Surviving the Smart Grid Hiring Crunch

Over the past several years, companies in the smart grid, grid-edge, and cleantech sectors in general have focused diligently on developing and successfully piloting their technology solutions, to great acclaim. Now, in 2015, many of these emerging growth companies are scaling their operations to commercialize their products in a big way. They are all aiming for the same large customers, including utilities and Fortune 500 enterprises.

The trouble is, in order to scale quickly, they need top notch commercial teams, including sales, marketing and product support teams. To succeed, these companies cannot simply hire candidates who have been successful in mature markets or with well-established brands to help them build revenue. The candidates they seek are those with experience selling and marketing disruptive technologies and services in markets where business models have not been clearly defined, such as the distributed energy markets.

In our work, we are constantly fielding calls from clients who are all looking for precisely the same profile – an A candidate who is mid-career and has been successful in both large and small organizations, with verifiable “wins” as part of their track-record.

Unfortunately, over the past two years most people who fit this profile have been secured by emerging competitors. They are tied up with equity, or are wearing “golden handcuffs” put on by large organizations willing to “outbid” the smaller players in order to lock down mind share in their market segment.

What this all comes down to is that the industry is currently experiencing a smart grid hiring crunch which is forcing demand well past supply. This is increasing the costs of securing current industry ‘A Players’, often times, making them “out of reach” for what emerging companies can afford to entice a candidate to take a risk on a growing company.

The Dream Smart Grid Candidate

Due to finances and market risk, many of these companies don’t have long runways, so they are looking to gain traction and capture market share swiftly. As such, when looking to hire top sales, marketing and product professionals, companies in the grid edge market typically seek talent with at least 15 years’ experience selling to the same individuals their company may be targeting. Additionally, they want closers of complex deals over $1 million, who have worked successfully in both early stage and mature companies. It’s a big bonus if candidates have worked for, or sold to, a utility at some point in their career. Beyond this complex solution sales pedigree, companies want to know a candidate is able to bring a current rolodex of quality leads along with them.

There are three problems with this profile:

  • Every smart grid and grid edge emerging growth company in the industry has the same set of requirements
  • At most there are approximately 80 ‘A Players’ across the U.S. who would meet all of these criteria
  • Because of the long sales cycles of these utilities and large enterprise companies, many people currently selling in these markets are firmly (often happily) entrenched in their current positions

As a result, a new position has to be something pretty spectacular in terms of salary, bonuses and other non-tangible attributes to entice energy ‘A Players’ away.

Sidestepping to Grid Edge Success

When selling to utility and enterprise markets, experience pays big dividends. So, it’s understandable that the majority of smart grid and grid edge companies would be looking for people who know how to make important deals happen. However, because these people know they are in very high demand the costs to acquire them away from current positions becomes prohibitively expensive for many emerging growth companies.

The good news is, any emerging growth company in the smart grid space can still secure premium talent, it just doesn’t have to be the ‘A Players’ within the Industry. There are hundreds, if not thousands of superstar revenue generators out there in the U.S. and globally, who have experience selling complex, multi-million dollar deals to enterprise companies and utilities. But instead of being in the energy space, they are found in adjacent, more mature industries.

Opower was one of the first to recognize that hiring ‘A Players’ from within the industry was not sustainable or scalable. Yet, from its early days, the company still set a course to hire the best available talent from the best schools and most successful existing industries.

Early on Opower pinpointed a set of characteristics that led to an employee successfully cultivating and closing its first-of-a-kind deals in this new market of consumer engagement. Many of the people Opower hired were unlikely salespeople, sometimes without traditional software or industry experience at all. But they were well-educated and forward-thinking, with a passion for transforming how homeowners think about their energy use. Additionally, these out-of-industry recruits didn’t come with preconceived notions about what was possible in terms of how the utility industry buys. In the end, the strategy led to one of the most successful exits in the smart grid industry to date.

Today, other companies are following Opower’s lead. Enertech Search Partners has engaged with the industry’s leading energy intelligence software firm to recalibrate their commercial teams across the country. With its recent pivot to focus on selling high-value complex technology solutions to its current customer base, the historical ROI sales candidate profile, is no longer applicable. With key enterprise software executives at the helm, this firm has shifted to hire a team of rockstar enterprise software sales professionals from outside the industry.

We are having success with their new hiring focus, as top energy intelligence software sales executives are scarce in general. Moreover, most top talent within the cleantech industry see themselves as “market makers.” The idea of joining a well-established company like the industry’s leading energy intelligence software firm may not hold the same appeal as an emerging growth company that’s on the bleeding edge of an industry. However, ‘A Players’ from adjacent industries do find mature companies like this firm appealing as a way to get their foot in the door in a new, exciting, and still emerging industry.

Markets like risk management, supply chain management or overall corporate governance, are teaming with mid-career ‘A Players’, who have closed complex deals over $1 million and been in the industry for 15 years or more. Instead of selling disruptive technologies that were entirely energy focused, these candidates have sold complex products which transform the business process and where energy spend or efficiency has some influence on the overall decision.

This fact is actually more of a benefit than most cleantech companies realize. Most adjacent industry ‘A Players’ have managed and sold to large strategic accounts. They still hold that rolodex of connections and are often able to open doors wide open for energy solutions companies that would take months or years to simply crack open.

The strong correlation between selling grid edge, smart grid and other clean technologies to large customers and utilities and selling other products and services is certainly not lost on top candidates. They find themselves excited about parlaying their skills from other sectors into one that’s at the center of a global transformation in how we generate, distribute, and manage our energy resources. The grid edge is an appealing sandlot and these big kids want to play the bigger game.

Of course, grid edge companies are always welcome to compete for existing top talent within the clean energy space. Yet, for emerging growth companies, capital efficiency in a time of scaling to commercialization must always be a consideration. Securing top clean energy talent against competitive offers could leave a company with a hefty price tag for a candidate, or leave them out in the cold without any candidate at all. Sourcing from adjacent industries reduces the risk of competitive offers, and increases their chances of securing the candidate that is an excellent fit for the company and its culture.

Capitalizing on this adjacent market strategy is a two way street. It’s up to today’s cleantech companies to recognize this untapped hiring opportunity, and open up their hiring criteria to incorporate top candidates working outside the clean energy sector. In doing so, they possess the opportunity to elevate this grid edge, clean energy hiring crunch that the industry currently faces.