The time has come for me to write my final CEO Letter after nearly 10 years as CEO of this fantastic company, Vattenfall. It has been an incredibly eventful time, and a time of tremendous growth for Vattenfall. For that, I want to thank all my colleagues and fellow-employees who have made it possible for this period to be great fun and successful. Vattenfall’s development over the last 10 years has been nothing less than industrial history.
The key to success
There can be no doubt that Germany has been the key factor in Vattenfall’s outstanding growth during the last 10 years. Setting up the German business involved a long series of complex transactions, the coalescing of different cultures, and a great deal of value creation. The main success factor was a credible vision of the future for the company, for Germany and for our customers. One critical event in the early days of the German construction was when the then Head of the State Enterprises Division of the Swedish Ministry of Enterprise, Energy and Communications, Dag Detter, challenged us to seize the initiative in Berlin about what was then Bewag. It would not have been possible to take this initiative without the solid support of the Board of Directors and the State Enterprises Division.
While Vattenfall was building up a thriving business in Germany, we were also establishing ourselves in Poland, Denmark, the United Kingdom and most recently in the Netherlands. All in all, today’s Vattenfall provides a sound platform for building tomorrow’s company.
Early awareness of climate issues
Another major strategy underlying our development was our early awareness of the effects of climate change on our business prospects and strategy. Let me mention the effects of emissions trading, and our early investment in CCS as particularly important developments in recent years.
Vattenfall as well as I personally, together with Arne Mogren, have been deeply involved in the global climate change issue. This has been very worthwhile, and we have achieved wide recognition for our efforts. We have also been able to exert influence on the global discussions thanks to pioneering work in areas such as the development of cost curves for emissions reductions.
One difficulty I have encountered during my 10 years at Vattenfall is to do with being the CEO of a company in a politically sensitive industry, owned by the Swedish state, and whose ownership is exercised by politicians. I have known several Government Ministers and Secretaries of State. They have acted in different ways, but one thing they had in common – they had to deal with many conflicting interests simultaneously. As owners, politicians always have to manage two agendas. Vattenfall often ends up in the middle, in a media battleground. That certainly makes it difficult to be an owner – and equally difficult to be the CEO of Vattenfall. I may at times have given too little priority to Swedish politics compared to running the business.
What pleases me most is that Vattenfall is well prepared for the future. The company has a strong position in the Northern Europe energy market, with a competitive generation portfolio. Vattenfall has the size and financial strength that gives us future opportunities. We have a world-class position in off-shore wind. We are leaders in CCS. We are on the threshold of a strategically important breakthrough in biomass. We can look forward to opportunities for new construction in nuclear power in partnership with Sweden's basic industries. In e-mobility we have a leading position jointly with Volvo and BMW. The future is electric!
In 10 years’ time it is likely that Vattenfall will be among the European companies who have positioned themselves as market leaders. By then, it will be obvious to everyone that the switch to low-emission generation methods has won the day. CCS technology will become commercially available.
For Vattenfall’s management at all levels it is of critical importance to take responsibility for implementation (within the bounds of the appropriate strategy), by seizing the initiative in the strategic direction and by following up on implementation and delivery.
In management discussions, we often distinguish between doing things right and doing the right things. For Vattenfall there is no doubt – what matters most is doing the right things. This is linked to the large capital investments needed in our industry, for winning the long-term competitive game. Best of all is of course to do the right things right.
I am convinced that Vattenfall has a great future. Øystein Løseth will be a fine leader and CEO, and I wish him all the best at Vattenfall. A strong Group Management is supporting him, plus very committed and highly skilled employees.
The experiences from Lars Josefsson's time as CEO have been brought together in a new publication "Ten years of Vattenfall".
Ten years of Vattenfall