It's nice to now have a way of talking about our company and strategy that's easy to understand and relate to.
During the period of 2016–2020 and 2021–2022, Karin Lepasoon worked as Vattenfall's Head of Communications and was influential in formulating the purpose of the company, Power Climate Smarter Living, and the target of enabling fossil free living within one generation. What role did the purpose and goal play in reversing the decline in company engagement and trust?
When you started at Vattenfall, you didn't have any previous experience of the company. You came in with a new view on things. What did you see?
"One of the first things I did was to ask the communications managers of each business area to come together in a group and present their part in the Group strategy. After the fact, they discovered that they 'communicated using different messages and methods'. We concluded that they were talking about and describing six rather different companies. Not one of them spoke about the Group-wide strategy or 'the energy you want', which was the catch phrase used then. And at the same time, employee engagement at Vattenfall seemed to be very low."
In what way was it noticeable?
"I was struck by how I would hear so many people express their personal opinions on what Vattenfall should be doing. Not only did they feel they were right, but they also felt they had an obligation to launch their own strategies. I remember a Town Hall meeting in the Arenastaden atrium in which someone sitting right up front raised their hand and said: 'I think this is the wrong strategy for Vattenfall.' I think it's rather uncommon for someone in-house to so openly and definitively question the direction of the company. But at its core, I don't think it was a matter of strong opposition but rather that there were 20,000 different perceptions of what the strategy meant. This was one of Vattenfall's greatest problems."
You then began working on formulating the purpose of Vattenfall. Why was that so important?
"In the late autumn of 2016 the results of the employee survey came in and showed worryingly low engagement – 57% and declining in recent years. Magnus and the entire management team were very discouraged but nonetheless resolved that this was something that needed to be changed! We felt the company needed an identity that would make people feel pride in what was done historically, but also in what the company was currently doing and its direction for the future. There were often positive sentiments on the local level where, for example, there was pride in the hydro power plant they were working on or in the business area of Hydro as an organisation. But there was a sense of pessimistic uncertainty in the future prospects of the Group. Added to this, the company also had a poor reputation with the public."
What caused this poor reputation?
"In just under ten years, Vattenfall made write-downs of SEK 165 billion. We bought up Nuon when the price of electricity was at its highest, at the highest price ever for a company acquisition in Sweden. Then, when the value of the acquisition drastically declined due to lower prices of electricity, the minister responsible, Maud Olofsson, was questioned by the Committee on the Constitution. But hindsight is 20/20. As we know, it's not easy to predict how electricity prices will develop. Then, we sold the lignite operations, which many people felt we should have shut down instead. We were portrayed in the media as being poor business people and environmental villains. This led to an inordinate number of people, from environmental organisations and media commentators to politicians and parties in Sweden and Germany, to have strong opinions on how Vattenfall should be run. This poor reputation and negative attention certainly had a negative impact on the self-confidence of our employees. Still, we continued to deliver products and services to our customers and many employees felt good about their own work and that it was meaningful."
So then what was your plan?
"We realised that we were talking about our company, our business and our operations in a way that did not engage our employees or our surroundings. And yet, we had a business strategy that perfectly fitted into the issue of climate, which was getting greater attention on the political agenda and which both worried and engaged the public. We realised that our strategy was very relevant and that it delivered a solution to at least part of the problem. But we needed a relevant way of talking about it."
The purpose you finally established for Vattenfall was Power Climate Smarter Living, connected to a new target: enabling fossil free living within one generation. What is the story here?
"Vattenfall's purpose is about gradually offering our customers solutions that will enable them to live a more climate-smart, entirely fossil free life within one generation. 'Power' naturally refers to our product but also to our being a leading force in transitioning to fossil free living. It is also important that we talk in terms of 'living' – we are striving for more than only transitioning our own generation. Instead, we see it as ultimately improving the lives of our customers. In terms of strategy, this means that all investments and new projects are required to demonstrate how they will bring us closer to this goal. Clear examples of this are the divestment of lignite operations and entering into projects like Hybrit, for fossil free steel, and CemZero for fossil free cement."
Sustainability entails more than just the climate. In spite of this, social sustainability and diversity are not mentioned in the purpose.
"And these are, of course, very important issues. But if you try to make a purpose all-encompassing, you risk watering it down and stacking fluffy words on top of each other. What's nice is that we dared focus on the greatest contribution Vattenfall as a company can make to society. It was a good decision to describe our role in driving change on the system level."
Did you encounter any obstacles along the way considering the number of in-house critics and the organisation being large and sprawling?
"Hmm. I can't think of any! The six months it took for us to come up with our four words, 'Power Climate Smarter Living' may seem like a long time, but the Vattenfall organisation appreciates co-creation and participation. And it was vital to find something that the entire company could get behind. The Purpose initiative was on the agenda of every EGM meeting for half a year and we often ended up devoting an hour to decisions that normally take 15 minutes. We had other formulations up for discussion but unanimously voted them down. For example, 'make energy personal' and 'eradicate fossil fuels', but finally, we decided on 'Power Climate Smarter Living'. We took our time in making the right decision. In our efforts, we increased the entire management team's understanding of what a company purpose is and what effect it can have."
How was the new formulation received internally?
"The first time it was launched was in the spring of 2017 at a meeting of Vattenfall's 100 upper managers in Berlin. We ended the two-day workshop on our new purpose with a Mentimeter quiz question: 'Do you think this purpose can propel the company forward?' The response was displayed right away on the screen. We got almost 100% positive responses. The only reason that it wasn't a full 100% was that our brand manager, who led the entire project, wasn't able to cast a vote on his mobile. Somehow, I think he would have cast a 'yes' vote."
Great results. How did it feel to get immediate feedback like that from all the top managers that were there?
"Right then, when the room got quiet and everyone was voting on their phones I thought, 'If the outcome is bad, I may as well pack my bags and leave'. It was my first substantial project at Vattenfall and I didn't have any history with the company to fall back on. But it felt like we had something that could be really good for Vattenfall."
Later in the autumn of 2017, the next employee survey was in.
"I remember Magnus calling me to say, 'Have you seen the numbers?' I couldn't see him so I wasn't entirely sure, but he sounded genuinely happy. The numbers had gone up by seven percentage points. The company enlisted to do the survey for us suggested that such a quick improvement was near impossible."
How did the management team react?
"They had already felt the shift in their encounters with employees but it was nonetheless a relief to have it in black and white."
So what has "Power Climate Smarter Living" accomplished?
"It's nice to now have a way of talking about our company and strategy that's easy to understand and relate to. It led to a more positive view of Vattenfall and that there were fewer people vying to run the company, giving us the peace and quiet to work. Since 2017, employee engagement has gone up another 5 percentage points and we are now ranked along with Volvo and IKEA as one of the five most purpose-driven brands in Sweden. The reputation of the Group is the best it's ever been since we started measuring."
What is the most important lesson you learned in working with Vattenfall's purpose?
"That the company's strategy and communications need to be built on each other. We found something that was 100% strategic and 100% communicative, and, that was fully integrated. Power Climate Smarter Living is no slogan, nor is it a disconnected sustainability strategy – it IS Vattenfall's strategy. For me, it's a beautiful thing!"