Richard Kauffman '83, CEO of Good Energies, Delivers Leaders Forum Lecture
Many people look at the current state of energy production and climate change in the U.S. and see an unbeatable crisis. Richard Kauffman ’83 sees an opportunity. Last year, he left his position as a partner at Goldman Sachs to take the helm of Good Energies, an investment firm that focuses on the renewable energy sector. While Kauffman said he constantly hears the argument that there is neither the technology nor the capital to change how America produces energy, he sees things a little differently. “There’s plenty of technology now to make a difference,” he said. “There are a lot of good things happening at the state level.”
Kauffman spoke to SOM students and faculty on Nov. 27 as part of the SOM Leaders Forum. He discussed the state of the growing renewable energy sector, while providing some practical career advice to students gleaned from his own successful career. Since graduating from SOM, Kauffman has risen to senior positions both at Salomon Brothers and Goldman Sachs, where he was chairman of the Global Financing Group. As the CEO of Good Energies — whose motto is “people, planet, profit” — he’s now leading a company with $7 billion invested in renewable energy companies. Good Energies focuses on companies working with solar and wind power, and building efficiency. He said inefficient buildings alone account for 40% of greenhouse gasses released into the atmosphere.
Kauffman is optimistic about the ability of companies to effectively reduce greenhouse gases. Unfortunately, much of this optimism is targeted abroad. Good Energies’ biggest investment is in Q-Cells AG. Kauffman noted that Q-Cells, the world’s largest individual producer of solar cells, is based in Germany, which he said gets about as much sunlight as Alaska. His point was that while many in America have been discovering reasons why renewable energy can’t work, Europeans have been working with what’s available.
A major hurdle in the United States is the patchwork of local regulations that make it difficult to design alternatives across the various regions and markets. “It makes it very difficult for people who want to do things, particularly utilities, and get scale in any market,” he said, adding that tax credits, which can be helpful, don’t help like they should since there is risk they could expire and not be renewed. “The entire solar industry in the United States is about the size of Spain’s.”
While Kauffman may be disappointed that renewable energies aren’t being pursued more vigorously in the U.S., as a businessman, he also sees an opening. “It’s not just important, it’s a tremendous economic opportunity,” he said. “We’re trying to help develop products we think are going to move the needle. We want to develop the leading companies.”
Kauffman spent about half his talk advising students how to be successful in their careers. “In order to be a leader, you have to be successful,” he said. “You have to put yourself in an environment where you can be successful. What are the tasks you’re good at? What environment will you do well in? Put yourself in that environment.”
He said the employees of the investment banks where he worked were universally smart and hard-working. But they were task-oriented to the point they were afraid to take risks, such as questioning the boss when an order doesn’t make practical sense. “I have met the enemy, and it’s us,” he said. “Because people at investment banks are task-oriented, they just put their head down and work so they can get an ‘A’. If you want to be successful, you need to take risks.”
His ultimate advice to students was to pick limits to what they’re willing to do to advance their careers. Any limit, he said, must have two components. “It can’t really imperil your career — you can’t say you’re not going to work weekends. And it has to make you anxious,” he said. “And every year, extend the boundaries a bit. The goal is to be successful at maintaining the work-life balance. That’s my charge to you.”