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How RWE’s biggest change process became a success

When I started at iCon over three years ago, I was straight out of university and was more than ready to begin my job as a management and strategy consultant. Up until then, I had not had much experience with topics such as “change” and “change management”. However, just as the topic of “change” reached RWE, it also reached me and decisively shaped my future career path.

When I first started, innogy Consulting was still called RWE Consulting and RWE was in the midst of its greatest transformation: The company was splitting its distribution networks, private customers and renewable energy business, and innogy was created – with the goal of going public. As we now know, the spin-off and IPO were a great success and today innogy is a “healthy” company. However, it was a long road to get there. In this article, I will tell you how RWE and innogy handled this transformation and how I ended up in Change Practice.

Why RWE decided to create innogy

Just how did these dramatic changes, and ultimately, the spin-off process at RWE come about in the first place? The nuclear disaster in Fukushima strongly influenced German energy policy – and subsequently RWE. In June 2011, the decision was made to phase out nuclear power and suddenly the “Energiewende” – the energy transition – was a hot topic – with enormous repercussions for RWE. After all, their core business was based on traditional energy production – including coal and nuclear energy. Until that time, current market trends – especially in the field of renewables – had not been pursued so intensively, as this was not a requirement for success in their traditional business. However, the new political stance forced RWE to change as well. They had to adjust their own strategy as quickly as possible.

For this reason, RWE CEO Peter Terium, who had been newly appointed in 2012, opted for a different strategy for the future: Instead of “What does RWE do?” the question would now be “How does RWE approach things?”. One of his first actions: a health check for the Group. The result was clear: The energy supplier lagged significantly behind the competition and was classified as “unhealthy”, i.e. unable to function or change.

Iceberg ahead – identifying the core problem using the mental model

In order to define the “how” for the road back to success, both the Change Practice of the former RWE Consulting as well as other “change engines” were established, which together formed the change team for the transformation process.

The first step the change team took was to understand how RWE ended up in this situation and what was keeping it there. In order to do so, the team worked in close collaboration with management, using, among other things, the iceberg model to uncover recurring behaviour patterns and the underlying mental models and structures that influence the behaviour (see Figure 1).

As part of this process, the assumption that change begins in the organisation itself applied to us then, as it does today. This means that in order to facilitate sustainable, comprehensive changes, one must first reflect upon one’s own behaviour and adjust it before one can also influence the environment.

Systematic change approach as a key to RWE’s success

After a thorough evaluation of these models and an in-depth consultation from Change Practice, the management team agreed on the following five change priorities over the coming years:

  • Improve leadership capabilities
  • Make strategies relevant for all employees
  • Focus on looking outward
  • Motivate employees and reward good performance
  • Build trust – horizontally and vertically

In order to implement these priorities, all measures focus on the “how” (right), which influences the “what” (left) as part of the “change butterfly” approach (see Figure 2). At the centre of all of this is the conviction that real change only occurs if there is a specific reason to do so. In order to spread this idea of change across all levels and to all people in the company, various new programmes were launched that were intended to familiarise all levels of the company with new ways of thinking and working, and to prepare management for their new tasks. This started with the top leadership team (Top Team Alignment Programme) and was followed by the 150 top executives (“Next Level Leadership Programme” – NLL), the “Delivering Breakthrough Performance” Programme (DBP) for project teams involved in the transformation, and ended with the “New Ways of Working” programme (NWoW) for all corporate functions. All of these programmes focus on the people and involve every employee. After all, we are convinced that, more than anything, employees support that which they have created themselves.

New career direction: My road to Change Practice

It was one of these programmes that familiarised me with Change Practice, after about a year at innogy Consulting, and ultimately led to me changing to this field. What convinced me? In Change Practice, solutions were developed with customers – not for them. The knowledge I gained then still accompanies me today: Change can’t be managed in traditional ways – it just happens. We merely provide the framework which, in turn, influences the overall system in an unpredictable way.

An article by

Isabelle Roggenkamp

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