Are you interested in developing yourself, your team, your department, or your organization effectively? Arrange a free consultation with us in the online dialog. We will discuss the specific challenges in your organization and you will receive a concrete and free proposal on how to achieve your goals.

Sustainability is not just about protecting the environment or climate. It is also about social justice, cultural change, integrity, economic efficiency, lifestyle, and social engagement. Whether it’s climate change, resource scarcity, or global collaboration, we are currently facing major directional decisions regarding ecology, economics, and social issues. Organizations are not unaffected.

Many of the established criteria that organizations have used to make successful decisions for decades are now outdated: With changing social awareness, which is increasingly focusing on ecological and social issues, changes in the market and the associated changes in the legal framework, the demands on organizations are changing and require a rethink to ensure their future viability. Organizations need answers to these changes, which must also find acceptance among their relevant stakeholders.

This does not mean that organizations should chase after every short-lived trend. What is needed, however, are clever observation and evaluation routines and criteria in order to anticipate relevant changes such as the current need for more climate protection and social justice at an early stage and to be able to draw the right conclusions from them for the organization.

“Many of the established criteria that organizations used to make successful decisions for decades are now outdated. Organizations need answers to these changes, which must also find acceptance among their relevant stakeholders.”

Exactly. When the economic, ecological, social, cultural, and health-related framework conditions change, this has a significant impact on everyone who moves under these conditions. We are currently in a so-called transition phase, i.e. a comprehensive change of the socio-technical system, which is brought about by mutually influencing changes that build on each other. Climate change, digitalization, demographic change, resource scarcity, energy transition, growing social inequality, and, last but not least, pandemics – the interlocking of these developments creates pressure to act and leads to a changed world view in many areas. These developments must be recognized with foresight and incorporated into strategic work. Companies are challenged to decide how they want to position themselves ecologically, socially and value-oriented – “ducking out” of taking responsibility will not go unpunished.

With the Green Deal adopted in December 2019, the European Commission has also set ambitious climate and environmental protection targets in the EU, which have a significant impact on the economy.

We have reached a phase in which governments around the world are increasingly recognizing that yesterday’s climate commitments require consistent action today and are willing to invest enormous resources in implementing them. At the same time, environmental awareness is increasing among the population: global social and political pressure is growing.

This example allows us to observe well the interdependencies of the different meta-levels in the transition process: The societal and ecological framework conditions, the so-called landscape level, the established structures, i.e. the regime level, and the innovations and changes that emerge in the so-called niches have a reciprocal effect on each other. In observation, it is often difficult to say what the original trigger of a transition is based on – the classic chicken-and-egg problem.

The EU Commission and other governments have now begun to implement their Green Deal commitments, setting in motion further regime-level changes that will impact existing structures – these legislative measures will be a driver for change. Sustainable niche innovations that have so far served only small markets or are not yet fully mature may increasingly gain social and economic acceptance and will replace established products, processes, technologies and business models in whole or in part.

The pricing of CO₂, for example, has led in many places in recent years to coal-fired power, which is particularly harmful to the climate, becoming uneconomical and alternative energy sources and technologies being preferred. If markets and governments change, innovations and sustainable concepts such as car sharing, recyclable materials and climate-neutral production processes can gain in importance and drive the transition process forward.

The global community has reached a crucial point in realizing the Sustainable Development Goals. After China has long ignored calls to participate in global climate protection, Chinese President Xi Jinping recently announced that in the future he would halt investments in coal-fired power abroad and provide greater support to developing countries in the expansion of green energies. China has recognized that it must change in order to maintain or expand political and social acceptance for Chinese products in the global community in the future. In addition, the country itself will have to struggle massively with the consequences of global warming. Recent examples show us that China’s ambitions should be taken seriously: China is the world’s largest market for electromobility and is experiencing significant growth in renewable energies, such as solar and wind power.

China’s decision to make its own economy climate-neutral by 2060 is of enormous significance for global climate protection, because the Chinese state is considered the world’s largest emitter of greenhouse gases; coal-fired power continues to be the most important source of energy there. In order to achieve the goal it has set itself, China will have to reform its entire energy supply and reorganize its economic structure within a few years. As a result, China will have a major influence on the entire technological development and the global economy, as we can assume that the Chinese government will do everything in its power to achieve the goals it has set.

“China’s path to achieving climate neutrality will have a significant impact on technological development and the entire global economy.”

If companies that are successful under the paradigms still in place today continue to turn a blind eye to these global developments, they may no longer be able to meet legal and social expectations and requirements – and thus no longer offer any benefit to society and disappear from the market. In view of these decisive changes, it is essential for companies to act with foresight and anticipate regulations at an early stage.

The central questions are: What developments are emerging in terms of worldview, economy, ecology, technology, society, culture, and health? Where do we see the potential for significant changes that are difficult to predict?

Sustainability and corporate responsibility with regard to ecology and society are therefore no longer just image-building measures, but ensure the necessary political and social acceptance of the company in its relevant environments. Legal regulations will also place stricter requirements on corporate responsibility in the future. It will thus become an integral part of a company’s strategic positioning. With our revised “Strategy Map for Sustainable Corporate Development”, we meet this need and enable our clients to incorporate ecological and socio-economic aspects into their strategic work in a forward-looking and direct manner.

We enable you to initiate sustainable structural change and successfully position your organization in the “Circular Economy” and empower it for ongoing further self-renewal.

We would be happy to present the further developed Strategy Map to you in a personal online dialog and explain possible areas of application as well as our approach to working with the Strategy Map for sustainable corporate development.

Book Online Dialog

E/D/E, in particular Dr. Andreas Trautwein, had recognized that there was a need for change in order to prepare E/D/E and the entire group for the future from a position of strength – this was the starting signal for EVOLUTION. One of the key triggers at the time was the perceived difficulty of the organization in managing growth. If market conditions change, this not only requires companies to realign their strategy – the corporate culture must also accompany the change.

Corporate culture includes values, expectations, behavior patterns, and rules by which people act. This has a major impact on decision-making processes and on the way people interact with each other. Culture makes a significant contribution to the identity of the company and cannot be changed at the push of a button or by resolution. As a first step, we jointly conducted a comprehensive culture survey in the E/D/E Group in spring 2016. E/D/E had to find out for itself: What makes the E/D/E tick? What makes it strong, what inhibits it? What are the success factors for the future? What are the needs for change?

“If sustainable change is to take place, it must always come from within, that is, from within the organization.”

As systemic organizational consultants, we do not view companies as machines with simple cause-effect relationships, but rather as complex social systems that are determined by their internal network of relationships. By their very nature, they are designed to maintain a high degree of internal stability. This is necessary in order to remain capable of acting even in turbulent times. This organizational stability cannot be worked on from the outside.

If sustainable change is to take place, it must always come from within. As external parties, we can only influence this indirectly. For this purpose, we design suitable interventions, combined with impulses that make a relevant difference to the status quo and take into account the specific circumstances of the company. Often, massive interventions are needed to adapt structures and routines that have been developed over years. These adjustments must be made with foresight so that the organization remains capable of responding to the changes and sometimes disruptive developments taking place in its relevant environments.

I have to elaborate a little on this.

We do not offer an off-the-shelf solution, nor are we the experts who want to explain E/D/E’s business. We know that the majority of what the E/D/E needs to secure its future viability already exists within the E/D/E. Our approach allows us to combine the existing knowledge, experience, and perspectives with our consultant expertise and other external input. In this way, we reduce blind spots and open up completely new and different option spaces that were not there before. This is where the new emerges that did not exist before.

“IF THE EVALUATION AND SELECTION CRITERIA IN THE SELECTION PROCESS ARE NOT QUESTIONED CRITICALLY ENOUGH, AN ORGANIZATION RUNS THE RISK OF REVERTING TO FAMILIAR SOLUTIONS AND ULTIMATELY NOT CHANGING ANYTHING, DESPITE HAVING WORKED OUT VARIATIONS IN THE OPTIONS.”

When selecting options, we pay particular attention to the evaluation and selection criteria. If these are not questioned critically enough in the selection process, an organization runs the risk of reverting to familiar solutions despite having worked out variations in the options and ultimately not changing anything. This selection process is extremely demanding and requires the courage and farsightedness of the decision-makers to also be able to allow for something new – both of which E/D/E has proven time and again in our cooperation.

Far-reaching changes such as those brought about by EVOLUTION can only be implemented effectively if different perspectives are taken into account in the change process simultaneously. We call this the 3rd mode of consulting, which means that we not only consider the factual dimension, but also the process and social dimension at the same time. Particularly in complex organizations such as E/D/E, it is essential to constantly reflect on what has happened and to incorporate the insights gained into the next steps – in other words, to keep the process adaptive. A linear approach is unsuitable for achieving the desired effect. Without this attitude, there could have been no fit between the E/D/E and the consultation. An “E/D/E solution” was needed and we found it together.

In the past, strategic decisions usually took place behind closed doors. Within the framework of EVOLUTION, E/D/E has taken a completely new approach and has relied on broad participation within the management system in its strategy work, which has led to a high quality of implementation of the organizational changes. The ability to cooperate across departments has also developed significantly and there is a culture of open communication. In my opinion, this change is reflected in the cooperation with partners: knowledge is shared, solutions are developed jointly, and strengths are bundled. This is the basis for successful collaboration within the network.

At the beginning of a far-reaching transformation process such as EVOLUTION, the need for change must be communicated in such a comprehensible way that the organization accepts it and is prepared to go along the way. After all – we should not fool ourselves here – a change process of this kind is a major feat for the entire organization. The next step is to develop an attractive outlook for the future, one that makes the coming efforts worthwhile. Another key success factor is the organization-specific process architecture with concrete measures and a schedule. This ensures that the right key decisions are made in the right order and in the right processing format. In addition, accompanying reflection and communication are indispensable as success factors and control elements.

From the beginning, EVOLUTION has always been about E/D/E, its partners and the performance of the network. The entire change process is tailor-made and individually designed for E/D/E. In the development of the new organizational design, the premise was to preserve what works and to develop custom-fit organizational structures in such a way that they take into account the inherent complexity and the specific logic of E/D/E’s business model. In addition, the perspective of end-to-end consideration of all important value chains was brought to the fore. This was a significant starting point that needs to be further anchored in the ongoing process.

It was also formative that the EVOLUTION process is not set in stone, but is designed to be adaptive. This means that the E/D/E learns to observe beyond the concrete change occasion how it has dealt with change processes so far and whether these established patterns themselves need to be changed and further developed. Thus, if decided interventions do not achieve the intended effect, the change is modified in the ongoing process. All collected findings are integrated into the respective next steps. Therefore, among other things, the EVOLUTION process architecture has been regularly reflected upon and permanently developed over the past years.

A very decisive one! Their market requirements and expectations were made the central issue in many phases of the change process. The system intelligence available within the group was and is an important influencing factor.

The willingness of members and cooperation partners to contribute to the process and invest a great deal of time in doing so, especially in the context of the innovative stakeholder analysis (ISA), has, in my perception, been perceived in E/D/E as a great appreciation. In turn, E/D/E has systematically shared the insights and analysis and ultimately implemented structural changes that result in better market performance. In its new setup, E/D/E has become much closer to the market and to its partners, much faster and more digital. This has been demonstrated not least in dealing with the Corona pandemic.

Throughout the entire process, I have noticed a high level of commitment and personal dedication from all those involved in the various committees and teams. Important key players were ready to dare something new, to support EVOLUTION, and to invest time and vital energy in this.

Throughout the entire change process, we perceive a high degree of reliability in the cooperation within the management system. With the anchoring of the reorganization, E/D/E has achieved a new quality in member management and there is noticeable progress in cooperative interaction internally and externally and at all levels.

E/D/E is undergoing a profound transformation process against the backdrop of an increasingly digitized world characterized by disruptive changes. The outside-in perspective, i.e. the needs of the partners in the E/D/E group, and the end-to-end view of the value chains are essential elements of the process. The use of the system intelligence of the E/D/E group as well as the high level of commitment of the management, important key players, and the employees form an essential resource for not only starting such a long-term transformation process but also successfully continuing it. From the very beginning, the focus was on continuously expanding the performance and future viability of E/D/E group for the benefit of its members, cooperation partners, and suppliers.

(Quelle: www.ede.de)

The DVV Group was strongly conditioned by previous restructuring programs to reduce costs. In the meantime, the Group has very successfully positioned itself so that it is on a solid footing as far as the financial perspective is concerned. The structures and routines that had been in place for decades were strongly influenced by the monopoly position that had been created historically. A key question we faced was: How does the Group intend to exploit the identified opportunities for new business in order to at least offset, if not overcompensate for, future revenue losses from its core business?

In the first step, in the initial situation, it is important to determine what kind of change is involved. DVVision has a different objective and logic than the already successfully completed restructuring programs. We would describe DVVision as a third-order change. This type of change is fundamentally different in its logic from a restructuring program, where the objective is to sustainably rid the company of “bad costs”.

“While restructuring and reorganization are about cutting out what is not value-adding, in a third-order change we focus on how future value creation will take place and what conditions need to be created for this to happen.”

Third-order change is about using strategic positioning and appropriate structures to keep the company competitive in the market and generate new business in the medium and long term. Restructuring and reorganization are about cutting out non-value-adding products, plants, processes, structures, etc. In a third-order change, we focus on the question of how future value creation will take place and what conditions need to be put in place for this. We know that cost-cutting is not a business model in the long term and is not sufficient for expanding a company’s competitiveness. For such a change process to succeed, certain prerequisites must be met.

If the company has recognized that continuing on its present path will sooner or later lead the company into a predicament, a third-order change is called for. For such far-reaching changes, a careful analysis of an organization’s past experience with such “impositions” is required. In the initial situation, therefore, the reason for the change, i.e., the need to be turned around, must be communicated in such a comprehensible way that the organization accepts it and is prepared to go along the way.

The responsibility of DVVision has been declared a matter for the top management – an important prerequisite for the success of a far-reaching transformation process. The executive board, the management, and the employee representatives see the necessity of the program and support DVVision credibly and sustainably. DVVision is designed in such a way that basically all employees can be involved. The necessary transparency about the “what”, “how”, and “when” in the DVVision process is ensured by appropriate change communication.

“DVVision’s responsibility was declared a matter for the top management – an important prerequisite for the success of a far-reaching transformation process.”

According to the understanding of systems theory, we understand organizations as complex social systems. In this sense, organizations do not consist of their individual elements, such as departments and people, but of the relationship of these elements to each other: how the respective departments within the organization work and communicate with each other in order to achieve their goals and the overall goal of the organization – and thus to secure its existence.

In interacting with their environments, organizations perceive only what seems relevant to self-preservation and service delivery. This is necessary to generate stability and to maintain it even in turbulent times – if the organization were to react to every stimulus, to every event from the environment, it would no longer be able to act. Thus, a selection takes place as to which impulses are perceived and processed.

This structural operationally closed process can only be influenced from the outside to a limited extent. For the DVVision process this means that we as consultants can only indirectly influence this process from the outside – only the actors of the organization can change it. For this reason, we provide tailor-made impulses that make a difference compared to today. The DVV employees involved in the process then use these to implement the necessary changes.

“If the organization were to react to every stimulus, to every event from the environment, it would no longer be capable of acting. Thus, there is a selection process taking place regarding which impulses are perceived and processed. “

Basically, it is necessary to develop an attitude that everything we experience and observe in organizations is there for a good reason and that this reason must first be understood. It is necessary to accept that change must always be wanted and implemented from within.

Furthermore, it requires close cooperation between executives, key players, and employees of an organization in order to communicate and act at eye level.

Working groups, which are staffed by DVV representatives and external consultants, are called consulting systems. In these consulting systems, change is initiated by competently and controversially deliberating on issues, processing them, and bringing them to a decision. This is done from a professional and sociological perspective and in the appropriate chronological sequence. If these decisions are then implemented internally by organizational members, the actual change takes place. In order to bring about sustainability, consulting systems are necessary that also include management, so that critical issues and those that may have been taboo in the past can be openly discussed and consulted at eye level.

We have successfully implemented such consultation systems in the DVV Group and we can observe that change is taking place there. Thus, a third-order change becomes possible.

“It is important to accept that change must always be wanted and implemented from within.”

We see three different logics when it comes to change: First-order change is naturally inherent in an organization. Without any intervention, organizations change whether they want to or not. In the fast-moving times in which we live, these evolutionary change processes are usually not sufficient to keep organizations fit for the future.

The result is imbalances that often force owners and management to undertake radical restructuring and turnarounds. We call these change processes second-order changes. Something is cut away, for example by cutting costs, without strategically realigning the organization and implementing the appropriate organizational structure with a corresponding management system.

Whenever, however, an organization sets out to address fundamental changes in its environment, we speak of third-order change. Here, the goal is to initiate a profound change process, using the existing system intelligence, in order to maintain or expand competitiveness. This mode includes a constant reflection of the ongoing change process and ensures that the change is modified if it can be observed that the decided and imposed interventions do not achieve the effect that was intended.

Following the implemented restructuring programs, second-order change, the DVV Group has embarked on third-order change in order to develop into a foresighted organization with DVVision. This implies that, among other things, the process architecture for DVVision, i.e. the way in which change takes place and the associated step sequences, as well as the structure for program control, has been regularly reflected upon and permanently developed over the past months – without any need for justification. In this way, this process is kept adaptive, and necessary structural and procedural changes can be consistently addressed.

Organizations are successful if they are highly responsive to social developments and find valuable solutions to social bottlenecks and needs while offering these solutions at conditions that are considered to be appropriate. Organizations disappear when these needs no longer exist or change and no adequate solutions can be provided for them.

In every crisis, there are winners and losers. The winners often include entrepreneurs with innovative ideas that they can quickly put into practice. These are not always solely large corporations.

CONTACT US AND LEARN MORE ABOUT THE CONCEPT FOR AN EFFECTIVE STRATEGY REVIEW TAKING INTO ACCOUNT THE CURRENT CHALLENGES POSED BY THE CORONA PANDEMIC AND FIND OUT MORE ABOUT THE SERVICE PORTFOLIO OF THE SYSTEMIC ORGANIZATIONAL CONSULTANCY transformis®.