Steinbeis expert Dr.-Ing. Jürgen Jähnert discusses sustainability and its role as a new leitmotiv of business and politics
Our economy is in the midst of a transformation process, primarily driven by the availability of digital technologies. But “going digital” doesn’t automatically result in sustainable development. True transformation requires both individuals and companies as a whole to rid themselves of old habits and entrenched paradigms. Doing so will be the only way to seize opportunities in the future, writes Dr.-Ing. Jürgen Jähnert (bwcon GmbH), the author of this latest Steinbeis Swipe.
From a systemic standpoint, transformation requires a system to move on from its established states in order to seek a new state of equilibrium. This period of instability – i.e. the phase of transformation – is stimulated by the availability of emerging technology hand in hand with new social dynamics. Together, these factors place pressure on a system and initiate a transformation process. As a rule, the technologies that come into effect during this process are not necessarily new, but they have reached a certain stage of maturity or readiness and are available on the market for an attractive price. This paves the way for technologies to converge and be used economically in a variety of fields of application. New social challenges also act as catalysts for change, as witnessed for example with global warming, which stems from the fact that we have spent 300 years establishing an economic system that is proportionally over-dependent on the mining of natural resources. After a delay of a number of decades, our tremendously high consumption of natural resources has resulted in global warming.
A spanner in the works of sustainability
The race is on to reach consensus under a banner entitled sustainability, which has become a kind of leitmotiv for a new and stable system. Typically, reaching consensus requires broad-scale change on a societal level. When pressure mounts to make changes, there is always resistance and a moment of inertia among organizations and individuals, who fear that (compared to the current situation) things will get worse for them after the transformation process. As a result, transformation generally takes place against a backdrop of defensive battles, the root cause of which lies in fears for the future harbored by a whole host of stakeholders. Their aim is to put a stop to the transformation process, or at the very least slow it down.
On a fundamental level, if there’s one thing that holds true for the process of transformation, it is that there can be no change without changing yourself. Every individual, every industry player, and every stakeholder that was part of the previous system – and thus contributed to the established state of equilibrium – must change themselves if they want to remain relevant stakeholders within the new system. The alternative is to quit the system, which for companies would mean disappearing from the market. Former giants like Kodak, Alacatel-SEL, Loewe, and Nokia have tasted the bitter pill of experience in this area. For whole economies, this can mean relinquishing relative strengths in global markets and sliding back into mediocrity.
One thing that is noticeable during a transformation process is that people are quick to notice that something needs to change, but many stakeholders either lack the ability to self-reflect or this ability was lost during a period of success carried forward from “the old days.” People often preach about change, but they still don’t do enough to affect that change. Why? Because there’s no change without changing yourself.
Old paradigms should be thrown overboard
So what does this all mean when it comes to sustainability? I consider a system to be sustainable if it can keep itself stable over an extended period of time. The term sustainability often comes up within the context of how resources are used. This results in stakeholders in business, science, academia, and politics establishing a system along the lines of a circular economy, only converting resources and merely “managing” – without significant net resource consumption.
The critical issue here is that there is a particular tendency among politicians – but also numerous companies – to use sustainability as a collective expression and think too much in linear terms; the complexity fueled by this transformation process is only grasped on a rudimentary level. Investing too little energy into discussing paradigms that will no longer play a role in the future system only leads to people clinging on to outdated ways of thinking. That thwarts future potential, resulting in things like companies defining digital competences for departments that will no longer exist after the transformation process – or arguments about whether the organization needs a digital transformation unit or a digital transformation officer.
Such models are only effective if people are given a mandate to drive change across the entire organization and they’re in a position to assert themselves, despite resistance, and overcome the ability of established departments to dig in. If this doesn’t happen, digital transformation is positioned “alongside the existing organization” so that wherever possible, everyone within the organization can keep doing things the way they always have done. And the digital transformation unit is allowed to work with them “in an advisory capacity.”
Two inseparable concepts: sustainability and digital transformation
Sustainability, digital solutions, and digital transformation have to be discussed and tackled as part of one and the same process. When it comes to politics, this affects everything from sustainable approaches to taxation law to new arrangements affecting healthcare, social services (pensions, sickness), and even establishing clear definitions for infrastructure services offered to the nation by the state – upon which an economic system can then establish itself. Currently, there is no prospect of this happening in Germany – neither on a federal nor on a state level – although a number of moves have been initiated on a European level (namely in areas that individual states play no active role in).
It is a similar picture in business. For example, for the automotive industry, “sustainable” could mean that an organization will have to step back from the paradigm that customers want to own cars and thus the number of vehicles sold will nosedive – reflecting a leitmotiv that creates a different identity and is inward-looking. Companies would no longer talk about how many cars are sold. Instead, they would focus on things like the number of miles driven during the lifetime of a vehicle. A paradigm shift of this nature would place tremendous pressure on companies to change, across all areas, but maybe after making that change carmakers would even be more profitable.
The state government of Baden-Wuerttemberg has made a somewhat clearer commitment to the issue of sustainability than it did until now. It remains to be seen, however, whether it possesses the power to embrace and embody this transformation process within internal structures such that it transfers to the economy in Baden-Wuerttemberg and triggers the corresponding impetus to affect change. If it does, enterprises in Baden-Wuerttemberg could succeed in becoming key stakeholders in future value creation networks and thus attract strong forces of value creation to the state. If it does not, value will be created in other parts of the world. Whatever ultimately happens – there can be no change without changing yourself.