Henry J. Charrabé Transcript
Clint Betts
Henry, thank you so much for coming on the show. Tell us about Seven Seas Water Group and how you became the CEO.
Henry Charrabé
Yeah. Hi, Clint; thanks for having me. Seven Seas Water Group is the number one provider for water as a service in the Caribbean and North America. So, we build, own, operate our water and wastewater treatment plants. We have about 20 in the Caribbean, Panama, and Peru, where we own and operate those assets. And then about 170 wastewater treatment plans, mostly in Texas and everywhere in the United States. And so I joined Seven Seas in September 2021 as Seven Seas was acquired in March of 2020 by Morgan Stanley Infrastructure Partners, which is the infrastructure investment group out of Morgan Stanley, a bank in New York. And had been in the water space for about 10 to 15 years prior to that, so I've been with Seven Seas now for two and a half years.
Clint Betts
So tell us what Seven Seas does, and I love that it's water as a service.
Henry Charrabé
Yes.
Clint Betts
It's incredible. Yeah. Tell us what it does.
Henry Charrabé
So, on the desalination, the freshwater side, we take water out of the ocean or brackish water, or underground water and treat it to portable water use, drinking water, and anything below that. So agriculture or reuse. And on the wastewater side, we basically treat wastewater, municipal waste mostly, so human feces if you want, and treat that to a level that it can either be easily and safely discharged or even reused for non-portable use. So irrigation, toilet flushing, or air conditioning that's also possible with wastewater reuse. So that's what we do, and as I said, we put our money where our mouth is, so we invest into those plants, we own and operate them, and then we sell water to the customer on a guaranteed price with a guaranteed quality and a guaranteed volume for however long the contract lasts.
Clint Betts
What got you into this? I can tell you're passionate about it. What led you to getting into the water business?
Henry Charrabé
I'm passionate about it just because before this, I also was allowed to run a publicly traded company and a private company, and whenever I met with investors, very often you have these awkward private equity investor meetings, and they ask you, "What's the value of your product? Why does anybody need you?" We never had to explain that question, right? Nobody ever asked, "Why does anybody need your product? Why does anybody need fresh water?"
So that's why I think I'm passionate about it, and everybody that I get to work with me thinks as well; the reason I got into this is actually non-related. I worked for Ronald Lauder, who is a wealthy investor and philanthropist out of New York, one of the heirs of the Estee Lauder conglomerate, and I started working for him in 2001. And in 2003 he initially then said, "I'm really interested in this water business." For him, it was the art of the 21st century, the key to peace in the Middle East, really doing well while doing good. And that's how I got into it, was his vision and his idea. And I was able to work with some very, very talented executives. And we started in the water business back then, and I stuck with the business.
Clint Betts
For many people, water is a given, particularly in the United States, but can you tell us around the world how precious of a... It's a precious resource for every human being. We need water, right? I'm drinking water right now, but can you tell us how it's not as widely available everywhere as it is in the United States and the more developed countries? Can you talk about water accessibility a bit?
Henry Charrabé
For sure. So, even in the US, everybody talks about the climate crisis. I would actually say we talk about a water crisis. Water is abundant where you don't need it and not enough where you do need it. So, it always seems to be at the wrong place at the wrong time. We talk about floods and droughts, so we have that in the United States, we have more and more stringent regulations. I think they can be more stringent at some points. Everybody's aware of Flint, Michigan, and, Jackson, Mississippi and other places and more and more industrial clients having to reuse water and maybe even become what we call now water positive, where you actually use less water than you ultimately treat. But you're absolutely right.
People in non-developed or less developed areas are very aware of the scarcity of water and what it does to the lack of social mobility of economic wellbeing. And even in New York City, people don't know what they paid for their water because it's included in their rent or in their maintenance fee. So, if a good is not priced, it's ultimately wasted. And I think that's a huge mistake. Even if nobody wants to raise the price of water, people should be aware how much it costs and how much they use. So, depending on where you even live in the United States, you are more or less aware of its price and of its value to what you do on a daily basis.
Clint Betts
You said something really interesting there where you said it's abundant where we don't need it and scarce where we do need it. How do you fix that problem?
Henry Charrabé
Well, 97% of the world's water is unusable. It's either it's salty or wastewater. So 1% is in the Arctic, 1% is in the Antarctic, and 1% is fit for human consumption. And so companies like Seven Sea are involved in making some of that 97% usable. Every drop of water has been on this planet for the last 5-10,000 years; it just comes in different cycles and in different forms. So we're involved in making that water usable, whether it's desalination, whether it's wastewater reuse, whether it's industrial wastewater treatment.
And the way you fix it is obviously, in my mind, to offer water as a service to areas where they may not have access to huge capital investment, but they can pay for water over time. And so we are happy to invest as infrastructure investors from our ownership structure to own the asset and then sell water as a service per usage, if you will. And I think that's one of the ways where you make it more accessible, and you work with other international organizations to maybe help finance that. Also, in the United States, we have obviously access to financing opportunities to make it aware for those who, as you point out, have scarcity of water and need it the most.
Clint Betts
What does a typical day look like for you?
Henry Charrabé
So, unfortunately or fortunately, we are remote like most people. So our water headquarters are in Tampa, Florida. Our wastewater headquarters are in Houston, Texas, and I, and most of our senior executive team, we travel. So normally, on a Monday, I go down to Tampa, and I come back on a Friday. I spend time in our office in Houston sometimes, on a wastewater site, and very often, I fly to locations. So in the Caribbean with customers, in the United States, and in Latin and Central America. So I do a lot of travel, so my typical day is going to the airport, travel and then spending the week wherever we think I and team is needed, and then I come back and try to spend the weekend at home.
Clint Betts
Those Caribbean trips must be rough.
Henry Charrabé
What is rough is everybody else is going there in their flip-flops, and you sit there with a suit and/or not in flip-flops, and you become envious, but it's not the worst of locations you can possibly go to. That's right. And once you get there, it's really nice to deal with local folks as well.
Clint Betts
As CEO, how do you decide where to spend your time? How do you decide, hey, this is what I'm going to focus on now over anything else? Because I'm sure you could focus on a million different things. How do you decide if this is what I'm going to spend my time on?
Henry Charrabé
So I think I'm very much focused on where I hope I can make the biggest impact on the business development and strategic side, where there are strategic projects and opportunities for us to focus on and then have a near-term return on investment, investment on my and other people's time. However, I think I was joking with somebody; normally, nobody calls you as a CEO and says, "Hey, I have great news." Normally, people call you because there's something to be fixed and something that you have to help the organization or your client overcome, and very often, that's how I think I spend my time. So, on the one hand, growing the business, working with the senior leadership team and other folks to grow and to get better at what we do. And on the other hand, sometimes, making sure that the fires are not getting too large and that, ultimately, we have a long-term growth perspective and continue to focus on what's of most value to the organization and to our clients.
Clint Betts
How do you stay motivated? I imagine the problem and the issue and what you're trying to solve is so motivating on itself, but on a day-to-day, weekly, monthly basis, how do you stay motivated as a CEO and leader?
Henry Charrabé
What motivates me the most is success. The success with others is to feel, not necessarily signing a contract, that's obviously nice too, but success in seeing that we're making progress, feeling that other people enjoy their day-to-day, right? Most people, as you probably know, go to work and want to get a paycheck, but what keeps people at work is that they enjoy what they do. That there's meaning in what they do, that they like either their boss or their colleagues or the people that report to them because otherwise they very often would prefer to stay home with their family.
And so that's the second part that motivates me. I have three kids, and I want to lead by example, and I want to make sure that they see that there's something good that we can do in the world and have a job and provide and motivates me as well to provide for them. So, on the one hand, growing the organization and seeing the success and, I hope, enjoyable moments in our colleagues' eyes, but at the same time also being motivated to do the best that I can as a father to my children.
Clint Betts
How do you define culture in your company?
Henry Charrabé
I think, again, creating an environment where people are happy, but the values that we represent are followed. I think that's the definition of culture. We just have these discussions of making sure that we obviously don't cut corners. We always always question the status quo. One of the things that I dislike the most is when people say, or you ask them, "Why have you done this?" Or "Why are we doing this?" And then the answer is, "Oh, because we've always done it that way." I think to open up and just question the status quo is a big part of the culture. That does not mean it is mutiny, but it does mean that everybody can be asked and questioned about what they're doing. And hopefully, three people always know more than two, so making things better. An open culture where people can talk, where people ultimately focus on what's best for the customer, and again, come to work because they enjoy showing up at 8:00 or 9:00 and they don't dread it. And I think that's part of a very healthy company culture.
Clint Betts
Is there a singular moment or something you look back on that helped reshape what you think it means to be a leader and has defined it in your career? Is there experience you've learned from where you're like, "All right, I need to implement that because of this"?
Henry Charrabé
I think what I've learned, when you are most challenged leader is when, you have to make hard decisions. And hard decisions, by definition, aren't popular. So there are several incidences where you have to... I think the definition of leadership is ultimately one word, and it might sound very simple, but it's to lead. You can take all sorts of great graduate classes or executive classes on what leadership means, but to lead means being willing and able to stand out of the crowd and to make sure that if things go wrong, it's on you.
And if there's success, it's always a team. And I think there have been several instances where I was, okay, this is time now for a leader to stand up and to lead through a difficult situation, whether it's a disagreement with investors or the board or the customer. And to do that by not forgetting the values and your personal compass that you have in order to ultimately do what's right by the company. Not what's right by myself or an individual, but by what's right by the company. And I think that's helpful advice that I've been trying to follow all along to make sure that there's no personal aspect of long-term decision-making.
Clint Betts
It sounds like what you're describing is empathy, right? In having empathy for your customer, your board, and your employees, what role do you think empathy plays in being a leader?
Henry Charrabé
Empathy is certainly part of it. And I think, again, looking through it from a lens of what is ultimately best for the organization? Because I think organizations are only successful if the employees in the organization are happy and there's a certain amount of fulfillment. So I think empathy plays a big role, but as with everything, I think we have to be careful not to only look through everything from one prism, right? It's not only empathy; it's a combination of several things, but I think empathy is an important aspect of doing the right thing.
Clint Betts
How often do you think about what's happening in the world, like macroeconomic environments, elections, uprisings, wars, things like that? It seems like, as CEOs, you're thinking about that a lot more than maybe you would've even 20, 30 years ago. How much time do you spend on macroeconomic factors versus what's happening inside your company?
Henry Charrabé
Every day. A lot. First of all, my big interest and passion is what's happening around the world, whether that's economics, international security, politics, terrorism, wars, as you mentioned. I tend to get up every morning and, the first half hour to hour, watch the news. I think it's an important aspect for me to understand what's going on. I tend to go to bed watching the news, and I watch it throughout the day. I spend a lot of time on it. And I think if you are in meetings and if you understand what also triggers people, then I think it's an important aspect of the meeting. If there are things that's happening around the world in certain communities and how that affects people's decision-making and wellbeing, I think that can only be helpful. And obviously, the US election will play an immensely important role in how this country and, therefore, the world will handle the next six to 12 months. So, I spent a whole lot of time thinking and paying attention to those aspects.
Clint Betts
Is there a leader that you look up to currently who's active either in the political realm or, the business realm, or the nonprofit realm where you say like, "Hey, I really look up to this leader," and somebody you would want to model at least some of your leadership traits after?
Henry Charrabé
I don't know if there's a specific individual, and I think there are aspects of people's abilities. I was impressed by the CEO of JPMorgan, Jeremy Diamond, who came out recently and had a nonpartisan description of what he believed are strengths and weaknesses by former President Trump and other leaders. I'm impressed by people who really go against the grain and mention advantages and disadvantages without being aware of the personal repercussions, but because they're the right thing to do, I take a lot from the people I work with. Sometimes, I'm really impressed of how they do things, and I'd like to copy their behavior and make sure that we in the organization value those to take risks and do it for the right reasons and also speak up when we think things don't go right. So I'm not sure that there's an individual, but I think there's several character traits that I'd like to follow and copy.
Clint Betts
Finally, and by the way, I can't thank you enough for your time. We end every interview the exact same way with this question, and that is at ceo.com; we believe the chances one gives is just as important as the chances one takes. And when you hear that, who gave you a chance to get you to where you are today?
Henry Charrabé
Oh, there were many along the way. I think mentors are incredibly important and critical in everybody's career path, and they have certainly been in mine. My first boss, as I said, after graduate school was Mr. Lauder. He gave me a whole lot of opportunity, and with him was his trusted advisor, his name was Dick Parsons. And Dick Parsons was, amongst others, chairman of Citigroup and, at one point, the head of the LA Lakers. And we were in the conference room, and we were presenting at the first time this water endeavor in 2000, I don't remember the year, the early 2000s. And Dick said, "Well, Henry can run it." So that was really the first time that somebody had suggested it, and it turned out to be really, really helpful to me.
There were others that have helped me along the way immensely, whether it's business, colleagues, family, and I think mentorship is something that I have been truly blessed with. And I always say, if you're the smartest person in the room, then you're in the wrong room. So you always want to surround yourself with people who are smarter and better than you, and you can learn from and then hopefully do a 2.0 version of what they have taught you. So there are many things along the way or many people along the way that I've been really grateful to have in my life and to learn from.
Clint Betts
Henry, thank you so much for joining us. Thank you for spending your time and talents on water and water accessibility and everything that you're doing in the world. It's really meaningful.
Henry Charrabé
Thank you for the opportunity.
Clint Betts
Yeah. Thank you so much, Henry. Have a good one.