HBR On Strategy

How a Coal Polluter’s New Strategy for Sustainability Transformed Its Business

Oct 23, 2024

Mark Kramer, former Harvard Business School senior lecturer and co-founder of FSG, delves into Enel's remarkable transformation from a major coal polluter to a leader in renewable energy. He explains the strategic changes that facilitated this shift, such as innovative long-range planning and addressing the innovator's dilemma. Kramer discusses the cultural shifts necessary for embracing sustainability and how traditional industries can adapt to modern challenges while balancing business needs and environmental responsibilities.

21:38

Episode guests

Mark Kramer

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Quick takeaways

Enel's transformation from a coal-dependent monopoly to a renewable energy leader illustrates the importance of strategic innovation and responsive leadership in today’s evolving markets.

The establishment of Enel Green Power exemplifies how creating a separate entity can foster an agile culture, driving breakthrough sustainability projects in the energy sector.

Deep dives

Enel's Transformation Journey

Enel, initially a state-owned coal-intensive monopoly, underwent a significant transformation to become a leader in renewable energy by 2019. The shift was spearheaded by CEO Francesco Staracci, who recognized the need for innovation in response to increasing regulations and the business landscape's changing dynamics. Under his leadership, Enel created a separate entity, Enel Green Power, focused exclusively on renewables, allowing for a new entrepreneurial culture that was agile and innovative. This structural change enabled Enel to pivot effectively toward sustainability, positioning the company as a trailblazer in the renewable energy sector.

Intro

3min

Transforming a Power Company: The Shift to Renewable Energy

6min

Transforming Energy: From Monopoly to Sustainability

10min

Navigating the Shift from Coal to Renewables in Power Generation

3min

Transforming Tradition: A Coal Polluter's Sustainability Journey

2min

Enel, Italy’s state-owned power company founded in 1962, was one of Europe’s largest coal users and polluters. Now it is recognized as a leader in renewable energy services and has integrated sustainability into its business model and operations.

In this episode, former Harvard Business School senior lecturer Mark Kramer explains how Enel made that enormous strategic change — from its long-range planning to how it tackled the dreaded “innovator’s dilemma.”

Kramer studied the company’s transformation into a renewable energy leader in his case, “Enel: The Future of Energy.”

Key episode topics include: strategy, change management, leadership and managing people.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

· Listen to the original Cold Call episode: How a Coal Polluter Became a Renewable Energy Leader (2018)

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