First quarter investment in U.K. scale-ups climbs
May 4, 2022
Senate confirms Jerome Powell to second term leading Fed
May 12, 2022

How a solar energy developer positioned itself for rapid growth

By Verne Harnish

When New Energy Equity holds its quarterly meetings, CEO and co-founder Matthew Hankey and Josh Kunkel, the company’s head of sales/business development, participate in an unusual tradition: They go head-to-head on what the company’s quarterly sales targets should be. The national company develops and finances community, commercial and small, utility-scale solar projects, and these targets are important.

“Everyone looks forward to this part of the day,” says Scaling Up Certified Coach Greg Eisen, who has been working with the Annapolis, Md.-based company since 2020. 

It’s all in the spirit of growing the company. And New Energy Equity is growing rapidly, so much so that it attracted a $165.5 million investment from ALLETE, closing the deal in April 2022.  ALLETE has been ranked the number one investor in renewable energy in the U.S., relative to market capitalization, among all U.S.-owned utilities.

Meanwhile, New Energy Equity is now currently about halfway through a five-year, Big Hairy Audacious Goal (BHAG) it set with Eisen: 650 megawatts of installed capacity. In working toward that goal, the company, founded in 2013, has grown from about 32 employees to 85—tripling profits by using the Scaling Up platform. “They embraced the process from the start and never looked back,” says Eisen. 

Putting Values and Purpose front and center

One critical step for Hankey and his leadership team was completing a One-Page Strategic Plan with Eisen. This helped them articulate their plans for the company and establish the accountability to put them into action. 

“It really forced folks to own the goals they took on and hopefully celebrate the successes or learn from failure if there was one,” says Hankey.

Drafting the company’s Core Values—such as “We’re all in,” “Top of our game,” and “Lift as we climb”—was a critical part of this work. The company shares its Core Values in an infographic, which appears on wall signs and mugs. “It’s plastered all over our office,” says Hankey. 

As part of this exercise, New Energy Equity also decided on its Core Purpose. “We’re a mission-driven organization,” says Hankey. “We’re trying to change the world through solar energy.”

Creating a great culture

Once the team gave voice to the Core Values and Core Purpose, hiring the right people and creating a culture that made them want to stay became easier. 

“The discovery of the company’s Core Values, Core Purpose and BHAG enabled the team to clarify and identify with a set of beliefs around HOW we behave here, WHY we exist and WHERE we are going,” says Eisen. “This foundation allowed their culture to ‘spread its wings’ and truly fly.”

To keep their finger on the pulse of how team members were experiencing the culture, Hankey and his leadership team monitored the company’s Employee Net Promoter Score (eNPS). This is an indicator of whether team members would recommend working there to their friends. The company currently scores an 89, considered an outstanding score. 

When the leadership team learned through this survey that employees wanted more visibility into the company’s plans and goals, they began sharing key goals through monthly internal newsletters and providing progress reports every two weeks on TV screens throughout the office. “The reaction we got was, ‘What can I do to help achieve that goal?’” says Hankey.

Embracing Quarterly Themes

New Energy Equity has added an element of fun to pursuing the company’s Quarterly Goals by adopting Quarterly Themes. Often, these are built around entertaining competitions, where the prizes are experiential rewards for the organization and generous donations to charities. 

The Lift As We Climb Foundation, a charitable organization that the company’s team created, resulted from one of these competitions. Employees presented to the New Energy Equity board of directors in a Shark Tank style competition their idea of how the company could support local organizations with “winnings” earned from achieving company goals set throughout the year. The Lift As We Climb Foundation donates funds to industry and geographically-related organizations that share the same Core Values and Principals as New Energy Equity. This year the Lift As We Climb Foundation has a goal to raise and donate $100,000 to these organizations.

Daily huddles for the executive team and weekly or biweekly huddles for other teams in the company became a foundation of meeting the company’s Quarterly Goals. 

“The establishment of daily and weekly Meeting Rhythms, along with a Quarterly Planning regimen, provided them with the structure and discipline they needed to focus and drive accountability, enabling the acceleration of growth at a breakneck pace,” says Eisen.

Protecting cash

When general financing slowed down during the pandemic, the leadership team decided to protect the company’s cash at all costs. Hankey introduced a weekly “cash flow huddle” to stay on top the company’s finances. “We were looking at cash almost as if we had a cash flow problem even though we did not,” Hankey explains. 

Winning a credit line increase and closing a $50 million round of project financing from Silicon Valley Bank and SVB Capital in September 2021, has allowed the company to invest in community solar projects in New York State and other markets. This contributed to New Energy Equity’s growth during the pandemic.

“We used what was a challenging situation to create opportunities,” says Hankey. “We were able to secure our position, and lean in to attract new business, allowing us to thrive.”

But Hankey and his team aren’t ready to rest on their laurels. They still have an ambitious BHAG to achieve—one that’s as much about giving back as it is about business results. As the company’s Core Purpose puts it, “We want to drive the evolution of clean energy through every purchase we touch, leaving behind a better world.” 

Verne Harnish
Verne Harnish
Verne Harnish is founder of the world-renowned Entrepreneurs’ Organization (EO) and chaired for fifteen years EO’s premiere CEO program, the “Birthing of Giants” and WEO’s “Advanced Business” executive program both held at MIT. Founder and CEO of Gazelles, a global executive education and coaching company with over 150 coaching partners on six continents, Verne has spent the past three decades helping companies scale-up. The “Growth Guy” syndicated columnist, he’s also the Venture columnist for FORTUNE magazine. He’s the author of Scaling Up (Rockefeller Habits 2.0); Mastering the Rockefeller Habits; and along with the editors of Fortune, authored The Greatest Business Decisions of All Times," for which Jim Collins wrote the foreword. Verne also chairs FORTUNE Magazine’s annual Leadership and Growth Summits and serves on several boards including chairman of The Riordan Clinic and the newly launched Geoversity. He is an investor in many scale-ups. A father of four, he enjoys piano, tennis, and magic as a card-carrying member of the International Brotherhood of Magicians.