November 4, 2014 in
CEO Q: What are your most important professional achievements at your current company?
Building a talented, dedicated, effective team that works hard to approach every opportunity with discipline and integrity. It’s a qualitative difference that is critical to our success, and makes the long hours more rewarding.
CEO Q: How did you do that?
I believe that our team members find meaning in our success in building essential infrastructure. They also value a clear meritocracy, consistent focus and communication. There is an aspect of self-selection to people who join and succeed at Starwood Energy.
CEO Q: What education or prior experience helped you succeed at your current company?
Certainly, failures have played a very important role. Living with the emotional and financial consequences of failure contributes to a broader context for analysis and decisions, and, in my case, a better understanding of how and when to make decisions.
CEO Q: What lessons did you learn on your way to becoming a CEO?
That the things you hopefully learn early in life really matter: show up on time, treat people with respect, work hard (harder than others), learn from your mistakes, try new things and take manageable risks.
CEO Q: What lessons have you learned as a CEO?
It’s an evolution, but I no longer need to have all the answers. Having many smart, experienced people on the team leads to much better decisions.
CEO Q: What are the key challenges for a CEO?
Hiring, retaining and motivating high performers. I’m sometimes asked if we shouldn’t have a larger team, and I explain that I’m much more concerned about constantly challenging and growing high performers. Boredom, complacency and stagnation are greater risks to our success than being too busy.
CEO Q: How do you overcome those challenges?
By trusting that if we’ve hired well, there are few limits to what our team members can achieve. Provide them with the opportunity to fail and learn from new experiences.
CEO Q: How do you manage the relationship with your Board of Directors?
In my case, it’s my relationship with my Chairman, Starwood Capital CEO Barry Sternlicht, who is a great investor, and bright and intuitive leader. I always try to manage communication so that there are no surprises, and keep focused on the larger context—but always with the numbers to back up our results and expectations.
CEO Q: What advice would you give to rising CEOs?
Outperform expectations in everything you do. There will be mundane jobs and assignments along the way—do them with pride. Pay attention to your relationships. You’ll be amazed at the number of people who show up in influential positions a few decades later.
CEO Q: How do you manage organizational politics, and conflicting personalities, interests and views?
I find that politics are minimized by consistent treatment of people and communication. Conflicting personalities, interests and views are important for an organization to embrace, because vigorous debate leads to a better allocation of resources and decisions. At some point, however, that needs to be checked by making and communicating a decision.
CEO Q: How do you balance and manage various stakeholders’ interests?
Our key stakeholders are our investors, which include leading sovereign wealth funds, pension plans and insurance companies around the world. They are looking for us to remain true to our investment strategy, and communicate frequently, clearly and truthfully about how we are doing, so that is what we strive to do.
CEO Q: How would you describe your leadership style?
Open, informal and results-oriented. I hire self-starters, create clear expectations of results and check in periodically to see how they are doing. I am not good at providing daily direction.
CEO Q: How do you compete in a global business environment?
We compete for capital globally. Our success, I believe, is because of a clearly differentiated and rather specific strategy for value-add investing in energy infrastructure that is showing enduring results.
CEO Q: How do you compete in a recession?
Recessions are often times of excellent investment opportunities, because of dampened market sentiment but good underlying fundamentals. I’m more concerned about over-competing for investments in times of optimism and expansion, such as 2014.
CEO Q: How do you see the future of your industry?
We are seeing a massive shift in power-generation technologies from coal and nuclear, to natural gas, wind and solar. Solar and micro-grids are also catalysts for the disintermediation of our historically centralized power grid. I think we’re looking at dramatic change over the next few decades—and in a capital-intensive, technology-driven business, change provides opportunity.
CEO Q: What advice would you give to policy makers to help the economy and your business?
Stop changing policy every legislative session, and more consistently embrace long-term policy aimed at weaning us from fossil fuels. Energy infrastructure investments often have a 20- to 40-year life, and the constant change of environmental regulation, renewable energy incentives and tax laws stifles capital investment, increases consumers’ costs and does little to leave the world a better place for future generations.