DeteconManagementReportblue•2014
Transformation &
People Management
www.detecon-dmr.com
DMRDetecon
Management Report
2014
...
1 Detecon Management Report blue • 2014
Dear Readers,
Many companies find themselves trying to deal with a market environm...
2 Detecon Management Report blue • 2014
Content Leadership in the 21st
Century
How Are Executives Responding to the
New Re...
3 Detecon Management Report blue • 2014
Interview with Volker-Gerd Westphal and Thorsten Scharf
from the Ministry of the I...
4 Detecon Management Report blue • 2014
Leaders have a major role to play during transformation and the realization of cor...
5 Detecon Management Report blue • 2014
the ­company is taking. This is yet another situation in which
leaders must serve ...
6 Detecon Management Report blue • 2014
Short product life cycles, complex
­markets, and a declining half-life value
for k...
7 Detecon Management Report blue • 2014
	 ne of the new trends in the field of management respon-
sibility is “shared lead...
8 Detecon Management Report blue • 2014
On the Importance of
Intercultural Skills in the
Context of Global Leadership
Inte...
9 Detecon Management Report blue • 2014
The second characteristic is so-called self-leadership, the op-
timal ability to a...
10 Detecon Management Report blue • 2014
Dr. Fanchen Meng is a partner
at Heidrick & Struggles in Paris,
a ­leading execut...
11 Detecon Management Report blue • 2014
DMR: The subject of intercultural skills is very exciting and a new
challenge in ...
Global
				 Lead
12 Detecon Management Report blue • 2014
DMR: It has also been our experience on many occasions that
the ...
dership
13 Detecon Management Report blue • 2014
capital is available. If European companies want to grow in the
Asian env...
14 Detecon Management Report blue • 2014
Intercultural cooperation is not a management
buzzword for Georg Habenicht, Vice ...
15 Detecon Management Report blue • 2014
	 MR: Mr. Habenicht, let’s start with a question about your du-
ties and responsi...
16 Detecon Management Report blue • 2014
Georg Habenicht is an architect and has a
Master’s degree in Environmental Planni...
17 Detecon Management Report blue • 2014
The two cultures also differ clearly when it comes to the style of
communication....
18 Detecon Management Report blue • 2014
19 Detecon Management Report blue • 2014
There is a punching bag hanging in a small coffee lounge on the third floor of th...
20 Detecon Management Report blue • 2014
	 ew factors demand a transformation of the working worlds.
In view of the techni...
And what comes next?
Detecon is not alone; other companies have implemented parts
of the smart working concept as well. In...
22 Detecon Management Report blue • 2014
Transformation Culture
On Course
to an Innovative
and Agile Company
Companies, es...
23 Detecon Management Report blue • 2014
	 s anyone can see today, current trends such as globali-
zation and demographic ...
24 Detecon Management Report blue • 2014
Our
Approach is
Self-Empowerment
Reza Moussavian
Vice President Group Transformat...
25 Detecon Management Report blue • 2014
	 MR: What was the baseline and motivation for the establish-
ment of a separate ...
26 Detecon Management Report blue • 2014
27 Detecon Management Report blue • 2014
Finally, we would like to empower the transformation mana-
gers and use them for ...
28 Detecon Management Report blue • 2014
grounds, business departments, and skills backgrounds. For
­instance, there was n...
29 Detecon Management Report blue • 2014
Magenta MOOC – a completely new way for employees to
­collaborate on an interdisc...
30 Detecon Management Report blue • 2014
	 he term “intrapreneurship” is popping up with greater
­frequencyduringdiscussio...
31 Detecon Management Report blue • 2014
and agile organizational structures that inspire creativity and
can deal with set...
32 Detecon Management Report blue • 2014
A Sustainable
Transformation Program
Strengthens Competitiveness
A dynamic market...
33 Detecon Management Report blue • 2014
	 MR: E.ON 2.0 is probably the most extensive transformation
program ever underta...
34 Detecon Management Report blue • 2014
Michael Kamsteeg has held various commercial positions in the E.ON
corporate grou...
35 Detecon Management Report blue • 2014
project managers and the officers in charge of the actions. After
the initial pro...
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)
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BEST-PRACTICE TRANSFORMATION & PEOPLEMANAGEMENT - FOKUS: GLOBAL LEADERSHIP

Many companies find themselves trying to deal with a market environment of overwhelming
complexity and maximum dynamics, moving at such a velocity that rigid local large corporate
structures and hierarchical “command and control” management methods cannot keep pace.
Established companies are being shunted to the side more and more often. Enterprises designed
to focus on constantly increasing efficiency are losing ground in competition with innovative
startups or are disappearing completely from the radar screen. This is primarily a cultural rather
than a strategic problem. A well-known Stanford professor once said: “Corporate culture without
strategy is meaningless. And a strategy without corporate culture is powerless.”
So what ingredients do companies, especially their management, need to secure their success in
the future? What can be done to ensure that transformation and innovation capability become
firmly established in the corporate culture, the cultural DNA? And what are the features of successful
transformation programs and their orientation in which efficiency and innovation are not
mutually exclusive?
In our search for the answers to these questions, we initiated dialogs with transformation experts
from various enterprises, seeking to determine the common success factors and lessons learned
which would enable us to present a range of examples showing how transformation competence
can be anchored in a company – whether in the form of transformation programs such as those at
E.ON or of a separate unit like “Group Transformation Change” at Deutsche Telekom AG. Our
special attention was devoted to the new, intercultural challenges which the leaders must confront
head-on in these novel and agile structures. For instance, we cast an intense spotlight on the
cultural
differences between the Asian and European regions and went into especially deep detail
while examining the European differences between France and Germany. As we did so, it was
important
to us to differentiate in our perspective and to see cultural differences as strengths and
enrichment – far removed from any classic stereotypes. Taking as our model diversity
management
at Otto Group, we show how the created diversity (which is not restricted to the single criterion
of
the various nationalities) can be exploited and steered. We describe the tried and tested method of
“organizational energy”, which reveals toxic and corrosive developments in companies, as a means
of making cultural changes and transformation requirements visible.
Come along with us on our “transformation journey” as we explore global leadership, cultural
change, and transformation best practice! I trust you will find inspiration as you read these articles
and wish you the best of success in applying what you learn from them!

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DMR BLUE TRANSFORMATION & PEOPLEMANAGEMENT (FOKUS: GLOBAL LEADERSHIP)

  1. 1. DeteconManagementReportblue•2014 Transformation & People Management www.detecon-dmr.com DMRDetecon Management Report 2014 blue Special Various artists have taken a fresh approach to the interpretation of our fields and made major contributions to the design of our new Web site. Pay us a visit at www.detecon.com We have provided a public stage for art. The new Detecon Web site is online! Art meets Consulting Detecon’s business fields put us right in the middle of one of the most exciting sea changes of our time: the networking of global information and communications. Interviews with Michael Kamsteeg, E.ON : A Sustainable Transformation Program Strengthens Competitiveness Dr. Fanchen Meng, Heidrick & Struggles : On the Importance of Intercultural Skills in the Context of Global Leadership Dr. Leena Pundt, Otto Group : Diversity Management – a Catalyst for Economic Success Georg Habenicht, BuyIn : „There is No Equivalent to Paris in Germany“ Reza Moussavian, Deutsche Telekom AG : „Our Approach is Self-Empowerment“
  2. 2. 1 Detecon Management Report blue • 2014 Dear Readers, Many companies find themselves trying to deal with a market environment of overwhelming complexity and maximum dynamics, moving at such a velocity that rigid local large corporate structures and hierarchical “command and control” management methods cannot keep pace. Established companies are being shunted to the side more and more often. Enterprises designed to focus on constantly increasing efficiency are losing ground in competition with innovative startups or are disappearing completely from the radar screen. This is primarily a cultural rather than a strategic problem. A well-known Stanford professor once said: “Corporate culture without strategy is meaningless. And a strategy without corporate culture is powerless.” So what ingredients do companies, especially their management, need to secure their success in the future? What can be done to ensure that transformation and innovation capability become firmly established in the corporate culture, the cultural DNA? And what are the features of suc- cessful transformation programs and their orientation in which efficiency and innovation are not mutually exclusive? In our search for the answers to these questions, we initiated dialogs with transformation experts from various enterprises, seeking to determine the common success factors and lessons learned which would enable us to present a range of examples showing how transformation competence can be anchored in a company – whether in the form of transformation programs such as those at E.ON or of a separate unit like “Group Transformation Change” at Deutsche Telekom AG. Our special attention was devoted to the new, intercultural challenges which the leaders must confront head-on in these novel and agile structures. For instance, we cast an intense spotlight on the ­cultural differences between the Asian and European regions and went into especially deep detail while examining the European differences between France and Germany. As we did so, it was ­important to us to differentiate in our perspective and to see cultural differences as strengths and enrichment – far removed from any classic stereotypes.Taking as our model ­diversity ­management at Otto Group, we show how the created diversity (which is not restricted to the single ­criterion of the various nationalities) can be exploited and steered. We describe the tried and tested method of “organizational energy”, which reveals toxic and corrosive developments in companies, as a means of making cultural changes and transformation requirements visible. Come along with us on our “transformation journey” as we explore global leadership, cultural change, and transformation best practice! I trust you will find inspiration as you read these articles and wish you the best of success in applying what you learn from them! Marc Wagner Partner Global Lead Transformation, People Management & Integral Business Transformation & People Management
  3. 3. 2 Detecon Management Report blue • 2014 Content Leadership in the 21st Century How Are Executives Responding to the New Requirements? 4 Shared Leadership Do We Need a New Leadership Paradigm? 6 Interview with Dr. Fanchen Meng, Partner at Heidrick & Struggles On the Importance of Intercultural Skills in the Context of Global Leadership 8 Interview with Georg Habenicht, Vice President Procurement Academy, Culture and Change, BuyIn „There is No Equivalent to Paris in Germany“ 14 Smart Working@Detecon Why Is There a Punching Bag Hanging in the Coffee Lounge? 18 Transformation Culture On Course to an Innovative and Agile Company 22 Interview with Reza Moussavian, Vice President Group Transformational Change, Deutsche Telekom AG „Our Approach is Self-Empowerment“ 24 Intrapreneurship Innovation – a Core Element of Corporate Culture 30 Interview with Michael Kamsteeg, Director of the E.ON 2.0 cost reduction and restructuring program A Sustainable Transformation Program Strengthens Competitiveness 32 Editor: Detecon International GmbH Sternengasse 14-16 50676 Köln Germany www.detecon.com DMR@detecon.com Masthead: Supervisory Board: Thilo Kusch (Chairman) Executive Board: Francis Deprez (CEO) Dr. Jens Nebendahl Local Court Cologne HRB 76144 Registered Office: Cologne Printing: Kristandt GmbH&Co.KG Frankfurt/Main Photos: Fotolia iStockphoto
  4. 4. 3 Detecon Management Report blue • 2014 Interview with Volker-Gerd Westphal and Thorsten Scharf from the Ministry of the Interior of the State of Brandenburg Restructuring and Transformation in the Public Sector: Challenges, Potential, and Trends in the Modernization of Public Administration 36 Pro bono Project Geekettes Boost Female Tech Community! 40 Interview with Dr. Leena Pundt, Otto Group Diversity Management – a Catalyst for Economic Success 42 Leadership in a State of Transformation Money Is Not Everything – Three Theses on the Subject of Leading Generation Y 48 Sustainability Performance Management Integration and Management of Sustainability in a Corporate Context 54 Transformation Journey About the Paradigm Shift in Working and The Tale of Change and Transformation 56 Organizational Energy A human energy and leadership capability view on transforming organizations 62 The Authors 68
  5. 5. 4 Detecon Management Report blue • 2014 Leaders have a major role to play during transformation and the realization of corporate cultures. We have collected innovative examples of actions that strengthen culture during interviews with representatives from leading DAX companies. The shift in focus to the employee and the team is accelerating. A How Are Executives Responding to the New Requirements? lot is expected of today’s executives. Leadership can no ­longer be narrowly defined as synonymous with management; it must ultimately inspire and foster employees so that they also take a part in shaping the company’s future. Leaders should convey a culture, not just business figures, and should do so as far as possible in harmony with the divergent expectations of five different generations. Leaders will not focus exclusively on processes, strategic goals, far-sighted planning, and ­budgeting, even though these aspects ensure that a company operates well. They must go above and beyond these duties to instill a vision in ­employees, to show support and interest in others, to motivate, to provide a sense of purpose, to create teams and coalitions, to offer trust and empathy. The ideal executive has – ­metaphorically speaking – two cords hanging from the ceiling in his/her office: one for manager, one for leadership capabilities. Keeping the system in balance requires the leaders to pull on both cords. Changed team structures In the opinion of HR experts and executives from ­various ­companies whom we surveyed last fall, the most dramatic changes are in team structures.* There are virtually no ­executives managing self-contained areas. The employees are scattered among different rooms, departments, states, across Europe, even around the world, and the team’s make-up is ­increasingly ­heterogeneous. The spatial distance frequently means that team leadership is possible only in virtual form. In view of these kinds of conditions, it is important for executives to clarify the ­areas of responsibility unambiguously, to develop an eye for the big picture, and to listen closely to employees. They must be able to ­recognize problems at an early stage and to respond ­appropriately. “A good executive gives tips, challenges, allows mistakes to a certain degree and tolerates them if people are open and honest in dealing with them.” Vice President Project Controlling, DAX 30 Corporation The required foundation is the appropriate error culture. Can conflicts be addressed frankly? How are conflicts resolved? Most HR experts recommend off-site meetings as a way to gain ­distance. Sometimes the spatial circumstances can make the ­decisive difference for frank resolution of conflicts. The same is true of team events. A team can grow together in a completely different way when taken outside the corporate context. Constant change makes it is especially important to bridge ­phases when the team does not know exactly what the final ­direction will be and tremendous uncertainty is dominant. Everyone, both employees and executives, must demonstrate flexibility in their thinking processes. In the future, the role of executive will be played less often by line supervisors; they will be replaced by project managers who are able to give up power and who no longer interpret their position as a status symbol. Leaders are the driving forces behind transformation Carrying out transformations to their final results is not an easy task. It demands a leader who embodies the necessity and ­relevance of a change. If the transformation process is to move ahead, a strong leadership network and respect for the involved people is essential; but above all, there must be an ­unambiguous and clearly communicated vision so that emplo- yees can see ­exactly – and above all, understand – what direction Leadership in the 21st Century * In compliance with data protection laws, the results are shown in anonymized form.
  6. 6. 5 Detecon Management Report blue • 2014 the ­company is taking. This is yet another situation in which leaders must serve as role models so that they can secure a higher level of acceptance among employees for change and reorgani- zation activities. At the end of the day, the transformation can be ­firmly anchored in the corporate culture only through leader- ship and its exemplary conduct. Relevance of the corporate culture and the key role of the leaders Corporate cultures – if properly defined – can facilitate both change and transformation. Leaders have here a decisive role in that they exert a multiplier effect in disseminating a living corporate culture. They can support the reinforcement of new approaches, values, convictions in a culture, develop and com- municate a vision; it becomes simpler to remove obstacles from the path and goals can be planned and achieved more quickly. As they represent the core of the corporate culture, they can put their very special stamp on it in a way that the employees alone would not accomplish. Follow words with deeds Almost every company today has its guiding principles which also encompass the subject of leadership. They are presented with great pride and solemnity, but implementing them often runs into trouble. If everyone is to stand behind the guidelines, they should be drawn up by representatives of all of the ­involved parties whenever possible. Good leadership should not be defined solely in top-down terms, but should equally include bottom-up perspectives. Moreover, actually living these resolu- tions is imperative. Leaders are the ones who set a good example by taking the first step, bearing the torch, and their communi- cation is not just with words, but with the deeds that follow. “Example is not the main thing in influencing others. It is the only thing.” Albert Schweitzer Leaders must put employees at the center In the course of the interviews with our partners from ­various companies, we were able to gather innovative examples of ­actions to strengthen culture. It has become clear that there is an accelerating shift of the focal point to employees. Leadership training programs are not really anything new, but their benefits appear to be significantly greater when leaders and their employees participate in the leadership training pro- gram together. Leadership without employees is not possible, but, astoundingly, they are integrated far too rarely. Leaders should not attempt to be the best themselves, but should have the ­objective of making others the best. Moreover, they should concentrate much more on strengthening the strengths and not on strengthening the weaknesses. Corporate guidelines can be a lot more than simply guidance for the entire company; they can also serve as measurement factors. The payment of variable salary components can be made depen- dent on the degree to which an executive respects the company’s values. Take feedback seriously Moreover, the employees should be given the opportunity to provide feedback to their managers describing how satisfied or encouraged they feel. Is a CEO democratically elected by the employees a model for the future? The CEO of one DAX company is keenly aware of how rele- vant the regular interaction with the employees is. He regularly invites a group of selected employees from all levels to breakfast and asks them specifically: “What gets on your nerves? Where can we improve?” But leaders must also be able to deal with the answers they receive from the employees – first of all, by not becoming defensive, and second, by unambiguously taking them to heart. The flattening of hierarchies can also be helpful. All academic titles are done away with in internal communication; ­everyone, whether at employee or management level, uses the ­familiar form of address. Ways of thinking that focus on rankings ­decline, and the related obstacles – which should not be ­underestimated – are torn down. All in all, leaders in the 21st century must fulfill an incredibly broad range of requirements. Their success will be contingent on them putting their employees – not themselves! – at the cen- ter of attention and on communicating the right culture. Above all, they must themselves embody this culture in their actions and serve as a role model at all times.
  7. 7. 6 Detecon Management Report blue • 2014 Short product life cycles, complex ­markets, and a declining half-life value for knowledge demand more than just the transformation of the ­familiar ­working environment. The scope of change involves nothing less than a re-interpretation of management tasks and an understanding of this role in keeping with the times. While it inevitably brings with it a rethinking of our work culture, the most significant impact will come from the shift in the traditional, vertical management style. Shared Leadership Do We Need a New Leadership Paradigm?
  8. 8. 7 Detecon Management Report blue • 2014 ne of the new trends in the field of management respon- sibility is “shared leadership”, the distribution of management positions (co-leadership) among a group or individual team members. In the view of pioneers in the field such as Pearce and Conger, the primary reasons for its application include the empowerment of managers, enabling them to concentrate on their specific skills and ability, and the maintenance of short ­decision-making paths and flat hierarchies. The ­broadening of the range of tasks and responsibilities of employees opens up more space during implementation. In particular, the ­assignment of management tasks to employees in close proxi- mity to customers supports a company’s competitiveness in the long run. [Marshall Goldsmith: http://blogs.hbr.org/2010/05/ sharing-leadership-to-maximize/] So organizations can profit from a “diversity of thought” approach to exploit synergies and strengthen entrepreneurial energy. [Science Journal of Psycholo- gy, Is Shared Leadership the New Way of Management?, page 3.] Initial studies indicate that shared leadership approaches also have a greater impact on team performance and productivity than vertical management styles. [Pearce and Sims, 2002; Pearce et al., 2004; Ensley, Hmieleski, & Pearce, 2006] The contrasting model is a multi-layer, hierarchical organizational structure in which top-down regulations are not adequately coordinated with managers and employees, putting them at risk of being out of touch with daily practice. However, the implementation of a shared leadership model can also have inherent challenges for a company. A possible outflow of know-how during the transfer of management ­responsibility and neglect of operational business represent high risk. As a ­corollary, potential conflicts of interest or internal power ­struggles may delay decisions or shift focus from the external market perspective to a purely internal view. The pros and cons of shared leadership must be in ­harmony with the corporate culture and corporate values. This is not a rigid procedural model; it must be adapted to the ­specific ­organizational structures, tasks, and experience. [http://www. huffingtonpost.de/alexandra-hildebrandt/shared-leader- ship-die-zuk_b_4803248.html] In this context, a common ­understanding of goals and cooperation in a spirit of trust are important. Marshall Goldsmith, one of the world’s ­leading O management coaches and authors, describes in the ­Harvard Business Review [Marshall Goldsmith: http://blogs.hbr. org/2010/05/sharing-leadership-to-maximize/] the following factors which must be considered in addition during the imple- mentation of shared leadership: > Assignment of the management authority to the most highly qualified team members as a means of enhancing their capabilities > Precise limits to decision-making authority > Cultivation of a culture in which people feel free to take the initiative > Assignment of discretionary judgment and autonomy to qualified employees over their tasks and resources > No second-guessing of decisions which have been made > Regarding the individual as a resource rather than as a manager > Scheduling of follow-up meetings to review progress and take any corrective measures which are required Shared leadership is a part of modern understanding of ­management which sees management more and more as a task for the team rather than as individual performance. ­Employees are no longer simply the recipients of instructions; they are ­given management authority and develop further into co- entrepreneurs who make the best possible use of available knowledge and skills. [http://www.springerprofessional.de/mit- shared-leadership-besser-fuehren/4921152.html#] During this change and transformation process of collaboration, the clear ­definition and observance of tasks, game rules, and authori- zations is ­essential. In contrast to traditional, vertical line ma- nagement, ­shared leadership offers decisive advantages in terms of handling complexity, promoting talent, and increasing pro- ductivity. In actual practice, however, a combination of the two management approaches within one company, e.g., at the various management levels, is often sensible and even ­necessary. [http://www.wb.besser-entscheiden.org/wp-content/down- loads/entscheiden_im_wechselspiel_profile21.pdf]
  9. 9. 8 Detecon Management Report blue • 2014 On the Importance of Intercultural Skills in the Context of Global Leadership Interview with Dr. Fanchen Meng, Partner at Heidrick & Struggles
  10. 10. 9 Detecon Management Report blue • 2014 The second characteristic is so-called self-leadership, the op- timal ability to adjust flexibly to differing conditions in the ­surrounding environment. There are three essential elements here: the ability to adapt, to adjust to a new environment, both internally and externally, and to different cultures; the emotio- nal ability, which is especially relevant in companies operating on the international stage, that enables a person to fine-tune or change the emotional mood at any time; and the ability for self-development, which is of fundamental significance in an environment which is changing as rapidly as the one that con- fronts us every day. The third characteristic is the highly relevant capability of hand- ling intercultural situations, for which Heidrick & Struggles, for example, has set up its own competence center, the ­“China Desk”, in Europe. In my opinion, this is one of the most im- portant characteristics as more and more companies begin to ­operate globally and investments are being made in the ­global environment. A person working in a French company in ­Paris must understand precisely what opportunities a Chinese or Russian investor can offer. Naturally, this situation presents completely different challenges for the leaders at the top of the pyramid. MR: Thank you for giving us the opportunity to learn from the comprehensive knowledge you have gained from your experience in “global leadership”. We are especially interested in your profound insights into Asian and European cultures. But let us begin with the subject of “leadership” in general. What do you regard as the most important traits for a good manager in the 21st century? And what are the typical characteristics? F. Meng: In my view, there are three characteristics in particular which typify a “good manager”. At the top of the list is a broad ability to learn, so-called “learning agility”. A manager must ­understand the complex global context and be able to draw on the appropriate “best practice” perspectives. I believe in making a distinction among four best practice categories: the internal best practice in a company, the best practice within the industry – e.g., observing where we are not as good as our competitors within our industry – then the overarching best practice, and finally, the anticipated best practice of the future, which is very important. Of course, there is also the matter of customer orien- tation, the clear understanding of internal strengths and weak- nesses, and the knowledge of what contributes to these strengths and weaknesses in what ways. D Executives in globally oriented companies profit from an international career. But the companies themselves can contribute to sharpening the skills of individuals and of the entire team. Dr. Fanchen Meng, partner at Heidrick & ­Struggles, shares his insights into the subject of global ­leadership.
  11. 11. 10 Detecon Management Report blue • 2014 Dr. Fanchen Meng is a partner at Heidrick & Struggles in Paris, a ­leading executive search and ­leadership consulting company. After 13 years of experience as a consultant at A. T. Kearney, Dr. Meng became Senior Vice President at Siemens and in the East/China region, where he had responsibility for 50 companies and 30,000 employees. In addition, he was Group VP and Head of ­Strategy Asia at Lafarge Group.
  12. 12. 11 Detecon Management Report blue • 2014 DMR: The subject of intercultural skills is very exciting and a new challenge in the 21st century because we have a truly globalized world and companies operate on a global scale. How can I acquire intercultural skills? F. Meng: I myself graduated from a top Chinese university. Then I came to Germany, earned a German degree and my doctorate at a highly respected university, and then worked in an interna- tional environment in Germany for decades – in my case, in an American company. This company then sent me back to China to manage its branch offices on location in China. But I was not supposed to limit my activities to working with local ­clients; I was also expected to utilize my international experience so that I could be of service to international clients. People who have pursued this type of career are becoming more and more typical, especially in companies operating internationally. The key point is that, from the corporate and leadership perspective, the people who have pursued an international career must be systematically supported and encouraged and the people who did not gain any international experience during their time at the university must be given the opportunity to systematically acquire international skills. All of this must be incorporated into people’s professional development. This is the challenge facing managers in companies with worldwide operations. DMR: This leads us to the topic of talent management and deve- lopment of managers. Speaking plainly, more must be done to pro- mote international careers. However, we have often seen situations in which employees are sent abroad on assignment, where they hold excellent positions. But when they return, no plans have been made for them to take over a position. In other words, the program is not systematic. After returning to Germany, these people end up on hold in project positions of some kind and are not able to take the next career step. F. Meng: I see the same phenomenon happening a lot in France at the moment. I find it highly regrettable that so many ­people with the talent for top management cannot systematically ­pursue their careers when they return from Asia despite the extensive range of international skills they have acquired and are conse- quently unable to make the desired contribution to increasing growth, shareholder value, and employment. These are typical opportunity costs which companies should keep in mind. This is for me the difference between good and poor management. DMR: Firmly establishing globalization and an international background in leadership structures and the development of ­leaders are tremendously important success factors for any company that wants to maintain its position while operating on a global scale. In your personal view, based on the broad experience you have had, what are the most common mistakes made by managers in the ­international context? F. Meng: One great mistake when it comes to the subject of ­“leadership” is to consider primarily the individual and not the team structure and the related intercultural environment in which a manager must operate. There are plenty of negative ­examples in this respect, especially with regard to compliance with corporate governance and the observance of compliance regulations. For example, top managers from developing coun- tries fall into “compliance traps” here because they have not been introduced systematically to the appropriate customs and structures and have acted as “lone wolves” instead of becoming a part of a team. I have frequently seen European executives ­making the same kind of avoidable blunders when in Asia. Leadership must take place within a team and in consideration of the specific cultural environment – this is the only way to give talent the opportunity to blossom while simultaneously protec- ting people from making the wrong decisions. DMR: Team and the ability to work on a team are important points. What is the challenge in leading teams in an internatio- nal context? And what are the primary factors for creating “high-­ performing teams”? F. Meng: I believe that two skills are needed to accomplish this. First of all, a leader must understand implicitly how to manage different people and their different ways of working as shaped by cultural differences and how to deal with them. ­Second, in my opinion it is of top importance for a manager to ­create the fundamental prerequisites for high-performing teams in the ­sense of general ambient conditions as appropriate to the ­specific business situation, e.g., by setting up flexible incentive systems. This is frequently much more easily said than done. I think back to my move from A. T. Kearney to Siemens, for ­instance. Siemens recruited me with five members of a team from A. T. Kearney. The difficulty was to integrate this small team into the huge team at Siemens. My supervisor at that time was highly successful in his management of the situation. ­Making use of the subject of the cultural background alone is not sufficient; it must also include embedding in the corporate cultures and corporate processes.
  13. 13. Global Lead 12 Detecon Management Report blue • 2014 DMR: It has also been our experience on many occasions that the cultural backgrounds themselves do not present the greatest ­obstacles; issues arise much more frequently as a consequence of the backgrounds in corporate cultures. You have been active in business in many different countries and are still active today, especially in Germany, China, and France. What differences do you see between these three cultural areas? F. Meng: This is an exceedingly complex question. French ­management culture is highly elitist. Elitist here means that the people who really make to the top have all attended certain grandes écoles [universities] and are united by a common acade- mic path. These people have often worked in certain positions in government as well and moved from there into the business world. You seldom find people in this group who come from “normal” circumstances, who attended a regular university, and then worked their way up. These are rare and exceptional cases in France. My experience in Germany has been that a top mana- ger can normally look back on twenty to thirty years of profes- sional experience and has frequently specialized in specific areas of expertise. The situation in Germany appears to be less elitist to me. When French and Germans cooperate in a joint venture, all of the managers could be French and all of the experts could be German after five years. This is a typical phenomenon which you will frequently observe. DMR: So you would say that a career such as that of René ­Obermann – who dropped out of the university, became self-­ employed, later joined Deutsche Telekom and rose to the position of CEO in this company – would not be possible in France because he was not an inside member of these elite groups. F. Meng: Exactly. I will not say it is impossible – exceptions always prove the rule – but it is a very rare occurrence. If we now look at the recent developments in Chinese management culture, we see that it is still strongly influenced by the founding generation, just as could be seen at the start of the Industrial Re- volution in America and Europe. Top managers in China can be classified in one of two categories. The first category ­includes the “self-made” type of entrepreneur, the “self-made man” who, be- cause he has certain entrepreneurial talents and does not hesitate to seize opportunities as they present themselves, has become extremely successful. DMR: We frequently read that these people have often been very active in the party, have little education, and come from a rural background. F. Meng: No, this perception is distorted. Many of them were once government employees, or they come from families who belong to the elite class. Moreover, it is almost impossible in China to live the American Dream as extolled in the USA. The second category in which top managers in China can be clas- sified consists of civil servants who administrate government- owned businesses and who have proven their management skills over the course of their careers. They place a really high value on specialization and obtaining a high level of qualifications. These are the two types you frequently encounter in China. Their backgrounds might appear to make them different from the German or French managers we are familiar with. But the mentality of the people who are successful here and the rela- ted modesty is comparable with that of the German generation from the period of promoterism. DMR: So you believe that behavior patterns and virtues are shaped less by culture and are more a result of the phase or era in which the economic system currently finds itself. F. Meng: Yes, exactly. DMR: It will be fascinating to observe the development of the next generation, the children of the founder generation. Will they ­display behavior patterns similar to those we are experiencing in the ­Western world, or will this development be different because the cultural background determines a different direction? F. Meng: We should not allow our judgment to be clouded by emotions and must clearly recognize that mastery of the ­further developments by the business and political elite presents a ­greater challenge for our society than was the case in Germany at that time. Why? Because China and Chinese companies are in competition with companies from the Western world which essentially have a maturing process of more than a century un- der their belts. I see two trends coming together. One is that Chinese companies are pushing deeper and deeper into the Western world, and this has consequences for the management levels. Western companies must prepare to deal with this by learning, for instance, how to establish partnerships with these companies. The other trend is that Western companies still find it difficult to exploit the opportunities offered by Asian growth to their own advantage. The Asian growth market differs from other growth markets such as Africa or the Middle East as well as from the historical markets in Europe in two fundamental aspects. First, the Asians themselves have a large class of entre- preneurs, meaning that there are today, and always have been in history, large numbers of entrepreneurs. Second, the Asians are very thrifty, especially the Japanese, which is why ­adequate
  14. 14. dership 13 Detecon Management Report blue • 2014 capital is available. If European companies want to grow in the Asian environment, the next step will be to join forces with local entrepreneurs and local capital. These are the two trends which will decide the future success of European firms. The French tourism company Club Med is one example of success. It ­succeeded in pulling ahead of TUI, its largest German com- petitor, after the large Chinese corporation Fosun invested in it. This is an issue to which European companies will have to devote ­plenty of attention in the coming decades, and it is the point where the winners will be separated from the losers. DMR: This can also appear to be an enormous threat. Your thesis is that the Asians do not need any capital because they have plenty themselves, and they also have the entrepreneurial spirit and know- how they need. The level of education and the number of graduates, particularly in China, has leapt upward in recent decades, and the quality of education has kept pace with this quantity. Europeans must now ask themselves what USPs they can offer to set their busi- nesses apart from that of the Asians. For all practical purposes, there are none. The future trend will be almost certainly be more in the direction you have described: Asians will use their capital to buy into European corporations and gain influence over the European markets. F. Meng: This is not solely a threat. On the Asian side, we find low-cost manufacturing and available capital while on the ­European side we have major brands and high quality. If these two sides can be combined, new markets can be opened up. This is very easy to see when we look at the best practice ­example of Club Med. Club Med was on the verge of ­bankruptcy. When the Chinese investors came on board, the company suddenly had the capital it needed to expand on the Asian markets, ­especially in China. It no longer needs any cash flow in this ­region because it is able to realize a franchise model as a ­means of achieving growth. At the same time, the available cash flow can be put into the development of the North American markets. When the Chinese investor entered the picture, the company was sud- denly able to pursue a completely different business model. That is the description of this partnership – it is not solely a threat. A threat exists only if people do not know how they can turn the opportunities to their own advantage. DMR: So what seems to be a threat turns into a win-win situa- tion within a relatively short time. The Asians provide the capital, market access, and favorable cost structures; the European providers supply the brand name and the quality. This is particularly relevant when a European brand in the automotive or technology sectors has a different image from an Asian brand. F. Meng: Yes, and the European side has a further advantage in the form of their established management structures and their many years of experience with management systems. This must not be underestimated. The Asian companies can take a lesson from their European counterparts in this respect. DMR: This brings us back to the subject of intercultural skills. If, for example, a French company joins forces with a Chinese business, both managers, both management structures, both team structures must have precisely these intercultural skills if the joint venture or partnership is to be successful. Without these skills, the business will no longer function. F. Meng: Yes, exactly. DMR: As part of a leadership study at Heidrick & Struggles, you took an in-depth look at the subjects related to talent management and leadership culture in a growth scenario. What are the most important results of this study? F. Meng: There are three important findings from this study which we have already mentioned. First, it is exceedingly impor- tant to unite in a partnership, as we have seen in the example of Club Med. Second, the Asian competence must be represented at the highest possible management levels, ideally on the super- visory boards, management boards, or at the executive officer levels. Third, no one should rely exclusively on specific indivi- duals; focus should be on the systematic integration of leaders into a team structure so that the individual managers can be ­empowered more precisely and protected from possible blun- ders. DMR: So the trend is moving rapidly away from the search for an ideal individual and in the direction of finding someone who can work optimally on a team. F. Meng: Yes, I see this happening more and more in my field. DMR: We have come to the end of our interview. Thank you once again for this fascinating discussion. You have genuinely given us many new insights.
  15. 15. 14 Detecon Management Report blue • 2014 Intercultural cooperation is not a management buzzword for Georg Habenicht, Vice President Procurement Academy, Culture and Change at BuyIn − it is a fundamental aspect of his every- day work. At the procurement joint venture of ­Deutsche Telekom and Orange, which is situated in Bonn and Issy-les-Moulineaux near Paris, about 250 colleagues from 24 countries work together on a daily basis to obtain optimal procurement terms and conditions for their two mother com- panies. We talked to Georg Habenicht about his work and the challenges as well as opportunities which this German-French cooperation generates for BuyIn. Interview with Georg Habenicht, Vice President Procurement Academy, Culture and Change, BuyIn „There is No Equivalent to Paris in Germany“
  16. 16. 15 Detecon Management Report blue • 2014 MR: Mr. Habenicht, let’s start with a question about your du- ties and responsibilities at BuyIn. You work in the exciting field of ‘Leadership and Corporate Culture’.What does that involve ­exactly? G. Habenicht: ‘Leadership and Corporate Culture‘ encom- passes two primary tasks. On the one hand, we manage the BuyIn ­Academy, which is internally responsible for the orga- nization and execution of advanced training. For instance, we organize training programs on aspects of negotiations, strategic procurement or intercultural cooperation. On the other hand, we take care of BuyIn’s internal change management and BuyIn’s corporate culture. DMR: In a company that employs people from 24 countries, this second aspect in particular probably offers you a lot of opportunities to learn one from one another. Habenicht: Yes, exactly. Major elements of our business ­mission include the successful creation and ­implementation of a ­BuyIn corporate culture and the building of a bridge ­between the ­cultural differences. That is why we offer so-called ‘Bridge ­Training‘ to all our new employees. It helps us to create a ­framework in which we can learn one from one another and profit from the strengths of the various nations to the benefit of BuyIn. We focus, for example, on special cultural features, especially in direct comparison between Germany and France. An analysis of stereotypes, which are of course exaggerated and not true for all individuals, helps us to identify the typical be- havioral patterns characteristic of any culture and to respond appropriately to them. Together we will only be able to move ahead if we learn to understand each other’s country. DMR: How would you describe a ‘Bridge Training‘ session? Habenicht: A ‘Bridge Training‘ session lasts two days. It is a workshop with a pragmatic rather than a standardized struc- ture which takes the specific situations of the participants into account and is oriented toward their needs and experiences. The objective is to enhance cultural understanding and, by doing so, to reinforce the BuyIn corporate culture. The content of our work is based on the principle of perceptions of ourselves and of other people. We attempt to bring these per- ceptions into harmony with one another in such a way as to generate trust. In a next step, we try to familiarize the new em- ployees with the BuyIn corporate culture. At BuyIn, we work with the fundamental principle ‘Avoid the friendly avoidance‘. This means that we want to address and discuss cultural diffe- rences and issues that may be related to these differences openly and frankly. Open and constructive feedback as well as transpa- rent communication are essential in order to achieve this. DMR: How different are the cultures really? Habenicht: At the start of the project, we observed three ­cultural levels at BuyIn: first the BuyIn level, then the level of the parent companies Deutsche Telekom and Orange, and finally the level of the nationalities. Naturally I could say that we all drive on the same side of the road and that our standards of living are ­similar, but when we go into more depth, we determine that there are incisive differences, too. And the closer the cultures are, the more important these small differences become. Every single employee is marked by a complex history. It is shaped by the individual’s personal environment on the one hand and by his or her home country on the other. Above all, this history has roots extending deep into the past of the cultural development of the specific country. If this development is not made transparent, it is difficult for someone to understand his or her culture. DMR: Do you have any concrete examples? Habenicht: Yes. There is no equivalent to Paris in Germany, i.e. a central point in the country where everything happens. At the beginning, the French often asked us, ‘When will Deutsche Telekom move to Berlin?’, and we answered, ‘Never’. We have a number of ‘Parises’, including Berlin, Frankfurt, Hamburg, and Munich, meaning that because of our history we have a much more localized and federalist structure than France, where ­there is a strong, centralized focus on Paris. These differences are ­reflected in decision-making processes, for instance. Germans are highly consensus-oriented, spend a lot of time in advance (as the French see it) coordinating topics, and put a lot of effort into the preparation of negotiations and meetings. Germans move ahead deliberately one step at a time, according to agreed rules. Negotiations and meetings for the French, on the other hand, happen much more on a relationship level. The motiva- tion for the conversations and discussions shifts according to the ­circumstances of the specific meeting and the negotiations. Another significant difference is related to problem manage- ment. The knowledge of the subject, the expertise, and the process are very important for Germans. They focus most in- tensively on the task in hand. The personal aspect, the general situation, and the ambience are the most important aspects for French people – and not the process as such. D
  17. 17. 16 Detecon Management Report blue • 2014 Georg Habenicht is an architect and has a Master’s degree in Environmental Planning. He currently works as Vice President Pro- curement Academy, Culture and Change for ­various ­initiatives within the context of corpo- rate culture, change management and advanced training at BuyIn. Georg Habenicht has been guiding the transformation of Deutsche Tele- kom in various management positions within the Deutsche Telekom Group for more than 29 years, always maintaining a close relationship to people management issues. BuyIn is a procurement joint venture in which Deutsche Telekom and Orange are equal partners. Founded in 2011, the com- pany is active primarily in three divisions: Network, Customer Equipment and Service Platforms. The company’s headquarters are located in Brussels, and the majority of the approximately 250 employees work at the primary locations in Bonn and Paris. The joint venture is headed by Volker Pyrtek, Chief Procurement Officer and Managing Director of BuyIn.
  18. 18. 17 Detecon Management Report blue • 2014 The two cultures also differ clearly when it comes to the style of communication. While Germans prefer a highly precise, explicit form of communication, the French tend to communicate more implicitly and playfully. But of course I am talking here about really broad generalizations. The boundaries are not this hard and fast in reality. But the tendency is definitely there. DMR: What actions do you take at BuyIn to foster efficiency and positive attitudes among all of these cultures under one roof? Habenicht: One extremely important element, while it may seem banal, was the establishment of clear rules, such as the Meeting Rules, right from the beginning. These ten rules are a combination of the habits of the Germans and the French. One rule, for instance, reads, ‘We arrive in time to greet our colleagues before starting,’ and combines the punctuality of the Germans with the warm-up phase of the French. The latter don’t want to jump right into the subject of the meeting; they want to engage in some personal chit-chat with their colleagues first. DMR: Is there an assessment tool to check where employees stand when it comes to corporate culture? Habenicht: Our unit is also responsible for the various aspects of ‘employee and customer surveys‘, which is a good tool for this. The employee survey known as the ‘Mood Indicator‘ ­includes 21 questions on employee satisfaction along with three ­additional questions on internal customer satisfaction. The Mood ­Indicator is conducted twice a year. The questions about ­employee satisf- action are related to strategy, employee engagement, leadership, processes, and integration, as these are the aspects which are essential to BuyIn’s success. The Mood ­Indicator helps us to ­initiate improvements and identify strengths – also in terms of creating a more open corporate culture. The survey results for the statement: ‘I experience the communication within BuyIn as open and respectful‘ make a significant contribution to trans- parency and success in the company. DMR: What does ‘corporate culture‘ mean within the context of BuyIn, and how is this ultimately operationalized so that it is not just lip service? Habenicht: The wording of our leadership model has just been determined within our corporate values: Simplicity, One Voice, Partnership, Ambition. These concepts reflect the start-up spirit at BuyIn. Our aim now is to weave these principles even more tightly into the fabric of our company and to continuously fill them with examples that make a strong impression. DMR: You have just touched upon the subject of leadership conduct – how do you lead a team at BuyIn while showing due respect to the various cultures? Habenicht: There are equal numbers of German and French ­managers at BuyIn. This was done deliberately to ensure ­balance in the management structure and to avoid disharmony. ­Moreover, the German CEO and his family have moved to ­Paris – a step with powerful symbolic effect to the French as a way of ­stating, ‘I am reaching out to you, I want to become more ­familiar with your culture.’ But culture plays another important role in the matter of ­management. The path to management positions is different for German and for French people; a French person who did not study at one of the ‘grande écoles‘ has a hard time climbing the management career ladder. Furthermore, the French are ­accustomed to career paths which move steadily upward – ‘up and down‘ is almost unimaginable to them. In terms of content, expertise and process are the key criteria for German managers, while individual and general management knowledge is important for the French. We don’t see either of these approaches as ‘the right‘ or ‘better‘ one. Both leadership styles are valuable and important if we want to be able to grow together. DMR: Are there still challenges in the intercultural cooperation even after three years of BuyIn, or were such issues primarily ­characteristic of the beginning? Habenicht: Since we have all had a highly constructive ­attitude and approached one another with a willingness to cooperate, our company now functions as a very ‘well-oiled‘ ­machine. ­Nevertheless, there are still challenges such as further ­strengthening the corporate atmosphere and the joint hand- ling of the current demands of the market. Trust, acceptance and tolerance must be constantly renewed. This is an ongoing, ­never-ending process, but one which is highly promising for us.
  19. 19. 18 Detecon Management Report blue • 2014
  20. 20. 19 Detecon Management Report blue • 2014 There is a punching bag hanging in a small coffee lounge on the third floor of the work ­areas at the corporate consultancy Detecon International; the complete furnishings of a ­rustic ­Tyrolean pub welcome guests to one of the other rooms. This might be the first sign for ­visitors that people think differently about the way they work here than in other ­companies. The working areas feature creative designs, and the employees choose their workplaces on their own. Detecon calls this “smart working” – a clever philosophy of work that has ­catapulted everyone involved into a new era: a mobile lifestyle in combination with constantly changing requirements from different projects conducted on-site for different clients. Why Is There a Punching Bag Hanging in the Coffee Lounge? Smart Working@Detecon
  21. 21. 20 Detecon Management Report blue • 2014 ew factors demand a transformation of the working worlds. In view of the technical innovations now available, the time may well be ripe for a new way of working. Higher quality of work – lower costs Smart working is a holistic concept encompassing a vision for corporate culture, leadership, IT, organization, and work ­environments. It integrates mobile work into the corporate ­culture and seeks innovative solutions which make the organi- zation more agile and the work procedures more flexible. Smart working promises a number of advantages for both ­employees and companies. By making use of modern technolo- gies, employees can be flexible in choosing their working hours and styles and determine the schedule of their day’s work them- selves. Mobile work can be viewed as the first step in the direc- tion of work-life balance – a countermeasure to the ­growing numbers of people at risk of work overload and burnout. The employees are not the only ones enjoying these advantages; the companies benefit as well from the greater productivity of their workforce. Moreover, office space requirements are reduced ­significantly and there are savings in travel expenses. But how to go about implementing smart working in the com- pany? And how do you lead a team that is no longer physically present in the office? Smart working at Detecon By introducing smart working, Detecon has realized a concept which integrates holistically all of the demands on a modern working world. The principle here is unchanged: before offering a consulting product to a client, you should have mastered it yourself. The implemented principle is based on the three pillars of people, places, tools. All three of these aspects are of fundamental importance be- cause they function only in harmony and interaction with one another. “Places” stands for the dissolution of territorial work ­areas such as cellular offices. The architecture of the building and the partitioning of the available area are key aspects. The ­employees ­require various work environments which provide the ­appropriate ­support for their work styles. In other words, the rooms must ­satisfy differing requirements dependent on the work ­style. ­Every employee must have the opportunity to con- centrate on his or her work at a desk. But there must also be en- vironments which encourage teamwork or offer a setting for vir- N
  22. 22. And what comes next? Detecon is not alone; other companies have implemented parts of the smart working concept as well. In most cases, however, their efforts have not gone beyond the architectural aspect. But smart working is a holistic concept which must be accompanied by a cultural change. It changes work in many areas and must be clearly directed by leaders who themselves set a living example. A critical examination of all of the aspects of the subject is also of elementary significance. The fear that you must always be available in today‘s world and can never leave your work be- hind you is certainly justified. Nevertheless, it is questionable whether turning off the BlackBerry email access after 6:15 p.m. as is currently practiced in some large corporations is truly the ultimate solution. It makes much better sense to strike a ba- lance between giving and taking. But this cannot be controlled by formal regulations; the involved employees and managers must agree with each other on the form this balance will take. ­Without an adapted and functioning corporate culture, this will not be achievable. Success at Detecon Despite all the possible objections, Detecon regards smart ­working to be a model of success. Perhaps this is due to the fact that corporate consultants today already work in a way that may not become reality for employees in other corporations for another five or ten years. Flexibility, assumption of own respon- sibility for project work, and virtual collaboration are part of the job profile for every consultant, even without smart working ­concepts. But in spite of all their flexibility, the consultants have grown fond of the restructured office building as a base where they can return from the projects on Friday. They share the latest news with their colleagues and have a cup of coffee together between meetings in one of the creatively designed corners. From time to time, some of the colleagues have even been seen working off the stress of a difficult week by taking on the punching bag before setting off on the weekend ... Detecon has already profited greatly from the advantages of this approach. The employees have also learned to appreciate greatly the concept and the new work styles it entails. The clear conclusion: recommend it to others! 21 Detecon Management Report blue • 2014 tual meetings. Even rooms which promote informal ­exchanges – such as the coffee room with the punching bag – are part of the concept. All of the areas support differing work styles and offer to each employee the ideal work environment for the job at hand. This type of layout also assures efficient usage of the area – with the resulting significant savings in expenses. While this is really important, part of the savings must be invested in an inspiring environment which increases the sense of well-being, motivation, and performance capability of the staff. “People” are another key element of the smart working ap- proach. Employees have a lot to gain from this world, but they also have a lot to learn at the beginning. What room module suits my work style, how do I work with colleagues on a project team when I rarely see them in person and how do I balance the give and take with them, how do I maintain a work-life balance within the general framework of mobile work? When workplace and working hours are flexible, the framework for the work can no longer be prescribed by issuing formal rules and regulations. On the contrary, a new leadership culture must promote a balance. There are certainly differences with respect to leadership tasks and the management instruments used as they must relate to the varying responsibilities of leading virtual teams. Executives will have to face new challenges such as a decline in the oppor- tunities to check up on employees and the accompanying im- portance of trust in employees’ work, forcing changes in the way roles are understood and clear definitions of responsibilities. The provision of the appropriate infrastructure and technolo- gy – the “tools” – becomes an essential element for the realiza- tion of these principles. Mobile work means a flexible choice of workplaces made possible, for instance, through secured hot- spots and complete changeover to cell phone usage. Detecon as a company goes another step further: tools not only make mobile work possible, but offer to every consultant the oppor- tunity to work as he or she sees fit. They can decide themselves what projects are interesting for them, not only from a hotel room or while on a train, but on an online platform as well. The “Detecon Project Exchange” lists all of the projects currently in preparation and which must be staffed. Consultants can sub- mit applications to become a part of these projects, thereby co- determining their assignments to projects. However, this free- dom goes hand in hand with the responsibility of themselves en- suring that they maintain a workload of a sufficiently high level.
  23. 23. 22 Detecon Management Report blue • 2014 Transformation Culture On Course to an Innovative and Agile Company Companies, especially those with a close relationship to ICT, must today be more agile, more flexible, and more far-sighted in their actions. The firms which enter into a never-ending learning process – and, if necessary, reinvent themselves every single day – are the ones which will accomplish this feat.
  24. 24. 23 Detecon Management Report blue • 2014 s anyone can see today, current trends such as globali- zation and demographic change brought about by the rise of ­Generation Y (the “digital natives”) and the ­simultaneous ­decline in the number of “non-digital natives” are ­advancing the growth of virtual communication and collaboration. ­Moreover, the cultural changes in the way we live and work are increa- sing the demand for new digital devices and services that can make life easier and give us greater control. The assumption is that customers in 2020 will be surrounded by an average of six different monitors and the Internet access will be available everywhere. The result would be an increase of 50% in the number of ­digital devices sold in contrast to an increase in world ­population of only 6% in 2020 (Cisco data compilation of 2012). There are also projections that 4.4 billion people will still not have ­Internet access in 2020, an enormous opportunity for companies to drive forward innovations which can close this gap (ITU, “Measuring Information Society”, 2013). These changes in customer needs along with the unsatisfied demand call for new disruptive technologies. Cell phones are being increasingly used for navigation or as appointment calen- dars, wallets, and other tools. Message services and conventional telephony are being replaced by apps – lower-priced alternatives such as VoIP and WhatsApp. More and more products contain chips which can connect to our phones, and standard services of physicians, teachers, or trainers are being offered in virtualized form. The assumption for the long term is that telecommunica- tions operators will have to be transformed into open platforms and incorporate additional software services into their infra- structure (Detecon, “The Telco Challenge”, 2012). The inno- vation portfolio will contain primarily “B2B2C” models for the promotion of partnerships which can support trending topics. Examples include e-health (projected growth of 50% over the next few years), M2M, cloud, e-mobility, e-payment, and smart home and grid, which are projected to grow by between 18% and 37% (trend forecasts from DT, PWC, Machina Research, 2012). Changing customer needs and new disruptive technologies will produce new market conditions. Instead of operating all ­alone on a local market, telecommunications companies should ­cooperate more frequently with partners or multinational com- panies and new, innovative startups, whether within or outside of their actual industry, to develop new ecosystems offering net- worked services to all sectors. The industry will have to consoli- date if it is to overcome the endless price wars while remaining competitive. If companies want to be able to respond effectively to these ­challenges, they must develop a transformative culture. ­Culture is defined in this context as a comprehensive, convincing, ­creative composition of mindset, engagement, and skills which becomes a component of the company’s DNA and is lived by all employees and managers. Mastering radical changes and a con- tinuous transformation process requires approaches to work and learning which enable a company to become faster, simpler, and better. Firms must also find new ways to cooperate, to ­share, and to stay open to change. Companies must slowly, but surely, take their leave of an old world in which the work of individuals, fixed workplaces, and process-oriented thinking were dominant and hindered ­co-creation, collaboration, and flexibility. “Formal learning” continues to dominate the vocational training programs of companies – almost 95% of them on average – although this no longer satisfies the needs of today’s workforces (Sharon Bol- ler for BLP, 2013). Information undergoes constant change. In this context, what is more important is fast sharing and co- creating instead of interminable training sessions in a classroom ­atmosphere where half of the content is no longer retrievable after the end of the lessons, anyway. Instead, companies must develop new working and learning environments in which ­cooperation, social learning, customer-centric thinking, and flexible workplaces intuitively enable employees and managers alike to become more agile, more transformative, and more in- novative – the sole effective response to radical changes. In other words, companies must develop special units, working groups, or centers – platforms for a transformational culture – where the framework for cultural renewal is located. These units serve as development centers which act on all of these needs by developing and gathering new working and learning tech- niques, by offering special training, coaching, and other ser- vices for ­managers and employees, and by developing formats to cultivate and promote new corporate values and principles ­throughout the company and in collaboration with partners. A
  25. 25. 24 Detecon Management Report blue • 2014 Our Approach is Self-Empowerment Reza Moussavian Vice President Group Transformational Change Deutsche Telekom AG
  26. 26. 25 Detecon Management Report blue • 2014 MR: What was the baseline and motivation for the establish- ment of a separate “Shareground” unit at Deutsche Telekom AG? Moussavian: UIf we want to understand the motivation for the buildup of GTC, we have to take a closer look at the develop- ment of the telecommunications market and of Telekom. Over 20 years ago, Telekom sold phone minutes – with a de facto market share of 100% – and realized 90% of its revenues by doing so. We have seen a significant increase in prices in virtually all ­service sectors in recent decades (170% to 280%), food prices are about 60% higher, transportation costs have increased by as much as 270% – all price increases far greater than compensation for inflation. That is not the case for telecommunications services – a call minute from 1991 costs 94% less in Germany today! What do you do when confronted with this type of situation? First strategy: reduce costs. But that alone will never compen- sate a decline of 94%. Second strategy: acquisition. Purchases in ­Southern and Eastern Europe, in the USA, and Debis/ T-Systems. Third strategy: new products. Deutsche Telekom combines these three strategies very carefully, but we determine that these three strategies require widely different management and corporate cultures – from cost and efficiency awareness, thinking in terms of quantitative KPIs to creative ­entrepreneurial visionaries with new ideas and business opportunities. Staying with only the one group might push us into economic decline, staying with only the other group might ­cause us to go ban- krupt. So we need an intelligent mix of both “cultures” and the determination of common values, accomplished through intel- ligent and integrated methods of ­collaboration, consistent focus on users in corporate processes, and new, agile working me- thods. This is what prompted the Telekom Management Board to establish Shareground, an internal unit driving the transfor- mation of the corporation along the lines of the aforementioned points from the inside. DMR: Creating a culture of innovation and transformation – that would appear to be a major mission for a relatively small unit. What is at the heart of your approach? Moussavian: My leisure-time activities include standing at a DJ desk on many occasions, and I see my work here as a kind of DJing. Getting the right settings for the highs, mediums, and bass – culture initiatives, mixing the right tracks – intelligently D mixing with new working and collaboration methods. I would like to make corporate culture tangible. First, ­striking out on new paths and aligning concepts with a focus on ­customers; agile realization; acquiring the latest knowledge with great ­efficiency and on the job, throughout the company and ­inclusive of all silos for the benefit of the corporation, not of the individual departments. Second, “from talking to action” – spending less time talking about culture and communicating events, instead making them something to be experienced in operation, and supporting concrete tasks and building new capabilities for making ­decisions and solving problems by the use of methods. Third, helping people to help themselves, setting up interven- tions to build up a cross-group community of “transformists”, and driving forward the transformation ofTelekom from ­within. DMR: How can you, in this sense, ensure the dissemination and permanent incorporation of the subjects into the corporate DNA? Moussavian: This is a good question, and at some point it be- comes a great challenge for virtually every enterprise. We ­pursue a number of approaches parallel to one another: on-the-job ­support of selected top leaders in strategically important trans- formation projects (“TTT”). We can generate a kind of suction pulling others along in our wake and snowball our service for lower hierarchical levels. We are not an extended workbench that provides resources – our approach is one of self-empower- ment. We do not conduct training programs, but instead sup- port, directly and concretely, the presentation of the problems at their site “on-the-challenge”. This enables the participants to build up a permanent stock of knowledge which they can ­apply and disseminate on their own in following projects – i.e. ­self-empowerment. We believe in the combination of bottom-up and top-down, which leads us to support grass root initiatives as well – on loca- tion in the segments, for example. They are very important be- cause they significantly increase our knowledge about the group and the quality of our services. Social media and Enterprise 2.0 technologies are rigorously used and employed in the corporate context for the transforma- tion of the culture. Enterprise 2.0 serves as an enabler for our collaboration principle and makes it possible for us to address ­virtually the entire group and all of its entities with transforma- tion ­potential.
  27. 27. 26 Detecon Management Report blue • 2014
  28. 28. 27 Detecon Management Report blue • 2014 Finally, we would like to empower the transformation mana- gers and use them for dissemination, ultimately reaching the full group mostly through the use of strictly pull initiatives. DMR: We have to take a moment to go into more detail while on the subject of “empowerment and knowledge communication” – to what extent do you exploit the type and nature of your work to generate impetus in the direction of advanced training, talent management, and the fostering of employees or similar areas? Moussavian: We regard ourselves in this respect to be an inte- grated part of the training and advanced training work at Deut- sche Telekom and stimulate actions. Our role here is primarily the development of innovative methods and procedures and tests of their impact on transformation and innovation. During this ­development, we depend on the know-how and support of other internal experts and service providers – including Dete- con. If the methods prove to be valuable, we pass the knowledge on to the internal units specialized in training and advanced training. We make resolute use of internal units such as Telekom Trai- ning for disseminating and securing the “mass suitability” of this Reza Moussavian is a world citizen with the necessary international experience to handle the launch of new market entries or the transformation of leading operators. In his capacity as Vice President of the Group Transformational Change at Deutsche Telekom AG, he drives the Shareground Initiative intended to create and promote a new culture with regard to collaboration, innovation, and implementation within the company. The Magenta MOOC is only one of the many exciting projects under the auspices of Share- ground. Moussavian previously worked as Managing Partner for the MENA Unit of Detecon International GmbH and as a strategic consultant at IBM and PWC Consulting. He has handled assignments in more than 40 countries around the world for clients such as Telefónica, Svyazinvest, Vodafone, Ooredoo, and Etisalat, for regulatory authorities in the Middle East and South America, and for investors in the Asian-Pacific region. He preached end-to-end transformation in these cases as well. Shareground is Deutsche Telekom’s platform for transformation culture. It is an initiative, a dynamic community, which seeks to drive transformation and networking with others as a means of establishing today the working culture of tomorrow in the company. Activities include workshops and coaching programs for business teams on the subject of new working and collaboration methods as well as cultural partnership programs, transformation think tanks, and new experiences for employees, all aimed at creating an orga- nizational culture oriented to innovation. Shareground’s objective is to enhance effectiveness in the company. Shareground addresses all employees and calls on them to explore new ways of thinking and to utilize transformation capabilities, to revitalize the executive suites, and to focus on agile, value-oriented realization which will promote cultural renewal. know-how and build up a “share pool” which communicates this knowledge further and assures the broad-based building of skills in the company. Our actions here make a major contribu- tion to the acquisition of transformation skills in the corpora- tion. DMR: While talking about team and team performance – what criteria did you actually apply in putting together your team? Moussavian: During the selection of the employees, we set our sights on the levels strategic versus operative and challenger and critical spirit versus optimist and doer. Our objective was to ob- tain a healthy balance, and we did a good job accomplishing this. Living transformation is a fundamental question of attitude. It means displaying a high level of flexibility, self-organization, and responsibility for one’s actions. Ultimately, all of the ­employees had to bring along the tools for the transformation of situations with new content. Naturally it is very important to have the greatest possible ­diversity in the team composition: different cultural back-
  29. 29. 28 Detecon Management Report blue • 2014 grounds, business departments, and skills backgrounds. For ­instance, there was no effort to include a certain level of HR skills in the team, but to maintain the broadest possible poten- tial in our team. DMR: One focal point of this issue concerns the subject matter grouped under the heading of “leadership”. Deutsche Telekom is working at this time on new leadership principles and their ­operationalization in management programs or communities. What shape will these new principles take and, in particular, what contribution will Shareground make? Moussavian: Managers are among the major drivers for any transformation process, but especially cultural transformation. Managers are catalysts for transformation. The decisive point is that they serve as models for the transformation through ­consistency in values and a positive fundamental attitude ­toward the company and its employees. This attitude has been codified in the Leadership Principles which read: Innovate, Collaborate, and Empower to Perform. What does this mean? An entrepreneurial mindset is at the focus of attention, i.e., creating something new and driving it for- ward toward the goal in collaboration with their own teams to the benefit of the whole, the corporation. The aim is to make use of new working methods which enable managers and their teams to move ahead with things more simply and with a ­greater ­orientation to customers and costs. This will succeed only if people work together efficiently and effectively, releasing indi- vidual potential and breaking down barriers – the basis for all innovation. One approach used by our unit in this respect is the Simpli- city Initiative – this goes deeper than just simplification and ­increasing efficiency to cover in particular the creation of a cul- ture of trust which has the effect of reducing complexity. When I collaborate with colleagues and employees, I must trust them, permit them to make mistakes, and open up opportunities to try out jointly new and innovative subjects and, together, to advance them successfully. I can create a culture of error and trust open to innovation only if I apply “Empower to Perform” each and every day and con- cern myself in particular as a manager with the question of how I can succeed in creating an environment which releases the in- dividual potential of the employees. Our problem solution method “Hello Transformation” and our “Business Lab” also play a role in the principle “Collaborate”. DMR: This is a highly interesting idea. But there is undoubtedly still a long way to go before these values can put down deep roots ­within Telekom. How do you want to accomplish this and support it? Moussavian: It is human nature to be critical of any changes and to seek to secure the status quo. There is certainly no ­question that the approach of “we are going to change Telekom in ­every single aspect at the same time” is not very promising. Our ­guiding principle is “start small, but start” – get started right away in producing success stories and in utilizing or ­creating qualified disseminators. The concept of “lead by ­example” is at the forefront of our approach: writing these success stories related to concrete challenges in cooperation with our transfor- mation community and making them visible to others in the company. We hope this will have the effect of infecting others and cause a domino effect in the group – for instance, we had several thousand submissions about our initiative “Magenta MOOC”, and the broad impact was correspondingly great. Even today, there is still a lot of highly positive talk about the format ­“Telekom Challenge” conducted in pilot format last year and widely known within Telekom. It showed an interdiscipli- nary and global team successfully applying innovative methods to a CSR issue. We don’t have a very high opinion of great events or campaigns, preferring to bring about positive change through joint and successful resolution of concrete challenges – this may not be as strident and loud as an image campaign, but it is much more authentic, sustainable, and associated with concrete benefits. DMR: Could you perhaps go into some examples of success and concrete initiatives? Moussavian: Business Lab – we mean here a methodical form of consulting during which work is done on concrete issues of managers and their teams through the use of a working me- thod such as Rapid Prototyping or other agile methods – as “open heart surgery”. Once again, the aim is self-empowerment. ­Successful utilization means that the team we have advised will be able to help itself in the future and that it has internalized the procedure. Our success proves that we are right: we have ­successfully completed more than 35 assignments, and the pipe- line is filled with plenty of work.
  30. 30. 29 Detecon Management Report blue • 2014 Magenta MOOC – a completely new way for employees to ­collaborate on an interdisciplinary basis throughout the group. An interesting format which combines subjects related to trans- formation, simplicity, innovation, and entrepreneurship. It ­focuses particularly on a smart combination of internal and ­external contributions from top experts in research and practice. The objective of Magenta MOOC is to motivate employees to develop their own innovative ideas – self-empowerment again! – and to contribute their comprehensive knowledge. This has also been highly successful and stimulated a positive response: 3,500 participants and 120 teams collaborate across divisional boundaries on the aforementioned subjects, and it is remarkable to see the creativity, yet close relationship to practice, of the ideas generated by the teams. I am really keen to see how this new form of collaboration will show up in the future working styles of the participating employees, how it can be permanent- ly instilled in them, and what concrete innovations ultimately result for Deutsche Telekom. I am highly confident that we will be able to use these and similar formats to bring about a cultural transformation. Moreover, there are still transformation think tanks like Simpli- city – and I will tell you next year what will happen in the Berlin Shareground building from May 2015 on ... One more word about the initiatives: whatever we do, it is al- ways important to us that enthusiasm never wane – it is one of the most important traits of “high-performing teams” and often a distinctive feature setting them apart from mediocrity. The formats and platforms we have provided literally unchain the potential of employees. The highly positive feedback and the enormous demand prove we are right and motivate us even more to continue along the path we have chosen. DMR: You mentioned that customer orientation plays an ­important role in your work. Customer orientation is a ubiquitous buzzword. What do you mean with it in the context of your own work? Moussavian: When I say customers, I mean users, and that is not necessarily always restricted to an end user – after all, every- one has a customer, someone who uses his or her output and work. That is why user needs should be determined in an early phase and the core tasks of daily work should be integrated more ­tightly into existing processes. It is decisive that we repeatedly ask ourselves what activity, what process, what document, or what output in general serves the user or from the user’s perspec- tive simplifies, improves, or could even be dropped completely – a core element of our Simplicity Initiative. We quite often see that activities and tasks more or less “come to nothing” and there are no users at all at the other end. We must constantly question our own actions from this perspective. When all is said and done, this should be reflected in increased brand and/or customer value for a company. However, I have no use for the approach of orienting everything to an artificial customer concept and forcibly aligning the company with an artificial end customer. This is the question which is much more significant: What additional benefits do I create for whom with this activity, and how can I accomplish this in the most efficient, the simplest, and the least complicated way possible? Sometimes that also means that “the best service is no service.” DMR: How about a brief look ahead here at the end of our ­discussion? Quo vadis, Shareground? If you could look into a crystal ball, where would you see your unit in the future, or where would you like to see it? Moussavian: If at all possible, our unit should no longer exist in ten years because all of our methods and working values will have been permanently integrated into the company’s DNA and will be applied almost automatically every day. We have been given the task of increasing the group’s transformation and innovation capability. Our goal must be to accomplish this as soon as possible. If we look at a shorter time frame of about five years, the goal is to be an integral component of the COO’s operating model, to anchor firmly our understanding of transformation in this model, and to take into account strategic initiatives in the future design of the structural and procedural organization. Going beyond any permanent organizational anchoring, we ­understand our special mission in particular to be the use of new methods and approaches which constantly surprise our ­employees and managers anew, push them out of their comfort zones, and generate their enthusiasm. This effectively contri- butes to a positive culture of transformation and innovation.
  31. 31. 30 Detecon Management Report blue • 2014 he term “intrapreneurship” is popping up with greater ­frequencyduringdiscussionsaboutinnovationsand­encouraging innovation. But what is the background to this buzzword, and what advantages can companies hope to obtain from the “intra- preneurs” within their own ranks? The neologism “intrapreneurship” was created by combining the words “intracorporate” and “entrepreneurship” to describe individual employees or groups behaving like entrepreneurs and bundling corporate resources to develop innovations at their place of work. Spurred by spontaneous initiatives on the part of their staffs, companies can develop previously undiscovered business fields, even rethink and optimize their internal organi- zation. Such initiatives “from the inside” are particularly strong drivers of innovation and offer added value to both sides – the workforce and the company itself. Strategically integrating intrapreneurship within the company itself Innovative business segments are built up or strategic ­reorientation is initiated by the special commitment of indivi- dual employees or groups within established companies. 3M, T Innovation – a Core Element of Corporate Culture Intrapreneurship Apple, and Google demonstrate how it is done. These firms have implemented various measures to support their employees in the development of their own innovation potential and offer them the freedom to establish themselves as entrepreneurs at their own workplaces. Numerous companies are now following their example and regard intrapreneurship to be an element of the corporate culture. However, there are two important factors which are essential for the realization of intrapreneurship: 1. Motivation and support from senior management. 2. The security of knowing that the intrapreneurs will not be punished or even lose their jobs if the business idea is a failure. Entrepreneurial creativity is inhibited by rigid structures According to an international survey conducted by the accoun- ting firm Ernst & Young, 82% of the 263 surveyed entrepre- neurs agreed that innovation is decisive for the growth of a busi- ness. But innovation of this kind cannot thrive without informal The number of companies that recognize the added value of intrapreneurship is growing, and they are implementing programs to support the entrepreneurial actions of individual employees or ­employee groups. Their purpose is simple: the release of the innovative power lying dormant ­within a company – in its workforce. The members of an organization’s own ranks are keenly aware of the pulse of their business and thoroughly familiar with the challenges of their specific market. We describe here six strategies which companies can employ to draw on the innovation strength within their organization and exploit intrapreneurship as a strategic success factor.
  32. 32. 31 Detecon Management Report blue • 2014 and agile organizational structures that inspire creativity and can deal with setbacks. Large, established companies often have rigid structures institutionalized in hierarchies which smother the entrepreneurial spirit and limit growth. Interestingly, almost half of the respondents – 49% – share the opinion that innova- tion has become more difficult, particularly as a consequence of the increased size and complexity of the organizations.* Six strategies for promoting inherent innovation power As the winds of competition on international markets blow more strongly, the significance of innovation as an enabling force giving companies an edge over their global rivals is rising enormously. The best path to accomplishing this leads to the exploitation of resources which are already available: their own employees. But how can companies inspire creativity within their workforces, enabling and encouraging innovation? What practical actions must be taken if innovation is to become a fixed element in the corporate culture? After analyzing numerous surveys among managers and ­established academic institutes, six strategies could be identified to accomplish these goals. 1. Create a formal structure for intrapreneurship. Give your employees enough time to work on creative projects alongside their “daily business” and implement a formal process for the development of new products or business ideas. 2. Ask your own employees for ideas and suggestions. Your employees are keenly attuned to the heartbeat of the ­market. Encourage every single employee, regardless of rank or position, to contribute to the innovation dialog. 3. Gather and unleash a diversified workforce. Academic studies confirm that groups whose members bring with them various points of view develop better ideas and pro- ducts. Use this multifaceted energy source to your advantage. 4. Set up a career path for intrapreneurs. For the most part, intrapreneurs tend to be lone wolves who strongly dislike and reject traditional administrative work. Blaze new trails in this respect and offer attractive prospects for pro- fessional advancement to your employees. 5. Explore government incentives for innovations. Find out how government subsidies can support your entre- preneurial activities. Governments all over the world are of- fering new forms of tax relief and other incentives, especially in ­research and development, while companies in turn call on ­governments to support innovation. 6. Be prepared for setbacks. Even bold ideas can fail. Always be aware that not every idea can be successfully realized. Be ready to deal with setbacks, in- ternal conflicts, financial risks, and disputes about intellectual property. While no one should see these guidelines as guarantees of ­success, they do offer a strategic plan for loosening the organiza- tional bonds in companies and generating a supportive environ- ment for creative processes. Moreover, all six of these strategies pursue a key goal: the institutionalization of intrapreneurship, the weaving of the entrepreneurial engagement of employees promoting innovation power inseparably into the corporate culture. The process of continuous innovation cannot otherwise be maintained. Intrapreneurship – a strategic success factor There can be no question that intrapreneurship is a strategic success factor for innovative companies. Flatter ­hierarchical ­levels, autonomous action, assumption of responsibility, and the authority to solve problems are also becoming more ­important in terms of the expectations that the members of Generation Y have for their workplaces and employers. This is where the ­effective integration of people who think and act ­entrepreneurially strengthens the organization in a business and social ­sense and enables them to make a huge contribution to corporate success. * http://www.ey.com/GL/en/Services/Strategic-Growth-Markets/Igniting- innovation-how-hot-companies-fuel-growth-from-within-Successful- entrepreneurship
  33. 33. 32 Detecon Management Report blue • 2014 A Sustainable Transformation Program Strengthens Competitiveness A dynamic market environment demands ongoing adaptations in organizations. The E.ON transformation program demonstrates that quick wins and sustainability need not be mutually exclusive. Michael Kamsteeg, Director of this program, spoke with DMR BLUE about leader- ship as a success factor. Interview with Michael Kamsteeg, Director of the E.ON 2.0 cost reduction and restructuring program
  34. 34. 33 Detecon Management Report blue • 2014 MR: E.ON 2.0 is probably the most extensive transformation program ever undertaken at E.ON. What ultimately prompted the decision to launch this program? Kamsteeg: The program was started in the summer of 2011. Our market environment had changed. Rising overcapacities, especially in the power generation business, heightened inten- sity of the competition on the market, new technologies, par- ticularly in renewable, localized energy provision, and changes in the general political and regulatory conditions – specifically the shutdown of nuclear energy – confronted us with challen- ges that made it impossible to continue “business as usual.” We wanted to face these changes proactively so that we would con- tinue to be the leaders in our industry in the future. DMR: What objectives were set for the program? Primarily the ­reduction of costs and headcount, or did cultural aspects also play a role? Kamsteeg: The primary objective is the reduction of costs as a means of securing our competitiveness in the long run and the release of financial resources for the further expansion and ­restructuring of our energy business. E.ON would like to belong to the top quartile of companies with respect to ­administrative and operational functions. However, the sustainability of the ­savings must be assured. Achieving this in a program of this scope is not possible unless there is a fundamental transforma- tion of the culture. The development and implementation of a performance culture in which continuous improvement is a living, constituent element is one of the objectives at the very core of the E.ON 2.0 program. DMR: What were the primary levers for achieving these objectives? Kamsteeg: We implemented improvements in all of the corporation’s divisions. They included structural changes such as the merger and relocation of holding companies and operating businesses, improvement of administrative functions by such means as the bundling of finance and HR activities in business service centers or centers of competence, cost reductions in the procurement of material and services, and improved efficiency in all of the operating units, including, for instance, lean actions in power generation, grid operations, and sales. DMR: It is not unusual to find long-term potential being sacrificed or left unexploited in favor of short-term “quick wins” during effi- ciency programs. What can be said about E.ON 2.0 in this respect? Kamsteeg: Achieving our ambitious targets for cost reduction meant having to take advantage of both quick wins and long- term potential. We made sure for every case, for all of our ac- tions, that they were also sustainable over the long term. Cost reduction measures which were not sustainable are just as effec- tive for raising profitability, but were not given consideration for achievement of the program objectives. DMR: When you look back to the beginning, where was the pro- gram confronted with the greatest resistance and points of criticism? Kamsteeg: One part of the program is a substantial headcount reduction. But we were able to convince our organization of the necessity and the fair balance of the measures by involving the co-determining entities at an early stage and establishing clear lines of communication from the very beginning. Moreover, we made decisions in favor of fundamental structural changes right at the beginning, and we set and communicated ambitious tar- gets. We resolutely pursued our goals and did not deviate from them over the course of the project, and so far they have been implemented and consistently followed up as planned. DMR: The theme of our current issue is “Leadership”. What role did management play in the transformation process, and how was the involvement of middle management in particular assured? Kamsteeg:Demonstratingleadershipwasanimportant­principle at all levels of our transformation program. We enjoyed the full support of our executive officers and senior ­executives right from the beginning. The middle management level was involved at an early stage as well, and the executives here were turned from affected parties into “owners” of the process, i.e., they acted as D
  35. 35. 34 Detecon Management Report blue • 2014 Michael Kamsteeg has held various commercial positions in the E.ON corporate group since 1995. In addition to roles in accounting, finance, and controlling, he was the CFO of a management unit in Romania. He has served as project manager to guide a number of transformation programs, and directed the E.ON 2.0 cost reduction and restructuring program. He has been CFO of the global units E.ON Generation and E.ON Climate and Renewables since the beginning of April.
  36. 36. 35 Detecon Management Report blue • 2014 project managers and the officers in charge of the actions. After the initial program phase, the cost reduction ideas and levers were handed over to the management of our ­management units and support functions for further development, detailing, and implementation. The cascading of responsibility for the deve- lopment, structuring, and implementation of the measures and for communication was always one of our special concerns. DMR: Let us stay with the subject of “Leadership” for a moment. Has E.ON 2.0 contributed to a new leadership culture or a new understanding of leadership? What have been the most significant changes from your perspective? Kamsteeg: E.ON 2.0 has beyond any doubt had a major im- pact on the leadership culture. This is a part of the determined ­adherence to the cost reduction measures and their implemen- tation. Transparency and responsibility are important to us. We obtain transparency by requiring the local units to submit de- tailed progress reports which we review with a critical eye. The point here is not to express criticism, but to be sure that we are exploiting the full strength of the corporation and can recognize and master challenges by working together. We understand ­responsibility to mean that our executives in the management units and support functions were able to develop measures on their own initiative – and, in the event of failure to reach ­targets, the necessary countermeasures – but also that they would be accountable to their supervisors, employees, and colleagues. ­Naturally we must not ignore the fact that fundamental structu- ral decisions such as decisions about locations, merging of busi- ness fields, or the establishment of business service centers were made top-down. DMR: What do you regard to be the major success factors for E.ON 2.0? What are the lessons learned? Kamsteeg: As a whole, E.ON 2.0 has functioned really well. That is why, above all, we would continue to put our trust in a strong project office, committed executives, and open-minded ­employees as we work together to develop actions and to ­monitor their implementation centrally and with very close ­attention to detail. Moreover, we have learned just how ­important communi- cation is. The context, the necessity, and the progress should be made clear to every single employee in good time. In ­addition, it is important to us that we exercise constant vigilance over the standardization of organizational structures and processes. The most important lesson learned was probably that E.ON is fully capable of carrying out transformation programs of such a scope and bringing them to a successful ­conclusion. DMR: Let us dare to take a look into the future. Are there still some areas which have not been completed, and how will the program E.ON 2.0 continue? Kamsteeg: E.ON has made a great leap forward with the 2.0 program. Nevertheless, we have not yet reached the top ­quartile of comparable companies in all areas. We still have a high level of complexity in our organization and processes and can become even better in our performance culture. But what is important for the moment is that we successfully complete the program by 2015 and sustainably implement the actions. The second half of a program is always the more difficult part ­because the ­remaining issues at this point are the ones that ­demand intense effort from all sides. But we are aware of this and are ­coming into the home stretch with a positive attitude and great moti­vation. At the same time, our market environment is not ­standing still, and we certainly cannot expect this program alone to have secured our future for all time, so we have ­already set further goals for 2015 and 2016. We will in the future unceasingly examine our organization and processes to determine where improvement is possible. The infrastructure of our transformation project is ready and waiting. Moreover, we want to work continuously on our efficiency in the sense of ongoing improvement – but initiated by the management of our operating units, not driven top-down. DMR: A final question which concerns us especially in the telecom sector. How do you plan to make the organization more sensitive to the issue of “efficiency” sustainably and long term and to establish firmly the “efficiency principle” in the company DNA and the cor- porate culture? Kamsteeg: No question, the transformation program was only the first step. From now on, we will be very careful to ­ensure that the subject of efficiency is always given consideration as a decisive criterion of standard processes. We will return to ­established management methods such as “lean” to assure the success of the step from a one-off cost reduction program to continuous improvement. But above all, the new culture of transparency and responsibility will live from the positive ­example set by the executive officers and managers. We are well on our way to this goal, and that is why we are certain that we will be able to change permanently the future of our company through our transformation program.

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