Leadership Spotlight: 10 Questions for Stephen Butz
1. What has been your career journey that led to your role at Legence?
I started my career in corporate credit in the Commercial Banking industry. After three years analyzing large corporate clients’ business and financial risk, I moved to Investment Banking where I spent the next eight years as an equity research analyst covering various sectors of the global energy industry. These experiences in financial services provided me with a strong background in both the liability and equity side of the balance sheet as well as risk management, forecasting and valuation. Though after over a decade in financial services, I felt the time was right for me to move to the industry, where I have worked ever since. I spent my first year in the offshore drilling industry as a consultant, before joining a private company in the same industry. We grew quickly and took the company public within that first year. During the first five years, I was responsible for M&A, Treasury, Investor Relations, Corporate Communications and FP&A and I was then appointed CFO where I served another five years. Over the next five years, I served as CFO of two other publicly traded offshore drilling companies before joining Legence in 2021.
2. You have a wide range of work experience. What are some defining career moments for you thus far?
I am probably most proud of my time at a relatively young company and one with high financial leverage, successfully navigating through not only the Great Financial Crisis, but also the “permitorium” that followed the Macondo well control event, an event that we had no part in, but nearly brought activity to a standstill in our largest market. Through multiple creative capital market transactions and other measures, we were able to meaningfully extend the company’s runway for our shareholders and employees. Once we were on the road to recovery, we even formed another company that we managed, and took it public in Norway, providing additional avenues to reinvest in our asset base.
At my next career stop, together with a small executive team, I played a meaningful role in securing a highly coveted multibillion-dollar joint venture with Saudi Aramco.
At Legence, I’m looking forward to continuing my part providing more opportunities for our company to move the needle in the decarbonization of the built environment.
3. How does the culture at Legence compare to other work cultures you’ve experienced?
Given a large number of Legence companies have been run by entrepreneurs it probably won’t surprise you when I say we are more entrepreneurial than some of the other cultures I’ve been part of. In my view, we also go above and beyond to seek as much consensus as possible before making decisions, which I’m not sure if it is unique or not, but in my experience, it is not that common in larger companies.
At Legence, our people embody three core values: Challengers, pushing boundaries; Collaborators, driving our mission forward through teamwork; and dedicated, committed to making a positive impact. This sums up our culture in a nutshell and underscores the collective power of the people who make up Legence.
4. What are some of the characteristics you look for when looking at potential candidates for hiring?
While aptitude and experience are typical prerequisites I also think attitude and commitment are critical as well. Attitudes are contagious, so wouldn’t we all prefer to spend more time with others who have a positive attitude and outlook? I also include commitment, because I find that people wh demonstrated that commitment to achieving a common goal with others in the past, whether in the military, athletics, or at a past employer, there is a high probability that they will persevere when facing adversity on the challenges that we are working to solve.
5. From a finance perspective, what are some of the biggest opportunities you see for Legence in the next six months?
Bringing as many companies into the fold as we have the last several years, while trying to build a unified finance function has, as expected, presented many challenges, but I’m also proud of the successes we’ve had, such as the numerous capital raises to fund our active acquisition strategy, unifying and documenting finance policies across the entity, implementing a number of tools to streamline or enhance reporting and largely unifying our banking platform.
That said, in the vein of continuous improvement, there is certainly more we can do to improve and create more timely, accurate and insightful reporting, and we have a number of initiatives in flight currently to that end. These initiatives, 1) close process improvement (including chart of accounts alignment), 2) project database, 3) revenue recognition, and 4) internal controls really offer the function and allow the company to take a big leap forward in our maturity and evolution.
6. Having managed IPOs and public equity offerings in the past, what are some of the most important lessons you’ve learned from taking companies public?
Aside from the obvious business performance itself, which of course everyone should always be working to optimize, the single most factor in my mind is for the management team to generate trust and credibility with the investment community. In a private company setting, new investors often perform countless hours of due diligence over months spent with management teams where they get to know them well. In a public company setting, even large institutional investors are typically making similar size investment decisions often only after a 50-minute meeting with the management team. It is therefore critical to be transparent in communications with Wall Street, to manage expectations, then perform to them and build that trust.
7. What has Texas’ energy-driven economy, particularly in light of recent grid challenges, taught you about the transition to renewable energy for grid resilience and economic growth?
Clearly Texas is well known for its pivotal role in the oil gas industry, but people are often surprised to learn that it is the largest producer of renewable energy in the nation with significant leadership in wind energy. Despite these abundant resources and relatively plentiful supply of energy, as with many other places, it is a struggle to keep up with rising demand given population growth in the state and the impact of more severe weather events, whether it be extreme heat waves driving cooling demand or severe freezes driving heating demand. While increasing supply of energy is important, we can also have a meaningful impact on reducing demand through increased energy efficiency, certainly where we focus in the built environment, but also in other areas of the economy as well such as transportation.
8. You’ve just spent a few days at an event at which all of our leaders were together for professional development. What were some of the event highlights for you?
First and foremost, the event reinforced my view that email has its benefits and is certainly better than no communication, but a phone call is even better, a video conference is superior to a phone call and in person face to face interaction is the best. Not only are the personal connections more meaningful, I’m sure you have all seen studies that show what is lost when you just use the written word and that both tone of voice and facial expressions often convey a significant and important part of any message.
I enjoyed the entire event and would highlight the sessions on the predictive index, the cohort discussion groups and leadership panels as highlights for me. I’d also like to extend a huge thank you to everyone involved in planning the event which I appreciate, was no small task.
9. Having to juggle so much in your day-to-day professionally, how do you unwind after a busy week?
With my wife of 22 years in our limited free time, we prioritize time with our four children and extended family. Our children range in age from 15 to 20 and have all been active in sports, so whether it was coaching their basketball or soccer teams at the YMCA when they were younger or setting up shop outside a natatorium for all weekend swim meets, their activities certainly kept us busy on weekends. I also enjoy exercise, non-fiction books and of course rest and recreation in the south during the fall would not be complete without college football.
10. We heard that you enjoy (or at least have participated in) extreme outdoor challenges. What has been your most remarkable expedition?
I’ve been blessed with both the opportunities to travel and the health to undertake some unique challenges, including a solo 50-mile hike in the Arctic, but probably the one I’ve enjoyed the most was completing the John Muir trail in the Sierra Nevada’s in California. While I completed the 260-mile backpacking journey over two 11-day segments in consecutive summers, each half of the expedition and the 100,000 feet of elevation change brought its own hardships, aches, and pains, but also rewards and memories. The trail is on some of the most pristine and remote wilderness in the US and only crosses one road over that entire distance. I found that this extended time with some solitude in the outdoors not only helps one to respect and appreciate nature more, but it also helps one to appreciate community and all our creature comforts as well. Not much can make you appreciate a roof over your head more than standing on the side of a mountain in a thunderstorm.
