'What will you do for an encore? I'd like to electrify Africa' - Leadership lessons from a global leader in renewable energy
Eddie O’Connor, a world leader in the renewable energy sector, shares with Paul Holland of Signium Ireland some of the leadership lessons he has learned throughout his remarkable career. And his remaining ambition – to electrify Africa.
Eddie O’Connor has been at the coalface of industry for four decades. Hmm. Perhaps ‘coalface’ isn’t quite the word. Because O’Connor has been leading the charge to replace fossil fuels with clean energy from the sun and wind. In so doing, he has built and sold a €1.8 billion company from scratch, before building an even bigger one from scratch and nearly losing it. He is a man who, when he speaks on business and leadership, does so with some considerable authority.
O’Connor started his career in Ireland’s Electricity Supply Board, before turning Bord na Mona from a €20m lossmaking semi-state peat processor into a €5m profitmaking company under his stewardship. When he left the semi-state sector (‘the customer was often seen as the enemy’) and founded Airtricity, to become Ireland’s first global renewable energy company, his career went into overdrive.
In 2008, a mere eleven years after founding it, Airtricity was sold to E.On and Scottish and Southern Energy (SSE) for €1.8 billion.
Later that year, O’Connor founded Mainstream Renewable Power and has built a truly global business across Europe, the Americas, Africa and Asia with a portfolio of projects generating 9,000MW per annum to become the number one in its space.
From ‘Lightbulb’ Moment to ‘iPhone’ Moment
Like all good entrepreneur stories, Eddie’s contains a ‘lightbulb’ moment, when he realised the scale of both the problem and the opportunity.
The lightbulb moment came during a difficult time as Managing Director of Bord na Mona (a peat processing company that supplied electricity to the Irish national grid), when a board member said to him ‘You know, Eddie, this CO2 thing is very bad, it’s causing global warming’. His response was ‘That can’t be, sure the whole electricity business is based on sending up billions of tonnes of CO2’. His colleague suggested that he should read up on it. And he did.
To O’Connor, a Chemical Engineer by training, what happened next wasn’t a gamble – it was just logic.
“That’s when I came across the Tyndall Effect, a discovery by a fellow Irishman in 1861, that when you pass radiation through a series of gases, it passes through most gases, but not carbon dioxide -that gets absorbed. We had increased the CO2 content in the atmosphere by 50% over pre-industrial times. So, to me, it was science. It was a fact.”
“The atmosphere is absorbing the equivalent of 4 Hiroshima atomic bombs every second”
“It’s very hard to appreciate, just how much energy we are putting up there, until you see 50 inches of rain falling simultaneously in Baha, California and Houston, Texas and then Irma comes along and you begin to understand why this is happening. We are absorbing the energy equivalent of 4 Hiroshima atomic bombs in the atmosphere every second. It’s this massive amount of energy that’s lifting up this quantity of water and depositing it. And that’s costing America, what, €100 billion? And someone has to pay for that. Which is why we have the Paris Accord.
“The renewable energy industry itself is accelerating at a great rate. There was 161,000 MW of renewable energy installed in the US last year. We’re now about half the price of coal, two thirds the price of gas, one tenth the price of nuclear; so I don’t see any reason why anyone would install coal, oil or gas in the future. Solar has collapsed in price by about 85% since 2009, so that gives this industry massive momentum.
“What we aimed to do when we set up Mainstream was to recognise that every country has to make this kind of transition - so we wanted to build the competencies, get the staff together, get the finance organised and pick a certain number of countries where we were going to work.
“It’s just taken off. Remember Nokia? I think it had a 60% worldwide share and then Steve Jobs came along with the iPhone. Nokia got bought a couple of years ago by Microsoft for a pittance.
“So, we’re there now at our iPhone moment - and I’m very happy to say that Mainstream is number one now.”
In this 4 minute video, Eddie O’Connor talks about his lightbulb moment and the industry’s iPhone moment
The Hardest Ten Years
“But, this isn’t triumphalism. This has been the hardest ten years I’ve ever done, trying to get Mainstream going, because we came through a period that was just north of the Great Depression. There were times in Mainstream when we were delayed getting payments from South Africa and I had to dip into my personal account or I would have lost the company. We came that close about three years ago to losing the company. That said, I was quite happy to do it because I had the money to do it and if we had to go to the venture people at that stage we’d have lost the company.
“But when it looks like you’re not going to be able to achieve your life’s work, it can be pretty devastating and that’s what can keep you up at night.”
‘Managing Culture is the Greatest and Most Interesting Challenge’
O’Connor’s accumulated global experience has given him a unique perspective on leadership. Ultimately, he says, it’s all about people, and that managing culture is the greatest and most interesting challenge of all.
“Our business is about people. It’s just about people. If you have the best people you will win every time. The first function we set up in both Airtricity and Mainstream was our HR function. You have to select the right people and then agree targets with them and keep them motivated.
“But working with different cultures is the really interesting bit as far as I’m concerned. Human beings are all the same, but they are vastly different in culture. The assumptions that an American makes, versus the assumptions that a Chilean makes, versus the assumptions a South African or an Irishman makes are completely different. And it’s been going on for hundreds of years, so it’s very hard to talk to people like this – to build plant on their land.”
The importance of luck
O’Connor concedes readily that he has enjoyed a lot of luck along the way.
“Setting Airtricity up in the beginning. When I left Bord na Mona, John Lavery, a pal of mine, asked me what I was going to do now. I said I was thinking about doing the wind. ‘How much do you need?’ he asked me. I didn’t expect the question. ‘I suppose half a million would do it’, I said. He rang me five days later and said, ‘I have that now, Eddie’.
“We also got lucky with deregulation. Europe had a directive that opened up the electricity system. The plan was to let the top 240 customers – huge outfits like Intel and so on – to let them have chunks. We managed to work with the Dail (Irish Parliament) and we got five clauses inserted into the Electricity Regulation Act and that allowed us to set up a supply business.
“And I got lucky with getting Tom Roche on board as an investor. He was making a lot of cash through National Toll Roads at the time and his investors said to him ‘You should be doing something with that cash instead of giving it back to us as dividends, which we have to pay huge tax on.’ So, he invested €3.3m with us in equity and €6m in debt instrument and we took it from there. That was a game changer.”
Values in Business
“To me, ethics in business makes an awful lot of sense. We place a lot of emphasis in our business on establishing a set of values. When you set up a company you want it to last beyond the current set of leaders. So, you try to get people to buy into a set of values. Cultures are so different, but you have to respect these cultures. We’re entrepreneurial and innovative and that’s a value in the company.
“We talk to our people at least eight times a year by video conference and we select a ‘Person of the Moment’ who exhibits these values. Often, it’s safety as that’s a key value to us. Recently we passed 1.5 million man-hours with no lost time incidents on one farm in Africa, despite recruiting thousands of people who hadn’t worked before. That doesn’t happen by accident. Forty years ago, there would have been 20 people dead there.
“They say it takes 7 years to establish culture, but if you achieve that then you shouldn’t be arguing about things. In business, one of the key destroyers of things is people debating endlessly and not having a set of basic things they agree on. So, we talk about our values an awful lot.”
“Share options motivate nobody. They’re too long-term. You will not stop people speeding if you send them a speeding ticket two years later. You hit them now, they pay the money now and they stop speeding. So there has to be a much more direct cause and effect in terms of motivation.
“I let people draft their own targets and I review them with them. Rather than you setting out ‘Here’s what you’ll do’ - it’s always better that way. We pay according to the achievement of those targets, But I believe in the motivation hygiene theory. Money, above a certain level, doesn’t motivate people any more. Money motivates hugely if you have to buy your house, feed and educate your family. But above a certain level it’s job satisfaction that really matters. It’s whether the boss actually appreciates me. A boss has that effect on people. If you ever want to get rid of someone out of a company, just remove the love. It’s that simple. They’ll leave. If you want to hold onto them, appreciate them deeply every day and find new ways to do that. And it’s much better if you mean it!
“You’re the leader and you’ve got to lead. And that can mean absorbing a huge amount of your own difficulties. You can’t share them with people who report to you.”
“I’d like to Electrify Africa”- Ambition and The Future
O’Connor has recently stepped down as Managing Director of Mainstream, to become Executive Chairman. He will continue to be highly involved on the fundraising and partnership side of the business, but his real ambition is one that might daunt a man half his age.
“I’d like to electrify Africa” he says, as though it was the equivalent of executing a round of fundraising. “This is the greatest intellectual, cultural, commercial, massively big challenge in the world. I want to set up an institute now which will electrify Africa.
“I’ve found a correlation between the degree of electrification and the wealth of a country. I’ve plotted it on a graph and it’s knock for knock. The more electrification you have the wealthier the country. Interestingly, this is what Franklin Delano Roosevelt did when he ran for election in 1932. The Rural Electrification Act brought electricity to every small town and hamlet in America and the country grew from 1940 to 1970 at 8.6% per year – and that created America.”
On Resilience and Purpose in Business
“I think there’s a lot of genetic stuff involved in becoming resilient in business. It’s good to be in a good marriage and to have children. But, if your sense of purpose is strong and if you are ‘on purpose’ then resilience comes to you.
“If you want to do something, if you really believe something, it doesn’t matter what knocks you get.. I know that the world is strangling itself with the energy in the atmosphere that comes from too much carbon dioxide, and I know we have the solution to that, so there’s nothing going to stop me from trying to do that.
“I’m a great believer in doing things. Doing things helps all the time because you say to yourself ‘Well, I did that and nothing can take that away’, so next time you face into something and its keeping you awake at night and things look tough, you can say I faced a situation a bit like this before and I got through it.”
On Change Management and Authenticity
In 1988, O’Connor had to let 2,400 people go from Bord na Mona.
“I had to let them go. And I learned a lesson in that. The way I do change management is to listen very carefully to the people in the company. The people who know most in any company are the workers in that company. I had 24 meetings with the workers in groups, where I just sat down and listened and took notes. This happened to be the first time they had seen the Managing Director. Previous MDs lived in Dublin and all the work was done down the country. And then I talked to the Unions and said ‘Listen, lads, you can have your policies or you can have your company, but you’ve got to choose.’ And they chose to go with an Employee Enterprise Scheme. In fact, the Unions embraced it.
“There’s a huge amount of authenticity involved in leadership - about being with the people and not being afraid to listen to their hurt and their diagnosis of what’s wrong. And there was a lot wrong. But they told me all about it. That was a big learning. What you try to do is find the natural leaders and try to influence them. There will always be natural leaders, but they may not be the shop steward. The shop steward is often the guy put up front by the natural leaders and is the mouthpiece, whereas the thinking is done in behind.”
On personal energy
Remarkably, since the age of 27, O’Connor sleeps every day at lunchtime. “To lead in business, you have to listen to people very carefully. And that takes a lot of energy. You can’t do that if you are tired. I used to dread the 2-3pm lecture in University – I’d be falling asleep as I wrote! So, I sleep for half an hour to an hour every lunchtime and that works for me.”
Advice you’d pass on to a 30-year old looking to set up a global business?
“First of all, recognise that it’s alright to be afraid. Everyone is afraid. Feel the fear and do it anyway.
“Follow your dream. ‘Enthousiasmos’ is the Greek word for ‘inspired by God’ and enthusiasm gets you places, because people follow those who are enthusiastic. And you are far more likely to be enthusiastic if you are doing something that you like. That could be drawing pretty girls or writing poetry - but do it anyway, because that’s the gift that you were given. So, follow your gift, no matter where it takes you. That’s all I would say, really, because first of all, nobody is ever going to listen to advice. People always do what’s right for themselves.
“Treat others like you want to be treated. There’s a lot in the Confucian thing. I’ve studied a lot about how China does things. I’m fascinated by that no-God and ‘we live in the now’ culture. So, realise that this is not a practice run. You get one shot at it and you’d hate to look back when you’re 70 and say, if only I’d done that.
“So follow your dream, and do it with enthusiasm and people will come with you, whatever it is. You may not make huge amounts of money, but what’s money if you’re not fulfilled?
Paul Holland ‘The Signium Interviewer’ thanked Eddie O’Connor for his time and valued insights and reflected the mood in the room of senior business leaders when he said ‘If anyone can electrify Africa, Eddie, I think it’s you!’
Eddie O’Connor was in conversation at an event hosted by Paul Holland & Martin McEvoy of Signium Ireland at ‘The Signium Interview’. If you would like to speak with Signium about your Executive Search or Leadership Consulting requirements, you can contact them at: +353 1 496 6500 / firstname.lastname@example.org