Today, I am very honored to meet em. Prof. Dr. Günter Müller-Stewens, Professor for Strategic Management, University of St. Gallen. For me, Günter is a thought leader providing fundamental new ideas on how we need to rethink strategy as a fundamental skill for leaders in order to create healthy organizations serving society beyond firms’ profit. He is my personal role model for inspiring a new way of thinking that moves beyond an “either-or” mindset to a balanced, integrative productivity and humanity perspective in management – especially in the way he approaches it: with incredible humility, thoughtfulness and respect for all actors involved. In this interview he reflects on his new book «The New Strategist», strategizing in times of uncertainty, on organizational resilience, purpose and how to keep an open mindset, yet have the courage to stand up for own values.
Dear Günter, first of all thank you so much for taking the time for this Human Facts meets. We have been hit quite uniquely by a time of increased uncertainty and instability due to geopolitical shifts and crises. What does this mean for any kind of strategic foresight and planning in organizations? Isn’t it quite helpless to try to define a strategy in such changing environments?
Günter: Yes, there is no doubt that we are in times of great uncertainty. One does not know how it comes. There are also no probability distributions as in the management of risks. But I think that this is exactly when strategic planning is of particular importance. Strategic work is thinking in options. Now it is worthwhile to develop scenarios, to think through alternative development paths. Even if none of the scenarios should come true, one is better and faster able to perceive how the future will develop.
It seems that many companies try to muddle through these times hoping for a «back to normal» at some stage. What do you think about this kind of strategy and its chances of success?
Günter: I do not think there will be a «back to normal» what is understood as a return to the way it was before the crisis. The structural change that is already taking place anyway is only accelerated by the crisis. Take, for example, the increase in online trade. Now it makes a lot of sense in these times to start a lot of experiments, e.g. testing new business models, to learn as fast as possible based on the feedback from the markets. A number of companies have set up think tanks, venture labs and the like as breeding grounds for such experiments.
When speaking with managers in my professional context, I encounter very diverse ideas about what strategy is and depending on this, some managers even show a great aversion to it. What does strategy and strategizing mean to you?
Günter: Yes, strategies are often associated with a lot of aversion. Not only the content, but also the way they are developed. For me, it is important to bring the subject of «strategy» down from its «high throne». What is important to me is to work on strategy on site, where management responsibility is located in the organization, free of hierarchy, and involving all relevant stakeholders. In a lightly-moderated and methodically-structured form, central strategic questions have to be discussed discursively. These are questions that may seem trivial to us, but are not. Questions such as «What are we actually selling in essence?», «What exactly is the customer problem we want to solve?», «How do we differentiate ourselves sustainably?», «What are our strategic priorities?» Shared understanding is needed for the answers to such basic questions, otherwise there is not enough focus. Such basic questions must also be asked again and again, because more appropriate answers must be found in a changing context.
Is a good strategist one that adapts quickly or one that rethinks the future?
Günter: In my opinion, a successful strategist is one who is aware of the basic assumptions on which his/her business model is based, and who is able to critically question the validity of these basic assumptions again and again against the background of a changing business environment. Such a typical basic assumption in banking is, for example, that a bank is needed for financial transactions. We now know that this is no longer the case.
You recently successfully launched your new book «The New Strategist» («Die neuen Strategen») in which you reflect on what the new challenges are for strategizing in firms and why you think it should become a fundamental skill for all leaders. Could you please share with us what you think are the major shifts leaders need to consider in order to do good strategizing today?
Günter: In looking for what makes a modern, professional strategist, four challenges in particular stand out that strategists will have to meet to keep up with contemporary developments: (1) a stronger consideration of meaningful elements (like a widely shared purpose) as the engine and differentiating factor in businessdevelopment; (2) a comprehensive perception of social responsibility, to do justice to the changing expectations of relevant stakeholder groups; (3) a far-reaching use of advantage potential derived from collaborations through the structures of cross-cutting networks within and outside of the business; and (4) a more intense examination of technological change in order to gain deeper insights into resultant opportunities and risks.
You are one of the few strategy experts who has the courage to claim that a normative humanitarian philosophy is fundamental for every business. What experiences lead you to come to this point, against the longstanding view it should be a non-normative discipline?
Günter: Over the last two decades, the profession of manager has massively lost its reputation in the eyes of the public. In Germany alone, for example, one thinks of cases such as Deutsche Bank (cum-ex transactions), VW (diesel fraud) or Wirecard. Greed for money and power has given capitalism an ugly face in some places. Less spectacular, however, is the increasingly felt deprivation of the meaning of work in many companies. People are running after every higher performance target, which remain without justification for those who have to carry them out. The result is the impression of a hamster wheel.
Here it is necessary to look for alternatives, such as a social or more humanitarian capitalism.
A guiding principle could be a humanitarian philosophy of the company, meaning a philanthropic philosophy focused on people and their social relationships based on the basic value of universal human dignity, which supports a person’s growth into a self-determined personality. In doing so, we distance ourselves from the perception that people are only motivated by the desire for material wealth. Each person also has a desire for dignity and equality. A company wanting to benefit from engaged employees should think and act in a way that is based on the understanding that it exists to serve people or society, and that the strategists act as stewards for this task. We are all stewards of this world during the time that we are part of it.
In the last months the word «resilience» has gained new popularity. What characteristics does a company need to truly be resilient during times of shift and crisis?
Günter: We all know that in an economic development there are always downturns, recessions and corrections. Common sense teaches us that we have to build up a cushion in good times to survive in difficult times. Some managers seem to have forgotten this. Supply chains, for example, have been happily trimmed for efficiency, so that now you have the cheapest, but stupidly only one, which has now failed. Redundancies to cushion default risks were eliminated due to short-term oriented management decisions. Take TUI. Under pressure from the capital markets, all businesses except for the tourism business were sold off. All risk diversification was abandoned. Now you are only standing on one leg and the taxpayer must save the company.
The same applies to Lufthansa. For a company that currently has a market capitalization of just around 5 billion euros, four states have already given 9 billion euros to rescue the company because it is considered to be systemically relevant. This is quite a paradox. If one then looks at the liquidity of the Lufthansa Group just before the pandemic began, it consisted almost exclusively of income from tickets already paid for but flights not yet operated. Why were cushions of liquidity not built up in good years for bad years? The much-scolded Ryanair, on the other hand, had a much larger cushion of «real» liquidity because they knew that no one would classify them as systemically relevant.
This means that many strategic decision makers should fundamentally rethink the criteria by which they make their decisions.
Particularly the younger generation has become quite suspicious towards large business organizations, how they operate and how they are managed. What new kind of organizational models do we need to (re-)build trustworthy and healthy business organizations? What would you recommend business leaders to do – or stop doing - to regain the trust, particularly of the younger generation?
Günter: Of course there is no such thing as the younger generation. There is also a wide spread of their needs. Nevertheless, some rather general statements can be made.
First of all, I think that the older generation really needs to take a lot of time to listen carefully to the younger generation in order to better understand what moves them and what they are looking for. From there it is then necessary to consider how they can be better integrated to make the company «younger»: For example, by (temporarily) involving them in certain committees in order to bring in their perspective. Or through reverse mentoring, in which young people coach the coaches. Experience is only of value if the future will be like the past. At the moment - with the Corona change accelerator - it does not look like that.
Why many of the younger generation shy away from large companies is that they have the impression that they are bureaucratic, not very entrepreneurial, hierarchical, power-political and often somewhat devoid of meaning. Many therefore prefer smaller organizations, of course start ups, or even NGOs and humanitarian organizations where they can make a clearer contribution to society. If large companies do not embrace this change in attitude, they will lose a lot of talent.
I know that you do strategy development with monasteries. In which way did this impact your thinking and is there something what business firms can learn from monasteries?
Günter: Monasteries are organizations which - similar to humanitarian organizations - usually do not have to complain about the missing of a «shared purpose». Especially in difficult times - in which many monasteries currently find themselves - this «shared purpose» gives them orientation and support. In contrast, many companies have lost their «shared purpose» through a too pronounced short-term orientation on the capital market. Their primary goal is then only a few key figures, such as return on equity. In this way, they deprive their organizations of the long-term spirit of life. In the meantime, many of these companies realize that they have lost something valuable here. But it is not so easy to find one again that is more than just waste paper.
For the past 11 years, the mission of Human Facts has been to help firms in transformation processes to support and build-in a balanced and integrative view of productivity and humanity. To be honest, this sometimes feels like fighting against windmills as profit and efficiency decision criteria still overrule any other values. Do you have any recommendation for consultants on how we need to change to be more helpful?
Unfortunately there is no simple answer. It takes a lot of patience and humility. And there will probably always be managers who act irresponsibly and immorally. That is in the nature of humankind.
The lever is probably there, that you ask managers if they think they are doing «the right thing». Often people feel already that it can't go on like this (e.g. with the excessive consumption), but they have not yet found a way for themselves, or they don't dare to go for it. This is where support should start. For example, by telling stories about others who are already on this path. Stories are often more effective than postulates.
I really think that the future belongs to those who are able to lead authentically, i.e. in harmony with what they want to stand for.
We all know changing against a contemporary norm isn’t easy – not as an organization nor as an individual. Looking at your own long and successful career, I was always very fascinated and inspired by your constant openness to new insights and learning, including a readiness to abandon your own prior assumptions. What was a recent learning that required you to abandon some of your assumptions?
Günter: I always thought that in the long run we would develop into an increasingly egalitarian world (reduction of poverty, distribution of wealth, educational opportunities, etc.) At the moment there are many arguments against this, which is disappointing.
What helped you most to keep up this incredible openness during your longstanding, successful career?
Günter: I don't know if I am really as open-minded as you say. What drives me is curiosity. New things or views make my life richer. But conversely, the virtue of serenity is also very important to me. To learn not to let myself be driven crazy by everything that is supposed to be new, but to learn with a sense of proportion, to preserve what is valuable, and at the same time to try something new. It is all about finding the right balance. As a lecturer, you are occasionally confronted with the reproach that a text to be read is already a few years old. But some things are already 2000 years old and still valuable to us.
Human Facts lately launched an initiative to collect questions that have had the power to change one’s life or move one’s life onwards. Would you share the question that you are grateful for because it made you change or at least move in life?
Günter: What are my often implicit assumptions on which my thoughts and actions are usually based?
Thanks so much - anything else you would have loved I ask you?
Günter: No, thank you. You made me think about a lot of very fundamental things. Thank you very much for giving me this chance. I hope we can continue our inspiring collaboration for many more years.
Thank you so much for your time and sharing your thoughts, Günter. As always it was very inspiring! I am looking forward to continuing to hear, learn, exchange and write with you! Stay safe and healthy!
*) Günter Müller-Stewens just recently launched his new book «The new strategist. Shape your organization and stay ahead of change», (German version: «Die neuen Strategen. Gestalter der Unternehmenszukunft») proposing how a modern strategy and strategizing in firms should look like.
I had the privilege to meet Günter 15 years ago at the University St. Gallen during my PhD studies. He agreed to supervise my dissertation thesis in the field of Strategic Management on building organizational social capital. Since this time, I have had the pleasure of countless inspiring exchanges with him and to publish together several articles around why we think building organizational social capital is a relevant asset for companies in a networked economy.