Beginnings are wonderful, sometimes even exhilarating. In the beginning, a promising idea and enthusiasm can take a company a considerable distance, garnering exciting publicity and generating solid revenues. The business press abounds with tales of visionary companies succeeding on sheer willpower. Circumstances appear more tolerant of mistakes and wrong turns. Managements can experiment and take more risks.
In the current environment for renewable energy and cleantech, this sounds like a long time ago. We are well into the middle phase. Euphoria is long gone. Companies have a slog ahead of them, often through dangerous terrain that will quickly punish heedless risk-taking. Sometimes it will even punish careful risk-taking.
Companies are struggling to devise the right goals and to assemble the talent to implement them. Renewable energy now requires sharp business methods and experienced managers. This kind of management experience was welcome even during the euphoric stages, but now it’s a necessity.
Take the case of First Solar, the largest US solar company. Its shares have been volatile, hurt by competition from Chinese solar energy companies, but then recovering. The company recently cut both earnings and revenue estimates and announced about 100 lay offs. Some securities analysts cut their estimates. The company has shifted toward providing solar systems for utilities and away from markets supported by government subsidies. Management says its goal is to get “substantially all” of its new revenue from those markets within three years.
A transition like that doesn’t happen easily, even for experienced leaders. Under the circumstances, you want managers who have successfully navigated a tense realignment before, who know the pitfalls firsthand.
One intangible that comes from this kind of experience is a combination of courage and wisdom. Courage is necessary if a company is to endure rough circumstances without getting rattled or flinching at the wrong moment. Wisdom counts, too, because managements need to quickly tell the difference between a difficult patch and an urgent signal to change strategic direction.
It’s a long way from euphoria, but it’s a realm where professionals shine.
A 1941 photo by Irving Rusinow of the US Department of Agriculture of child carrying water in Taos, New Mexico
