap supply, increasing regulation and incentives, plus national security strategy all push energy price up.

Amory Lovins, the efficiency guru who founded the Rocky Mountain Institute, has been preaching the cost effectiveness of energy efficiency for decades, and has saved global businesses and the U.S. Defense Department over $30 billion in that time. It stands to reason: not using something because you have found more efficient ways to get the same energy bang for your buck is a heck of a lot cheaper than building the infrastructure necessary to produce and distribute more of it. Indeed, estimates range that as much as 50-80% of all energy needs in the U.S. could be met from investing in efficiency (the cheapest solution) rather than more oil/gas/coal/nuclear or renewables.

In a world where energy prices are going up and energy efficiency is the cheapest solution, guess what: anyone who makes energy efficient products, which save their customers money, or offers efficiency solutions, services or software is on to a winning, fast-growth path.

Hence companies from sectors as diverse as defense like BAE, to software giants like SAP and solution providers like IBM, or product creators like HP or SUN, to consumer product innovators like P&G (Coldwater Tide anyone?) or Toyota (Prius) or Whirlpool (energy-efficient washing machines) to large commercial real estate landlords who are saving their tenants utilities costs through retrofitting “green” are all in the very different ways, chasing the same opportunity – efficiency.

If you can save your customers money, you will grow market share and make money. Efficiency is the goldmine of the future in resource-constrained, world.

Finding the talent to make that play pay is the job of a search firm that knows what it is doing.

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