#06 From municipal energy supplier to platform for the energy transition

#06 From municipal energy supplier to platform for the energy transition

In this strategy interview, badenova Co-CEO Hans-Martin Hellebrand reports on the two-year journey of a municipal energy supplier with more than a century of roots to become the digital platform for the energy and heating transition in southern Germany. Christian Underwood and Prof. Dr. Jürgen Weigand get to the bottom of the secret behind the success of this strategic realignment: from the participative strategy process, to shared leadership in the highest corporate office, to agile target management with Objectives & Key Results (OKR).

From IT controlling to the innovation lab in Silicon Valley and to the energy supplier

Hellebrand's remarkable career includes a degree in business administration from the University of Bielefeld and entry into controlling at RWE Systems in 2006. With continuous responsibility and leadership skills, he was eventually appointed Senior Vice President Group IT Controlling. His passion for innovation and technological progress led him to Innogy as SVP Global Innovation & Cooperation, where he was instrumental in founding and developing the InnovationHUB in Silicon Valley. Along the way, he successfully completed his Executive Kellogg-WHU MBA and the CIO programme at WHU. After three years in the USA, he returned to Germany in 2018 to accompany the growth course of the energy discounter eprimo as Managing Director. His passion for digital transformation in the energy industry finally led him to badenova as Co-CEO in July 2021.

Vision: Shaping the energy and heating transition for a liveable future

"We are shaping the energy and heating transition for a future worth living. With the region, for the region."  This is the WHY of the company. But what does that mean in detail? Hans-Martin Hellebrand explains that badenova's mission statement is to shape the sustainable energy world of tomorrow. In doing so, all aspects of the energy world, including the transformation of the entire energy system and the vital energy of water, are to be taken into account. A particular focus is on tackling this goal together with the region for the region. This is because the transformation of the energy system requires the cooperation of many stakeholders and is not just in the hands of the energy supplier. To ensure that this cooperation succeeds optimally, badenova - in addition to the classic mandate for the supply of sustainable energy, heat and water - organises the energy solutions for private households in a digital end-to-end platform. In this way, all the necessary partners for the decentralised energy turnaround at the customer's are optimally controlled into a holistic offer.

"We all have to pull together to make the energy transition possible.”

Hellebrand emphasises that badenova's target image is based on Simon Sinnek's "Golden Circle". This answers the questions: Who are we? Where do we want to go? He says that the wording "target image" (and not "purpose" or similar) was deliberately chosen in order to make the core more comprehensible to the staff: The goal picture serves as a point of orientation for all employees and gives them the energy and confidence to move forward with confidence every day.

It explains that their goal is to shape the energy future by moving away from the current fossil fuel system towards a better future, but not in a dogmatic way. They want to involve their customers in this journey and help them make the best transition to sustainable energy.

Innovation and digitalisation offerings in badenova's portfolio

Christian is interested to know whether Hellebrand's time in Silicon Valley has translated into innovative, digital product ideas for badenova. Hellebrand starts by explaining that badenova basically has a strong innovation DNA in its blood and has had the ambition to change the world for years. For example, when badenova was founded, an innovation fund was established in which a portion of the annual profits of the shareholders flows into a fund to promote innovative projects in the region.

Hellebrand then goes into concrete innovative solutions that badenova is already implementing, which could well have been created in Silicon Valley. One example is the platform-driven ecosystem approach for the decentralised energy transition for private customers. The aim is to understand the needs and the infrastructure of the customers in order to find the optimal energy solution for the respective customer. The platform brokers solar systems, batteries and other products from hardware manufacturers, while regional craftsmen are involved to install and maintain the products. badenova also works with partners such as building societies and banks to secure financing.

Furthermore, Hellebrand emphasises that badenova clearly focuses on its core competencies here, namely the relationship with its customers and the knowledge of energy. In the search for the optimal solution, however, it is important to work with partners and experts to find a holistic optimal solution. Hellebrand speaks of an "Uber or Airbnb approach" in the energy sector and emphasises that badenova's claim to be a pioneer in energy innovation is not limited to this.

From Silicon Valley to badenova: German SMEs can keep up!

His passion for IT and innovation led Hellebrand to Innogy in 2015 as SVP Global Innovation & Cooperation, directly into the heart of Silicon Valley. There, for three years, he drove the founding and development of the InnovationHUB. Despite the cultural differences between Silicon Valley and a down-to-earth, traditional company like badenova, he felt at home right from the start and was warmly welcomed. He described Silicon Valley as an entrepreneurial environment where you tackle a lot.

"Compared to many experiences in large corporations, I find the attitude and mindset I find among SMEs in regional and municipal companies much more similar to Silicon Valley than in a large corporation."

Participative design of the strategy process

So Hans-Martin Hellebrand joined badenova only two years ago and, together with his co-CEO colleague and the entire team, managed to completely reorganise the company strategically in this short time. A remarkable record: How did he approach this transformation to achieve such results?

First of all, they set a target picture to have a point of orientation for further work. In doing so, it was important for them to involve the entire company by collecting voices from all hierarchical levels and choosing a participatory approach. The goal was to find an image that was shared by all employees and served as a driving force. This goal image was then iteratively developed and finally used as a north star for the strategy work.

Concrete paths of action were identified that lead in the direction of the goal, such as rethinking the gas network or implementing a decentralised energy future for customers. Hellebrand emphasises that it was important that each employee could identify with the process and have ownership of their own work. This was achieved through the participatory approach and the joint work on the target image.

How badenova uses shared leadership and OKR

In the end, does only one:r really need to be the main decision-maker in a company for it to be successful? badenova proves otherwise. Hellebrand describes its governance structure as a two-person board where there is no primus inter pares. Instead, he runs the company together with his colleague Heinz-Werner Hölscher as a team, without one having more say than the other. Although each of them has focus areas, they manage responsibility entrepreneurially as a whole.

badenova also relies on a methodology called OKR (Objectives & Key Results) in which the company sets concrete goals at the beginning of each 4-month cycle in the form of tangible, desired "outcomes" to be worked towards within this period. What is important here is the dialogue-based cooperation with the team on the way to achieving the goals in a sprint as well as the implementation of a retro and review analysis at the end of a cycle in order to continuously improve.

The consequence of this model is a dialogue-based cooperation and a stronger involvement of employees in decision-making processes. It also promotes a culture of cooperation and teamwork throughout the company.

badenova introduced this methodology in a very "low-threshold" way by first defining the "top issues" for the next sprint with the teams. In this way, the value of the methodology became very clear, and only in the coming sprints was the then already established "school of thought" continuously refined.

The advice of the day from Hans-Martin Hellebrand

Christian concludes by asking which skills are now really crucial to be successful in a constantly changing environment. In summary, Hellebrand's time in Silicon Valley taught him to always look outwards for change and opportunity and to have the courage to implement new ideas and concepts. Even if they come with a certain risk of failure. In conclusion, he emphasizes that learning from mistakes and adapting strategy are crucial to achieving lasting success in a constantly changing environment.