Germany is facing a massive disruptive change in its energy system. The speed of the transition from the fossil fuel and nuclear energy age to the renewable energy age has been significantly accelerated after Fukushima and the government´s decision to phase out atomic energy within the next 10 years. Therefore, traditional German utilities must make far-reaching decisions to ensure long-term competitiveness. For that purpose, they need to define the future strategy and agree on the proper steps for its implementation. Over the next 20 years, decentralized renewable energy solutions, cost-intensive offshore wind parks, and the decommissioning of centralized conventional power plants will need to be planned and implemented. However, like in other industries, there is a tendency to deal with various decision problems in isolation, without focusing on the big picture. Thereby, it is often only vaguely defined what and how it should be achieved. Furthermore, the search for alternatives is based on traditional thinking, which is likely to mislead in such a novel and unprecedentedly disruptive change.
Value-focused Thinking provides a holistic approach. It requests that companies identify their values, i.e., what they care about, and translate these values into objectives (what should be achieved). The objectives are then used to systematically create alternatives and identify decision opportunities (how this could be achieved). Generally, this procedure yields alternatives that the company was previously unaware of.
In the case example, Prof. Ralph Keeney (Duke University) and I had discussions of approximately one hour with each of the 19 employees of a large energy supplier (with a turnover of over 20 billion euros), including all members of the management board. The goal of each discussion was to assess all thoughts of each individual that might be important for creating strategic objectives. After discussing each individual’s thoughts, we converted their ideas into objectives. The initial step was to combine the 19 individual lists. This combined list encompassed approximately 450 total objectives. Next, we organized the objectives into categories that address different concerns. In this process, we had to develop the categories and then assign individual objectives on the list to the appropriate categories. This process is conducted iteratively and hierarchically, resulting in a comprehensive network of strategic objectives (NOSO).
In addition, a significant benefit of the entire process was that the horizons of the interviewees were broadened through the interviews. In the project involving the German energy provider, this benefit is illustrated by a quotation of the personal assistant of a board member who was listening in the interview with her superior: “I have been working for him for half a year, but I have never heard him thinking and arguing in such a broad manner”. Furthermore, the CEO said after the final presentation: “The clear structure of objectives helps me to understand my company better and will certainly be helpful to communicate my idea of my company to my employees as well as the Board of Directors.” This shows the level of stimulation that such a procedure can create.