Establishing our purpose was one of the most important things we did during my time as CEO.
After nearly six years as President and CEO Magnus Hall decided to leave Vattenfall at the end of 2020.
Magnus Hall led the company at a time when climate issues were growing in importance, both on the political agenda and as a matter of concern to the general public. In this interview, he talks about the role that Vattenfall's purpose played in transforming the company, and how fossil-free living in the future will differ from the way we live today.
When you took over as CEO, there was a discussion about the idea of bringing in other owners and selling off the continental section with the aim of Vattenfall becoming a Scandinavian company. But you changed those plans. Why was that?
'When I started in September, I went around the company and met a lot of people. And I saw dynamics that came as a result of being a multinational company. We're really big in Scandinavia, and if we only did business there, we'd lose both the dynamics and the opportunities for growth. Finally, I came to the conclusion that we should keep the company together and organise it around functional, instead of regional, business areas.'
But despite the advantages of being big, the decision was made to sell off some of our parts of the company.
'In Lausitz, we were generating electricity via lignite combustion. This didn't fit in with Vattenfall's strategy at all, and I didn't see any potential for future growth. In order to grow, your business needs to be relevant. After divesting from lignite, there was an opportunity to become more climate-smart across the whole company. It was the start of a transition.'
Part of the transition was establishing what the company's purpose was. Can you tell us more about that?
'The most important task of our time is solving the climate issue. We've measured opinions across our markets and, despite the pandemic, people are telling us that the climate is their number one concern. This is what we need to manage, and the energy issue is crucial to the solution. It was obvious that we were a part of a world that needed to be more climate-smart, and at that time, it was important to find a simple way of explaining to the wider world what Vattenfall stood for. At the same time, we needed the entire company to feel involved. Not everyone in the company realised that we're all working together and people had different perceptions of where we were heading.'
What has the purpose contributed?
'I'm most proud when I see people's growth. When I started, Vattenfall's story was being dictated by the world around us. Now, there's a completely different sense of self-esteem and pride, and it's been emotional, seeing our employees' recognition of this change in our internal employee surveys. But over time, it became more and more clear that there was a strength to be found in using the purpose as a lens to see what was right for the company. When we made decisions at management level, we could reconcile these with the purpose: how does this contribute towards 'powering climate-smarter living'?
You sound very dedicated when you talk about this project.
'The purpose ended up going beyond expectations, based on how guiding and cohesive it was, while at the same time 'power climate-smarter living' and the goal of offering customers a fossil-free life within one generation is an extremely strong external communication platform. Establishing our purpose was one of the most important things we did during my time as CEO.'
A year after the purpose was presented, a new look for Vattenfall was also launched, including a new logo. Why was this important?
'I think it's important as a company to live and express yourself in a modern way. There was nothing wrong with the old logo and the look, but we created something fresh and innovative. A new visual identity was a natural step that also signalled the change that was taking place.'
Some employees protested because they were upset about the new logo. How did that feel?
'We knew there would be different reactions, and we were also open to both constructive criticism and people expressing their disappointment. But it disturbed me that so many people were really rude in the way they expressed themselves, and personally attacked their colleagues that had developed the new look. They're professionals who deserve the same respect as anyone else who's doing their job. I felt that this moment was a low point in our verbal communication in the company.'
What will it take for Vattenfall to achieve its goal of fossil-free living within one generation?
'We have to implement our own transition, and at the same time be clear that this will take place step-by-step. And essentially, it's about ensuring the products we produce are fossil-free. Our customers, both companies and consumers, should be able to rely on electrification as a foundation and this electricity should be fossil-free. It's important for us to be able to make things possible, to offer solutions for people who want them, and not be preachy. Fossil-free living needs to be easy.'
Why is the goal 'in one generation'? Wouldn't it have been easier to set a date that it should be achieved by?
'Using the word generation is clever in several ways. Firstly, it respects the fact that the transition will take time, and secondly it connects to the generation that are growing up now, giving a vision of their future. But it also signifies movement and forward drive, and that we're actually generating electricity. But we don't want to get stuck on saying 'within one generation'. The children who were born when we established that goal are now at an age where they can talk – and question us, the adults. The goal will remain, I'm convinced of that, but soon we'll have to formulate it in a new way so it doesn't lose credibility.'
How do you think fossil-free living in the future will differ from how we live today?
'A lot of people seem to think that, in the future, society will be more difficult and boring, that we'll shut down and do less of the things we enjoy. I don't believe that. On the contrary, technological developments will make life easier and more comfortable. For example, anyone who's started driving an electric car doesn't feel any great need to go back to driving a petrol car - the electric car is better. At the same time, more electric vehicles will lead to an improvement in standards, in the form of less noise and less emissions of harmful particles. In parallel, we'll see technologies evolving that we have no idea about today, in the same way that we had no idea what the effects of the internet would be 20-30 years ago. I find it very difficult to imagine that life will not improve in the future.'
But will we be able to consume like we do now, travelling by plane, for example?
'In the future, you'll have to pay a little more for flying fossil-free, for example, compared with the alternative of using fossil fuels. But technological development always drives prices down, and with a general increase in prosperity, we could even spend less of our money on flying, even with fossil-free hydrogen, which is a more expensive fuel.'
What do you think Vattenfall's role will be, after we've gone past one generation and the goal of fossil-free living has been achieved?
'There's so much technological development going on now, but generating and managing energy will always be important for society at the same time as the need for electricity increases. I'm convinced it will bring us new business opportunities. So I have no problem being optimistic about the future of the company.'