#40 From municipal utility to platform for the energy transition

In this strategy interview, badenova Co-CEO Hans-Martin Hellebrand describes the two-year journey of a municipal utility with roots going back more than a century as it became the digital platform for the energy and heating transition in southern Germany. Christian Underwood and Prof. Dr. Jürgen Weigand dig into the secret behind this strategic realignment: a participatory strategy process, shared leadership at the very top of the company, and agile goal management with Objectives & Key Results (OKRs).

Hellebrand's remarkable career includes a degree in business administration from the University of Bielefeld and a start in controlling at RWE Systems in 2006. Taking on ever greater responsibility and proving his leadership, he was eventually appointed Senior Vice President Group IT Controlling. His passion for innovation and technological progress took him to Innogy as SVP Global Innovation & Cooperation, where he played a key role in founding and building the Innovation HUB in Silicon Valley. Along the way, he completed his Executive Kellogg-WHU MBA and WHU's CIO program. After three years in the U.S., he returned to Germany in 2018 to join energy discounter eprimo as Managing Director and support its growth. His passion for digital transformation in the energy industry finally brought him to badenova as Co-CEO in July 2021.

"For a future worth living, we are shaping the energy and heating transition. With the region, for the region." That is the company's WHY. But what does it mean in practice? Hans-Martin Hellebrand explains that badenova's vision is to shape the sustainable energy world of tomorrow. That covers every aspect of the energy world, including the transformation of the entire energy system and water as the source of life. A particular focus: tackling this goal together with the region, for the region. Rebuilding the energy system takes many players and does not rest in the hands of the utility alone. To make that collaboration work, badenova organizes energy solutions for private households in a digital end-to-end platform, alongside its classic mandate of supplying sustainable energy, heat and water. This way, all the partners needed for the decentralized energy transition at the customer's site are coordinated into one comprehensive offering.

"We all have to pull in the same direction to make the energy transition possible."

Hellebrand points out that badenova's vision is based on Simon Sinek's "Golden Circle." It answers the questions: Who are we? Where do we want to go? The team deliberately chose the word "vision" (rather than "purpose" or something similar) to make the core idea easier for the workforce to grasp: the vision serves as a point of orientation for all employees and gives them the energy and confidence to move forward every day.

He explains that their goal is to shape the energy future by moving away from today's fossil fuel system toward a better future, but not in a dogmatic way. They want to bring their customers along on that journey and help them make the best possible transition to sustainable energy.

Christian wants to know whether Hellebrand's time in Silicon Valley translated into innovative, digital product ideas for badenova. Hellebrand first explains that badenova has always had innovation in its DNA and has aimed to change the world for years. Right from the start, badenova set up an innovation fund that channels part of the shareholders' annual profits into financing innovative projects in the region.

Hellebrand then turns to concrete innovations badenova is already implementing, ideas that could just as easily have come out of Silicon Valley. One example is the platform-driven ecosystem approach to the decentralized energy transition for private customers. The point is to understand customers' needs and infrastructure in order to find the energy solution that fits them best. The platform brokers solar systems, batteries and other products from hardware manufacturers, while local tradespeople are brought in to install and maintain them. badenova also works with partners such as building societies and banks to secure financing.

Hellebrand also stresses that badenova focuses squarely on its core competencies: the relationship with its customers and its knowledge of energy. When it comes to finding the best solution, though, working with partners and experts is essential to arrive at something comprehensive. Hellebrand calls it an "Uber or Airbnb approach" in the energy sector, and he makes clear that this is only one of the areas where badenova intends to lead on energy innovation.

His passion for IT and innovation took Hellebrand to Innogy in 2015 as SVP Global Innovation & Cooperation, right into the heart of Silicon Valley. For three years, he drove the founding and development of the Innovation HUB. Despite the cultural differences between Silicon Valley and a down-to-earth, traditional company like badenova, he felt at home from day one and was warmly welcomed. He describes Silicon Valley as an entrepreneurial environment where people get a lot done.

"Compared with much of my experience in large corporations, the attitude and mindset I find in mid-sized companies and in regional and municipal businesses is far closer to Silicon Valley than to a big corporate."

Hans-Martin Hellebrand joined badenova just two years ago, and in that short time he, his Co-CEO colleague and the entire team completely repositioned the company strategically. An impressive track record. How did he approach this transformation to get results like that?

They started by defining a vision to give the work ahead a point of orientation. It mattered to them to involve the whole company, gathering voices from every level of the hierarchy and choosing a participatory approach. The aim was to find a picture that all employees share and that drives them. This vision was then developed iteratively and ultimately used as the north star for their strategy work.

Along the way, they identified concrete courses of action leading toward that goal, such as rethinking the gas grid or building a decentralized energy future for customers. Hellebrand stresses how important it was for every employee to be able to identify with the process and take ownership of their own work. The participatory approach and the joint work on the vision made that possible.

Does one person in a company really have to hold the final decision-making authority for it to succeed? badenova proves otherwise. Hellebrand describes their governance structure as a two-person board with no primus inter pares. Instead, he runs the company as a team together with his colleague Heinz-Werner Hölscher, with neither having more say than the other. Each of them has focus areas, but they carry entrepreneurial responsibility for the whole.

badenova also relies on a method called OKRs (Objectives & Key Results): at the start of each four-month cycle, the company defines concrete goals in the form of tangible, desired outcomes to work toward within that period. What matters here is an ongoing dialogue with the team on the way to reaching those goals in a sprint, plus a retrospective and review at the end of each cycle to keep getting better.

. The result of this model is collaboration built on dialogue and employees who are far more involved in decision-making. It also fosters a culture of collaboration and teamwork across the entire company.

badenova introduced the method with a very low barrier to entry, starting by defining the "top topics" for the next sprint with each team. That made the value of the method obvious, and only in later sprints did they refine the now established way of thinking step by step.

Christian closes by asking which skills really matter for succeeding in a constantly changing environment. In short, Hellebrand's time in Silicon Valley taught him to always look outward to spot changes and opportunities, and to have the courage to put new ideas and concepts into practice, even when they carry a real risk of failure. He ends by stressing that learning from mistakes and adjusting your strategy are what keep you successful in an environment that never stops changing.