If you want a boring guest, you should skip this episode. My guest has worked in over 10 countries on three continents – in the private sector, non-profits and in government across multiple cleantech sectors. After all of that, you might expect David Arfin would be picked to star in the next round of Dos Equis commercials as “The Most Interesting Man in the World.”
Instead, he’s the CEO of NineDot Energy, a New York-based laboratory for clean energy business model innovation. Today I’m tapping David’s varied, fascinating career for management and leadership tips we can use in running our businesses.
Overview
- Introduction - David Arfin’s background and journey to leadership
- David Arfin’s evolution as a manager
- Influential mentors and life lessons
- On leading a clean economy company
- The CEO’s multifaceted roles and responsibilities
- David Arfin’s practices for maintaining productivity as a CEO
- Navigating hiring in a changing world and identifying qualitative drivers
- Firing and giving constructive feedback
- Business success and climate optimism
So sometimes in life, I've had aha moments and I had one of those aha moments in 2006 when I saw the movie ‘An Inconvenient Truth’ by Al Gore which opened my eyes to what the needs of the planet were as well as to open my efforts as an entrepreneur, as a business person to want to try to do something that addresses the biggest issue of our time, of our generation. It was seeing ‘An Inconvenient Truth’ that led me to think how can the world adopt clean energies at a faster rate.'"
Mike Casey:
This is Scaling Clean, the podcast for clean economies CEOs, investors, and the people who advise them. I'm your host Mike Casey. My day job is running Tigercomm, a firm that counsels companies that are helping move the US economy onto a more sustainable footing. I get to meet the people who are succeeding at building, funding, or advising the most successful companies in your sectors. So we try to bring you usable insights from these leaders so you can apply them to the business of running your business.
Hello, cleantechers. Welcome back to another episode of Scaling Clean. So let me say upfront that if you want a boring guest, you should skip this interview right now because my guest today has worked in over 10 countries on three continents in the private sector, nonprofits, and in government across multiple cleantech sectors. And he even worked with both Israelis & Palestinians. And after all that, you might expect David Arfin would be picked a star in the next round of Dos Equis commercials as the world's most interesting man, but you'd be wrong. Instead, he's the CEO of NineDot Energy, a New York-based laboratory for clean energy business model innovation. NineDot is a compelling company and I encourage you to check them out. But today I'm tapping David's varied, fascinating career for management leadership tips we can use in running our businesses. David, welcome to the show.
David Arfin:
Thank you, Mike. Great to be here.
Introduction - David Arfin's background and journey to leadership
Mike Casey:
Let me start with your background. How would you summarize your career as a company leader?
David Arfin:
So I've benefited from a spectacular education. I went to UCLA as an undergraduate. I went to the Stanford Graduate School of Business and received my MBA there, the Claremont Graduate University, and was a fellow with the Coro Fellows program in Los Angeles. All of those prepared me for some form of leadership. I have been a lobbyist in Washington, DC, and I've been an entrepreneur. And I like connecting with people. It's that extroverted side of me. It's where I get my energy from. And I understand and I think I appreciate the importance of relationships. And it's the people that I meet and the people that I get to work with that brings me energy every day.
David Arfin's evolution as manager
Mike Casey:
If we're going to split screen footage of you managing people when you were a first-time manager. And on the other side of the screen, we had footage of you managing and leading now. What differences would we see?
David Arfin:
Today, I am surrounded by a terrific team of people. And you would see a coach, a leader, somebody trying to instill confidence and make people better at what they're already good at. When I started as a manager, I think I tended to much more micro-manage. And this came from being an individual contributor. So I knew what the job was. I knew how to try to do it. I knew how I would do it. Fast forward a few decades. I am surrounded by very talented people who could do so many things so much better than I could ever dream of and with that I really try my best to let them run with their passion, their skills, teach me, and accomplish amazing things.
Influential mentors and life lessons
Mike Casey:
Tell me about your most important mentors and what you learned from them.
David Arfin:
My most important mentors start with my parents. My mom taught me unconditional love and that is really important as a safety net to have emotionally throughout life and my parents are still very much a part of my life today. They are well into their 90s. My dad is 98. My mom is 39 plus a few and they continue to be a really important part of my life. My father taught me to drive and discipline to accomplish goals. They also taught me about dealing with loss. My sister, their child passed away a dozen years ago and that was very hard on all of us. They taught me resiliency by example how one still creates meaning even after the unthinkable.
One of my mentors was Bob Rosenzweig who was the president of the Association of American Universities. I was a lobbyist in Washington D .C. I remember I spoke up once at a meeting and I was having second thoughts as to whether I should speak up. I went to him one on one and said you know let me know if I should not be speaking in these meetings and he looked at me and said, ‘David, you and everyone else has something to offer. If I ever don't want you to make a contribution, I will let you know.’ And that guides me today, as in our organization in NineDot Energy everyone has a voice, a view, and needs to be heard, and we do everything that we can to encourage presentations and idea generation from every level, and it's not what is typically known as a political organization.
Another important mentor to me has been Roberta Katz. She taught me the 1-10-100 rule. The 1-10 -100 rule is when you identify an issue early - it costs you a point. If you let it sit and you ignore it for a little while, it costs you 10 points. If you really let it fester and the problem continues and you don't address it, then it costs you 100 points. And this is true with employees, with decisions that are going sideways, and making the hard decisions earlier is something that Roberta taught me.
Mike Casey:
You've worked in a number of clean economy companies, both as an investor and a company leader. What drew you to this sector?
David Arfin:
So sometimes in life, I've had aha moments, and I had one of those aha moments in 2006 when I saw the movie ‘An Inconvenient Truth’ by Al Gore. That opened my eyes to what the needs of the planet were as well as to open my efforts as an entrepreneur, as a business person, to want to try to do something that addresses the biggest issue of our time, of our generation. It was seeing ‘An inconvenient truth’ that led me to think how can the world adopt clean energies at a faster rate. At that point, I was getting a new roof here in California and I wanted to get solar on my rooftop, I went out and got three quotes from various sales people and the best simple payback I got for that investment was a 33-year payback so I understood why solar had not been adopted more broadly because everybody would like to have it but it just did not make sense. At that point, I started talking with solar installers and doing some internet research I came up with the idea of third-party ownership on a residential rooftop which meant that you, Mike, might not own the solar system on your rooftop but I, as a business, can own it and if I did I would be able to take advantage of the incentives such as the investment tax credit. Then in 2006-2007 it was a 30 % credit but capped at $2,000 and on a $40,000 average system money was being left behind. There was also the element of depreciation and this is a little bit wonky but by changing the ownership model we were able to change the payback period from 33 years to right away and it made a big difference for me to adopt solar for a solar city that I brought this to and I think for the residential solar industry.
On leading a clean economy company
Mike Casey:
From what you've seen and heard is leading a clean economy company different than leading companies in more mature sectors? And if so, how?
David Arfin:
Yeah, leading a clean economy company is very different because it is very policy-dependent, both for the good and for the bad. The policies that affect whether or not your product or service is going to be adopted and be valuable depend on policies made at the public utilities commission level, the state level, the utility level, and the federal level. All of these are moving pieces and they're moving regularly so it is the ecosystem of policies that can enable or destroy opportunities for the adoption of clean energy. I think that's fundamentally different than moving widgets around the world.
Mike Casey:
You quit your job tomorrow and you become a lecturer at NYU's Business School. How would you describe the role of the effective CEO to your students? What are the parts of the job and how would you rank them in importance?
David Arfin:
Leading a clean energy company requires one to be very nimble and adapt to market changes and drive market changes all of the time. So our industry depends on policies at the local level, the state level, the federal level. It depends on technologies. It's all a big puzzle that has to get put together of technologies and policies and economics and consumer behavior. Those dynamics make it continuously interesting and I think that is fundamentally different than looking at a process in a big company and finding out, ‘Gee, this unit is underperforming a little. Maybe we could tweak it or change it or here is a process. For us, every week, every month creates a new set of challenges and a new set of opportunities. And it's a nimbleness and putting together pieces of this puzzle that matter.
The CEO's multifaceted roles and responsibilities
Mike Casey:
In that hypothetical classroom, several of your students approach you to ask for the most important advice you'd give them to track a career that ends them in a position that you have now. What advice would you give them?
David Arfin:
Find what moves you, that you're passionate about, that you find interesting, that you find meaningful, and you will have a higher chance of hitting success. Find people who share your passion. Join teams or lead teams with people who share that vision. There will be difficult moments in every business, in every project, and at some point having a community at work with shared values and trust will enable that team to get through a challenging problem and to solve the problem better or to learn from it so that it can make strides when it hits the next hurdle.
David Arfin's practices for maintaining productivity as a CEO
Mike Casey:
What practices have you adopted to maintain your own productivity as a CEO? This is a question that we've been asking recently. We've heard some of the most interesting responses, everything from attending opera to getting up at five o'clock in the morning, to making sure they hike every weekend. What are the practices that you've found to keep David Arfin performing at the highest possible level in his role as a CEO?
David Arfin:
So, Mike, I'm gonna challenge the question a little bit and answer it by saying this is not being a CEO or being anybody else in the company or the community or organization. My formula is exercise. That's hiking, it's biking, it's spinning. When I do that regularly, I'm better in every way. I believe in staying connected to the communities that you are affiliated with or connecting with communities. Those could be educational, religious, political, avocational, it doesn't matter, but humans connecting with other humans is incredibly important and enriching. Third, I would say, staying connected in your personal life, is the best that you can. I am very fortunate with my family life and my personal life to have come from love and to be able to continuously receive and give love and that makes it easy.
If I have a vice in life, it is that I am a passionate sports spectator. I love my team and I'm a fairly non-emotional person until I am in the stadium or the stands and I will go a little crazy, that is my outlet. I think it's because I can be intensively and passionately involved with something that is utterly inconsequential and professional and collegiate sports as a spectator is utterly inconsequential and yet I do everything I can to plan my calendar around it and my life events because there is nothing like being at a San Francisco Giants World Series game or a 49ers game or a Golden State Warriors game or a UCLA Fight Fight Fight basketball game at Pauley Pavilion.
Navigating hiring in a changing world and identifying qualitative drivers
Mike Casey:
Hiring is always cited as one of the most challenging parts of leading companies. What have you learned about making new hires?
David Arfin:
It's an evolving challenge, especially in this new post-COVID hybrid world. It creates lots of opportunities and lots of challenges because it's not just the hiring that matters, it's the onboarding of these people and building teams of trust. We are only going to be successful at NineDot Energy if we continue to have an appetite for risk-taking and for creating options in projects and technologies. It's making a series of bets that we hope are going to pay off. When you hire from big companies, you often will find people who have been trained to be risk-averse. Don't make a mistake. I think NineDot Energy is a hybrid of Silicon Valley. Make mistakes, fail fast and New York creates options where if things move in the right way, there's a substantial economic and climate payout and if they don't, then you have lost a little bit here, have learned from it, and can apply those lessons to new opportunities.
Mike Casey:
Do you have a go-to interview question? And if so, what is it?
David Arfin:
An interview with me might look different because I am looking for some of the qualitative drivers that make that interviewee the person that he or she, or they are. I want to know what motivates this person. I want to know how they solve problems. A typical interview will rely too much, in my opinion, on the formal education process as proxies for whether or not that person can succeed.
I'm more interested in their life narrative as they interpret it and choose to share. I'm interested in where they are heading and whether I want to be rowing in a boat with those people. I've learned a lot about our society in the last five years. Part of what I have learned is the amount of bias in our systems and in some of the issues that drive systemic racism and some of that results from unconscious bias. So as a company, we believe it is very important to do behavioral interviews that eliminate, or at least weed out the best that we can some of the biases so that we can hire, train, and develop a new cohort of values-based learners who come from different environments.
Firing and giving constructive feedback
Mike Casey:
What's the guidance you'd have on firing people?
David Arfin:
Firing or giving negative but constructive feedback is one of the hardest things that one can do. Don't wait too long to give constructive feedback evaluations. Try the best that you can to have a situation work, but it goes back, I think, to the 1-10-100 rule that Roberta Katz taught me several years ago. When you have an issue with an employee - address it quickly, that costs you a point. When you have a situation that grows and it is becoming a little more systemic and if you don't address it, that costs you 10 points. If you really let it fester and it affects not just this person and their group, but others in the company or the organization, that costs you 100 points. So my guidance for managing people who are underperforming your needs and expectations is to not wait too long before you have those difficult conversations.
Business success and climate optimism
Mike Casey:
We like to close with two broad questions. The first is, in your experience, is success in business more reliant on what you choose to do or what you choose not to do? And has your work around so much of this world left you as a climate optimist or a climate pessimist and why?
David Arfin:
It's what you choose to do. I am so grateful and I try to share this with my team whenever I can. I am grateful for what we do, who we do it with, and how we do it. All of those are in the what we do column, none of them are in the what we don't do column. Climate is complex. One can easily get overwhelmed by all the things that have to happen. I am one person, we are one company. We are very fortunate to be able to make a contribution to the problems that we are working on solving. We're not going to solve every problem. We mostly stay in our lane. Maybe we move a little bit to the lanes next door to that. But our mission is to do good things, do them with great people, and do them in a way that we can be proud of. So I'm a climate optimist. Every morning I get to work with exceptional teammates who are inspiring, who are passionate, and talented, and we get to solve one set of problems on a day-to-day basis. That makes me optimistic. What makes me even more optimistic is the young people, whether you put them in a bucket of Millennial or Gen X, Gen Y, or Gen Z. These young people care deeply about the planet that they are inheriting from us, and that they are going to pass on to their future generations. The interest level and the caliber of persons who want to work to do something to preserve our climate inspires me every day and gives me great hope that the climate issues are going to be addressed by people with the right motivations, the right skills, the right talent and the right commitment to do good for the climate.
Mike Casey:
David Arfin, it's been a pleasure talking with you. I want to thank you for the great work you've done around the globe to move it to a more sustainable footing This has been an absolutely fascinating discussion and I'm really grateful to you for your time
David Arfin:
Thanks, Mike, great to chat with you.
Mike Casey:
Thanks for joining us for another episode of Scaling Clean, the podcast for clean economy CEOs, investors, and the people who advise them. I'm your host, Mike Casey. Our producer is Brian Mendes. If you like what you hear on Scaling Clean episodes, we'd appreciate it If you can give us a five-star rating and leave a comment wherever you get your podcasts. Until next time we wish you all the best in your cleantech endeavors.