Episode 15: Servant Leadership with Lightsource bp CEO Kevin Smith

Kevin Smith, CEO of Lightsource bp, is one of the few people in cleantech who's led two major solar companies. Kevin’s a great interview in part because of the depth of his background: fossil fuels and renewables, Europe and the US, and experience in two different types of solar. Throughout it all, he's proven to be an impressive company builder who draws consistent praise from the people that work for him.

That’s why I wanted to learn more about how Kevin does it:

5:34 – A vital, underused leadership skill: Analyzing – instead of assuming – how much management a team member actually needs. This varies from person to person.

15:59 – A “blame-free” workplace is imperative to encourage risk taking, but it’s not accountability-free.

20:08 – Team diversity is the right thing to do for society and for business because it creates an environment that fosters innovation.

21:44 – Servant leadership – the idea that the leader needs their staff just as much as the staff needs a leader – gives a company a competitive edge.

31:35 – When it comes to tough business decisions, making the wrong choice is better than no action at all. Some of the best lessons come from mistakes.

Find out more about Tigercomm’s work at the center of the cleantech industry at www.tigercomm.us.

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Overview

• Introduction
• Career Summary and Experience
• Balancing Management and Individual Autonomy
• Assessing Management Needs and Over-Managing
• Mentors and Learning from Others
• Transition to Renewable Energy and Environmental Concerns
• Managing Diverse Teams in a Dynamic Sector
• The Evolving Role of Oil and Gas Companies
• Cultivating a Supportive Organizational Culture
• Acting as a Steward for Employee Careers
• Hiring, Diversity, and Servant Leadership
• The Challenge of Firing
• Assessing and Transforming Leadership Teams
• The Importance of Decision Making for Success

Introduction

Mike Casey:
Hey, cleantechers. Welcome back to Scaling Clean, the podcast, that gathers company building and management tips from the most accomplished leaders in cleantech. Today, our guest fits that build to a tee and he's someone I've wanted on the show since we launched. Lightsource bp CEO Kevin Smith is one of the few people in cleantech who's led two major solar companies. But what makes Kevin such a great interview is a depth of his background, fossil fuels and renewables, Europe and the US, two different types of solar. And throughout it all, he's proven to be an impressive company builder who draws consistent praise from the people that work for him. And I wanna learn more about how he does it. Kevin, I'm delighted to have you on the show.

Kevin Smith:
Great, thanks Mike. Happy to be here.

Career Summary and Experience

Mike Casey:
Start with your background. How would you summarize your career as a corporate leader?
Kevin Smith:
Well, I can provide maybe a 20-second summary. I've got an engineering degree from Purdue and a master's in business from the University of Chicago, and really spent 40 years, it's hard to say sometimes 40 years in the energy industry, right out of college. Worked on conventional fossil fuel projects, nuclear design, really the first half of my career was with regard to pre-renewables. And I was in leadership positions in those companies as well, some C-level positions. Moved into renewables in 2004, and then was heavy into solar in 2008. And so have a kind of a full range of regions, as you mentioned, built projects in 12 or 15 different countries, both fossil fuel and renewables. And I think that gives me a really good basis to understand where projects work and where they don't work. And for the most part, I would consider myself really a developer as I've been on the development side of the business for probably over 50% of my career. So developing new projects, finding areas for projects, where projects work, power contracts, permitting activities, all those kinds of things. 

Balancing Management and Individual Autonomy

Mike Casey:
Tell me about the first time you were somebody's boss. What mistakes do you recall making and how have you changed your leadership style over the years?

Kevin Smith:
Well, I would say I'm still making mistakes. So I think that the most difficult part that I see is there's a whole lot of issues that take a balanced approach. And I think that finding that right spot, that balanced approach is different in different organizations and it's different with different people. So it's providing direction without over-management or micromanagement. So it's providing a balance between setting performance targets, but not being too invasive into their personal lives or their work-life balance. So I think the whole development of management style and the leadership style is trying to balance those, a lot of different aspects of the individuals that you're dealing with and with the organizations and the organization needs. And as I said, it's a bit of trial and error.

It's trial and error with different companies, and it's trial and error with different individuals, what works best for them. Do they need a lot of direction or do they do a whole lot better if you're there as an advisor for them, too kind of approach. So I think that's probably one of the biggest changes in my style is I'll say at least recognizing that there's some trial and error and some balance that really isn't clear cut, that you need to maintain in organizations and in individuals.

Assessing Management Needs and Over-Managing

Mike Casey:
May ask a follow-up question? You use the term over-manage, that term is unique to you, but the concept I've heard from many others. Is there a set of indicators or things that you notice that tell you you're getting to that ideal amount of management for one employee, which surely will be different than another employee? It seems like that's a really hard thing to do as a company leader, is to know how much management somebody needs. So how do you size up somebody's need for management?


Kevin Smith:
Well, as you rightly point out, it's a difficult mix and it's a difficult activity to try and find exactly what the right mix is for those management. As you are dealing with new employees or existing employees that have moved over into your domain, it's, like I said, when we discussed the last concept, it's a little bit of trial and error. So you need to start out fairly broad. I'll say prove myself to the employee first so that the employee can recognize the value that I can add. And I like to gauge some of my management based on their request for management or their request for support in various activities.

So do they need support in a negotiation? Do they need support in managing another employee? Is there a difficult activity that they're dealing with that they could use some advice on, or somebody sitting with them shoulder to shoulder? So it creates a bit of a slower process to gaining confidence and trust in the employee but it protects you from kind of rushing in too heavily, and then all of a sudden you've alienated that person and now you're kind of trying to recover as opposed to kind of a gradual build of trust and supervision and advisory services and those kinds of things.

Mentors and Learning from Others

Mike Casey:
Who are your most important mentors and what did you learn from them?

Kevin Smith:
Interestingly enough, I would probably say I don't think I grew up in a kind of mentorship environment. When I look back early in my career, halfway through my career, I was advancing into VP level and C level kind of positions. And I think back on some of the people that I dealt with - brilliant, some brilliant people. But I'm not sure that mentorship was kind of a buzzword back in the eighties and nineties. Maybe it was, but it wasn't instituted very successfully. So it was a little bit of survival of the fittest, which isn't a good way for things to roll because you end up with people getting left behind who have a lot of value that they can add. So I wouldn’t point to any particular people in my past that I would say were good mentors for myself, it was a little bit more of survival of the fittest.

Transition to Renewable Energy and Environmental Concerns

Mike Casey:
You started in traditional power generation and then you moved into renewables. What drew you to renewables?

Kevin Smith:
Well, I spent my entire career in energy, and energy markets have transitioned over the years. Environmental aspects have become a critical part of it. The reality is that climate changes, it’s here, and it's affecting how we do things every day, weather patterns, economics, and all those kinds of things. So I think that realization that there were better options in the early 2000 and 2004, I headed up the development activities for a company called Invent Energy, which at the time was pretty much a startup, kind of fewer than 10 people. Now they're kind of well over a thousand. And we were doing conventional natural gas-fired projects, and it was just the early stages of the wind business.

I think we did 20 or 30 megawatts the first year, and then three years later we were doing a billion dollars a year in wind projects. And so having that experience on developing both, say, natural gas projects at the time and renewable energy projects, it was pretty clear to me that I wanted to be on the right side of history, which is the growth in the renewable energy a part of the business. So wind moving into solar and really make an effect on how our power generation mix was implemented in the US and internationally. And so I think recognizing that there were better choices and that those better choices would result in a really better environment and better long-term sustainability for the US and the world, was really the luck for me.

Managing Diverse Teams in a Dynamic Sector

Mike Casey:
Is running a renewable energy company different than running a company in a more mature sector? And if so, how?

Kevin Smith:
I mean, in a lot of ways, there’re a lot of similarities. I think from a management standpoint a few of the things I've developed over the years are that individual performance isn't necessarily as important as team dynamics and trust among the team members. So you can have really high individual performances, that may or may not result in an overall better result for the company. So it's developing that trust between staff and myself and between the staff members and themselves so that you've got a better team environment. I think that's universal across organizations. I think diversity issues that have really emerged as a great aspect of organizations provide diversity and opinions and different backgrounds and help in problem-solving those kinds of activities.

So that's kind of universal, I think if you look at renewable energy as a technology business then you see it having things that are more driven by what you see in the tech sector, which is very quickly moving markets, changes in markets, changes in technology, improving technologies. The technology that worked five years ago doesn't work today. Whereas, when I was doing conventional energy projects on the nuclear or the natural gas side or even coal, those technologies changed very, very slowly. Over a decade you'd see a 1% increase in steam turbine efficiencies. Whereas on the renewable side, you see a lot, lot quicker changes in technology. So the renewable side is more of a tech business than conventional energy projects. So I think you've got to deal with those types of activities, fast-moving, changing markets, new technologies. So you've gotta really be able to adapt as an organization and as individuals to look at the next best thing in that particular sector, or you're gonna get left behind.

The Evolving Role of Oil and Gas Companies

Mike Casey:
At the risk of building in an overstatement to this following question, let's assume that tomorrow you meet your long-lost twin brother, whom you never knew you had, he is running an oil and gas company, the same size, as the company you run. Given what you just said, so you confer notes what it's like in a day in a life of a CEO, it sounds to me like your twin sibling would say, I have to spend more of my time on executing what we know how to do well in a mature business, and you would have more of your time having to deal with strategic challenges in a more dynamic sector. Do you think that's true?
Kevin Smith:
Yeah, I would think that's true. You know, certainly, there are lots of changes in the oil and gas sector, but mostly as a result of the rise of renewables. So you see a lot of groups within the oil and gas sector that are making changes, responding to the markets that are now demanding cleaner technology. So the fact that renewables, solar, and wind have become in a lot of markets the most cost-competitive energy supply is forcing what was a very relatively stayed mature market and causing them to have to react as well. So some of the aspects that we see in renewables, which is fast changing markets and technology, the oil and gas side are gonna have to look at that as well.

And a lot of them are now investing in renewable energy technology. So in Lightsource bp, where I'm CEO now, our 50% strategic partner is BP, and BP’s looking at all kinds of different technologies, not only just solar with Lightsource bp, but EV charging and green hydrogen and all kinds of new markets that 20 years ago it was, how do they get the most out of their drilling programs and upstream and downstream production activities. Now it's more like what technologies are we gonna see in the next 5 to 15 years that are gonna push oil and gas into a lesser part of the energy chain.

Cultivating a Supportive Organizational Culture

Mike Casey:
You quit your job, you become a guest lecturer at the University of Chicago's Business School, tomorrow you're gonna have a lecture called the role of the effective CEO. What would you tell your students is the role of the effective CEO?

Kevin Smith:
Well, I touched on it a little bit already, but I think one of the big parts of the business that I try and create within an organization is a secure environment that kind of fosters new ideas and risk-taking. I talked about trust earlier, you need to create an environment of trust, not only between myself and the employees but also amongst the employees themselves, so that people have each other's back. They understand that there are some challenges. You get a hard draw on a project or a negotiation. You need support from the rest of the team. That old style management where it was - let's have everybody compete against everybody.

And the kind of winners and losers will emerge. That doesn't really work very well. You need to really create a team environment. You need to create a secure environment, I talk a lot about blame-free environments where people are gonna make mistakes and they need to feel that they can make mistakes and it's not gonna cost them their career. That they can move forward from mistakes. We can look at it as a team and say, okay, how do we make sure we don't make that mistake again? And what additional support do we need to give to our team members to do that? So I think it's a secure environment. It's a blame-free environment.

It's a trust culture within the organization. Those are all really hard things to do. And we're still trying to make sure that we're hitting those notes properly as we move forward. So it's a really hard thing to create that kind of culture. As long as everybody recognizes that's the goal, then it helps as we move forward. I think the other thing that the CEO role is, he needs to be perceived that he’s, I'll say, the steward of the individual's career. So the CEO and other senior members, they're making decisions on how to help people through their careers, what promotions they get, salary increases, what additional training they should get. And I think people need to feel comfortable in that environment that their supervisor or their CEO is looking out for them and is a steward for their career so that they have a certain amount of control themselves, but in other parts, they don't have as much control as they'd like and they're depending on those that have kind of gone before them to kind of help pull them up.

Acting as a Steward for Employee Careers

Mike Casey:
So what I hear you saying is the first thing you share with these University of Chicago MBA students is the CEO's most important focus is the culture that he or she creates among the employees who report to him or her.

Kevin Smith:
That's exactly correct. Yeah.

Mike Casey:
What are numbers two and three, I don't wanna take you down on a list of 20, but what would come in second place as the most important thing for a CEO to be doing?

Kevin Smith:
Well, there's a certain decision-making part of his role as well as her role. And what projects to go after general setting strategy and setting targets, setting individual targets for his or her senior staff. So, there's certainly a business side of it that the CEO needs to have a strong level of understanding of the business. So I think number one though is really setting that culture, bringing in the right team. The CEO is gonna bring in those senior leaders and promote people in those senior leadership positions. So, it's probably, culture one, team two, business acumen three probably.

Hiring, Diversity, and Servant Leadership

Mike Casey:
That’s interesting. One of the things you talked with me about before we got on this call was the business case for diverse teams. I've seen you, and I've heard of you advocating for this in private to your colleagues within the company. What's the business case for diverse teams? Not the moral case, but the business case?

Kevin Smith:
Well, diversity issues and having diverse teams. I mean you can even Google it and say, okay, what's the value of having diverse teams? And the right answers come up. You bring in a variety of people from different backgrounds and different education levels and different areas of society, and you end up having better problem-solving, better leadership activities, more of a changed environment that can be handled so that diversity of staff provides a diversity of opinions and provides more options, more innovation, better problem-solving. That's the business case, setting aside, what's good for society and good for mankind. The business case is, as I said, you can Google it, that diversity provides that innovation and better problem-solving. And certainly, we're experiencing that as we walk through our kind of day-to-day activities.

Mike Casey:
You've also introduced me to the concept of servant leadership. I think you used that term, but you used other terms as well. Where did you learn this idea and what are the benefits you have seen in using it as an ethic?

Kevin Smith:
It's probably, I don't know if I learned it or just lived it kind of over the last number of decades, surviving in very competitive markets as a leader, it didn't take me very long to figure out that a lot of instances, and maybe in most instances or in all instances, as a leader, you need the staff more than they need you. And I think if people recognize that as a leader, you are looking at them to provide as much input into the strategies, into the goals, into the success of my career as they are looking for me to help them provide advice and advancement so that they succeed in their goals and their careers.

So I think it's that concept that the leader needs to be successful if his team is successful and that activity that the leader really needs his staff more than the staff needs the leader. Leaders come and go, okay? And if I'm not pulling my weight, typically if the company's not being successful, the leader's the first one to go, they're not gonna fire the whole team. They're gonna bring in a new leader. So that makes that leader really heavily dependent on his staff. And you can either disclose to your staff that my career is really gonna rise and fall as the team rises and falls. Or you try and hide that in a bluster of individual performance goals and pressure and those kinds of activities. And that doesn't really work very well for me. So I think that view that the leader really is serving the broader goals of the individuals career-wise, advice, the tempering balance between individual performance requirements and their own work-life balance. Those kinds of things have become very critical in building that culture of trust.

Mike Casey:
Hiring. It's cited in almost every one of these conversations as one of the most challenging parts of leading companies. What have you learned about hiring, particularly at the senior level?

Kevin Smith:
I think probably at the senior level it requires more patience than people give it. And that really is how you also help create diverse teams as well. People have this urgency that they've got an opening, they need to fill a role. They get in half a dozen resumes, they pick the best of the half a dozen, and then they move on. And certainly, in some circumstances, you don't have any choice. You need somebody in a role and you need to make a quick decision but you need to have that bit of patience in the hiring activity to make sure that you're bringing in people that fit the culture, that fit the team dynamics, that are comfortable in an environment of trust within the organization, have dealt with changing environments and fast-moving businesses.

So it's having a little bit of patience in the hiring process to make sure that the first person that crosses your threshold with the right resume isn't necessarily the person that may be a good fit for the company or for the team. And I think that is also a bit of a lesson on hiring diverse teams as well. And that's one of the things we talk about within our own company in order to bring in a diverse staff, you need to have that patience cause you're gonna get some qualified people that walk in across the door quickly, are they the right fit? Does it fit our company goals? Does it fit our diversity requirements? Is there a better fit? Is there somebody that would be a better team member than another? And so don't jump too quickly, make sure you're making those team decisions with kind of a patient critical approach to what you really want culturally within your organization, not just words on a resume and experience on a resume.

The Challenge of Firing

Mike Casey:
In that hypothetical classroom at the University of Chicago Business School what's the guidance you would offer your students on firing people?

Kevin Smith:
That's a tough one because I'm pretty bad at firing people. So that's probably one of my big weaknesses. I'm a second chance, third chance, fourth chance, and unfortunately when I've been in those instances once you have an employee that's clearly either bringing down the rest of the team or looked at they're not clearly carrying their weight. And they look on the leader being late in making a decision. Then you've kind of gone a little bit too far. And that's I would say 9 out of 10 times I end up in that zone when it's pretty crystal clear to the rest of the team, and I'm still trying to figure out a way to make it work.

So like I said with all these things, there's a bit of balance. And I'm always a little bit too late on that. And maybe that's okay. At least people recognize that I'm not way on the other end of the curve and that people don't have a chance to recover from a bad quarter or a bad year or a bad decision or whatever. So I think it's recognizing a balance. As I said, I'm a second-chance, third-chance, fourth-chance, kind of manager, and sometimes that's not necessarily the best way. It gets a little bit too late in the process.

Assessing and Transforming Leadership Teams

Mike Casey:
When you've inherited a leadership team or inherited a team reporting up to you, what have you learned about assessing who to keep and who to change? Because I've been told that when in the subset of hiring or personnel, that is arguably the most difficult thing to do. It's one thing to build a team from scratch. It's quite another to totally clean house on a failing team, but when you need to come in and say - winner, winner, okay, performer, underperformer, what things are you looking for in people's performance to make those assessments on a team that you've inherited?

Kevin Smith:
Yeah, there's no question that building a team from scratch, while it has its challenges and it's hard to attract great people and good cultural fits from building a team standpoint, it's clearly a lot easier to build a high-performing team from scratch than it is to take on a team either that had been mismanaged or didn't necessarily have the right hiring mix within that team. I'm not sure I've got the right answer on what's the best way to do it. I can tell you the way I've done it, which is essentially, kind of immerse myself in the team and get to know the various players. I don't make changes very quickly.

Others may say, you really need to. I've tried to let the dynamics of the team kind of play out. And then that might be four months, it might be six months, and it might be nine months where you let the dynamics of the team play out. And I think it becomes pretty clear then who's who, who functions well as part of that team, looking at my skill set and my cultural goals the way that I'm looking to manage the team, so I think it becomes pretty clear over time who fits and who doesn't. And then it ends up being a little bit of self-selection in that, people that recognize, ‘Hey, I'm not sure I'm fit in part of this team’. And either they approach me and look for another role within the organization, or they find another position. I'm not great at firing people. So it's not like I come in heavy-handed and, and say, you're in, you're out, you're in, you're out. It's a little bit more living it for a while. Now, you may end up having a little bit of a slower transition to the type of team that I'm looking to build. But that's kind of the way I do it. There may be a better way, but that's the way I do it.

The Importance of Decision Making for Success

Mike Casey:
When it comes to running a company, from your vantage point, is success more dependent on what you choose to do or what you choose not to do?

Kevin Smith:
It's both. I don't know if it's both equally. I tend to think of it more in terms of kind of decision-making. You're faced with a bunch of decisions on a daily, weekly, or monthly strategy basis. And some people in a lot of companies, and a lot of instances, people choose not to make those decisions, and they just let the markets, or let the issue kind of dictate the direction. My view is most of the time you're better off making the wrong decision than making no decision. At least if you make the wrong decision, you can recognize you've chosen a path, you can decide to change that path.

But in a lot of instances, if you just don't make a decision, you stall through a decision, you delay through an opportunity, then it's hard to recover from that. And so I'd to think of it as a little bit more in terms of decision making, which is - you need to make decisions when those decisions are in front of you as opposed to kicking them down the road and then making no decision and letting the markets kind of force you into a role or a position that you weren't planning on. That's my view.

Mike Casey:
Your own level of performance is certainly important in the success of your company day-to-day. Are there practices, habits, things you do that you do really to help boost your performance in your job? Like, some people get up at 5.30 in the morning, some people make sure that they have a well-being walk in the middle of the day. Are the things that Kevin Smith has picked up that you found really useful for maintaining the performance of you as a CEO?

Kevin Smith:
Well, I mean, I have the things that I do, that keep me in kind of a bit of a groove on day-to-day activities. I do get up early in the morning. I exercise pretty much every morning. And regardless of what time I’ve got a call, first thing in the morning I get up, I exercise and I shower and dress business casual for the day. Throughout Covid, we were spending a lot of time at home and I would say 99 out of 100 days I’m exercised, showered, and ready to go when my first call starts, whether it was at seven o'clock in the morning or 10 o'clock in the morning.

And it's a bit of a discipline that just works for me. Some people are great, they roll out of bed 10 minutes before their first call. It's on Zoom, they're off-camera, whatever. I'd like to start my day out and, as if I was kind of going into the office, whether I'm going into the office or not. So that's one part of the discipline for me. I kind of use exercise as a bit of a relax, I'll listen to things on podcasts or I'll listen to music or whatever. So that helps me in the morning to kind of direct me towards the rest of the day and get a bit of a release out.

So that's probably one of the things that I do. At the end of the day, even if I still have work to do, which most days I do, I still move out of my office. I leave the office at a normal time. My kids are all out and about. It's just my wife and me, I go home, I have dinner and then I'll work into the evening hours sitting on the couch with my wife watching a show or a sports event or something like that. So at the end of the day, I leave the office and if I'm in my home office, I go up to kind of the living area, and then I work, but work more in kind of the social setting with my wife and a little bit more kind of a break from that sitting at my desk in front of my computer. Now I'll have my computer on my lap, on the couch watching a movie or whatever at night. But so I've got certain things that I do, certainly, I work a lot of hours, but I try and break it up a little bit with other things to make sure that I'm kind of staying focused.

Mike Casey:
Kevin Smith, thank you. We like to close these by just asking, are you a climate optimist or a climate pessimist, and why?

Kevin Smith:
I would say I'm an optimist. I think we have a big problem. I think we've got a big problem with the climate. It's pretty clear. But I believe in technology and innovation and I think we've got the ability to solve problems. And I think we're gonna figure out a way out of the mess we've created through technology and through innovation.

Mike Casey:
Kevin Smith, I have wanted you on this show since we conceived of it originally. You were on the original list, it’s no lie, and I'm thrilled that we’re able to get you on. So I'm really looking forward to producing this thing and to sharing your wisdom with our listeners. Thank you so much for taking the time to talk to me. It's an honor and it's a pleasure doing work for you on a routine basis. Thanks.

Kevin Smith:
Thanks, Mike. Appreciate it.

Mike Casey:
This is Scaling Clean, a production of Tigercomm. And I'm Mike Casey. Thanks for joining us. You can subscribe to our show for free anywhere you get your podcast. And while you're there, please leave us a rating and a review. We'd love to hear from you. Thanks for listening.