Owning The Ethanol Exec Role

  • Tuesday, 30 May 2017 15:10

Ethanol Producer Magazine

By Luke Geiver

May 26, 2017

It’s hard to believe that Jeanne McCaherty holds only one title for Guardian Energy Management LLC. The former Cargill executive-turned ethanol company CEO has a master’s degree in biochemistry, has run a fermentation optimization research group, developed and operated a wet-milling research team, started a culture-growing company, overseen a global biotechnology effort and spent time as a private equity consultant. Nearly one year after becoming CEO of Guardian Energy, a unique ethanol joint-venture organization that includes 10 ethanol producers spread throughout Minnesota, North Dakota, Iowa and Nebraska, McCaherty spoke with us about her efforts to inject previous experiences into day-to-day operations, observations on the opportunities for plant and organizational upgrades and why the ethanol industry is unlike any she’s been in before.
Letting the Past Inform the Present
After receiving her master’s degree in biochemistry, McCaherty took a position with Cargill. Her time spent working in labs, leading research and development efforts and running big-name-backed businesses has already proven useful. “All of that tech background I have has been very useful. It is amazing how much I’m putting that to use in our business today,” she says.

One of her early roles at Cargill involved working on continuous improvements for large scale fermentation, including ethanol. She called Eddyville, Iowa, home and her place of work while she was working on fermentation improvements. She has also spent time researching corn wet milling issues related to making corn starch-based products. Upon her return to Minneapolis, McCaherty led a biotechnology research group that focused on multiple areas. A fermentation optimization group studied processes to improve organisms. Another group developed and utilized gene manipulation techniques for organisms involved in fermentation processes. “When I look at what the yeast suppliers are doing today and what the enzyme suppliers are doing today, it is all very relevant to the work I did back then,” she says.

McCaherty has already brought her experiences and insight from the past into the ethanol business. With vendors, she can talk in great detail about the viability and usefulness of product claims. She is also well-versed on the technical side of fermentation, she says.

“I come from a place where everything has a science or engineering answer to it,” she says. “The idea of continuous improvement and bringing scientific rigor is something I pride myself on.”

That approach to the ethanol business has brought some changes to the Janesville, Minnesota, plant owned and operated by Guardian. The team is setting up lab fermenters to test new enzymes and nutrients. “There comes a time when you need to own your own destiny and look at things in detail that maybe aren’t very relative to your vendors,” she says. McCaherty hopes to test how enzymes react to different temperatures, nutrients or additives used at the Guardian facility. Previously, the team depended on vendors to supply the information, or in some cases, was unable to look at products with much detail.

“The industry has been very effective at making improvements to the process and now you are getting to the point where you are at diminishing returns,” she says. “You no longer see a 4 percent increase in yields. You have to go after every 0.2 or 0.5 percent improvement to make more optimization happen.” Such improvements may not be as obvious, she adds, and could take longer to achieve than previous yield gains took.

Leveraging Ethanol’s Uniqueness
Before joining Guardian, McCaherty spent a year performing private equity consulting. She decided she wanted to get back into running a business, having a team of dedicated people and making real products. “I wanted to be somewhere where my background would be relevant,” she says, “where our products were good and good for the environment.” McCaherty—raised on a small farm—also likes the connection her team and ethanol facilities hold to the rural community.

On the business front, she was attracted to the unique opportunities present in the greater ethanol industry and at Guardian. The joint-venture entity offers multiple sites and scale, so when improvements are found or made, she says, “we can really move the dial.” With a board made up of experienced CEOs and GMs from six independent ethanol companies, McCaherty is pleased with her options to find answers.

“If I have never seen something or need information, I certainly have someone on the board that has seen it before,” she says. “Being able to leverage that experience and knowledge has been useful.”
Since taking over nearly a year ago, she has also learned about—and has leveraged—the culture of the ethanol industry. McCaherty calls the industry “unusual” compared to her previous experiences. Although it is a massive industry in terms of production and economic impact, it is a very small industry, she explains. Many of the consultants or supplier organizations know each other. In many cases, McCaherty doesn’t have to explain the intricacies of her business when speaking to vendors for the first time. “Being able to leverage that part of the industry has been valuable,” she says.

Despite McCaherty’s drive and enthusiasm to improve on a well-established ethanol operation, she still recognizes that certain efforts may not be as relevant as others. Working with existing vendors, partners and established entities is important to McCaherty. “We want to make sure we have and keep networks set up so we aren’t reinventing the wheel,” she says.

For her, the network of people linked to Guardian is most important. “As a leader I think the most important thing is to have a strong team. At Guardian, I’ve been lucky. The people have great industry knowledge and a passion for the industry,” she says. The part of the industry she is still working to navigate and understand is on the policy side.

“I’ve never been in a business where policy has influenced it so much,” she says. Although she finds it challenging in some ways, she is more focused and concerned with implementing the three tenets Guardian is working towards under McCaherty’s leadership.

Triple Tenets
The first tenet is collaboration. With RPMG—Renewable Products Marketing Group, Guardian Energy’s marketing arm—McCaherty believes the larger group of ethanol operators can find answers and avenues to nearly everything ethanol related. Achieving greater scale—the second tenet of Guardian—is possible through the make-up of the group, she also says. The new research work being done at the Janesville facility is an example of how McCaherty hopes to turn a good idea into a major success by implementing change on a large scale. The third tenant for McCaherty isn’t as easy to explain or achieve. “We also work towards excellence,” she says.

According to McCaherty, excellence is a concept that is kind of a black box and difficult to truly understand or measure. But, although she freely admits she hasn’t attained it yet during her short time in the ethanol industry, McCaherty says with a calm confidence that her past successes and technical know-how, combined with her new links to other experts in the industry, have her in a good position to lead. She’s always been in the business of finding the best, or at least better, answer to a challenge or to a position in the market. That is where her personal approach to business—especially under her new role in ethanol—comes in, she says. Based on that, Guardian Energy appears to have found a fitting leader for its future. “You want leaders who will lead an organization as if it is their own,” she says.

Read the original story: Owning The Ethanol Exec Role