Jan Peter Schacht, a transformation manager with over 30 years of experience in management consulting, has specialized in sustainability in recent years. In this interview, he talks about his career, the challenges of organizational consulting, and why the sustainability transformation is indispensable today.
The Role of a Transformation Manager
Transformation Manager: What is that? What’s your career background?
I started out in traditional management consulting 30 years ago. My focus was on organizational consulting: post-merger integrations, reorganizations, restructurings, and insourcing and outsourcing. Everything was always very process- and structure-heavy. It was all about creating organizational charts, defining the endless number of processes and interfaces within the new structures, and all the associated figures: capacities, time required for process steps, process costs, and so on. For me, as a structured person, this was very exciting, but at some point I asked myself why many of these projects didn’t achieve the desired goal. This really got me thinking.
When did you start thinking about sustainability transformation?
I was frustrated that many consulting projects didn’t achieve the desired success. In the early 2000s, I had the opportunity to meet David Nadler through my consulting firm at the time, Oliver Wyman. Together with Harvard professor Michael Tushman, he developed what’s known as the Congruence Model. Put simply, this model states that any organizational change must address four dimensions: structures, the way of working (processes), as well as people and culture.
He depicted the congruence model as a diamond, with culture at the top. Consequently, culture is the most important element of any organization—and nothing can be achieved without it. Another key insight is the realization that there can never be a “best” organization, but only the “best fit” across the four dimensions. This “best fit” is not quantified by a number but is determined solely by the results achieved. Here, too, all four dimensions are taken into account: Efficiently running processes with good scores on employee surveys, coupled with high customer satisfaction and strong business results, would be one possible indicator.
What exactly does that mean?
Whenever changes affect organizations, they should be considered and implemented across all four dimensions. It is therefore not enough to simply send emails dictating the new way of working. Among other things, people need to understand why this new way of working benefits them, the customers, and the company. It will require thorough explanation that not everything in the past was wrong and that, after careful consideration, leaders have decided to implement this change. The attitude and communication style of leaders play a crucial role in any change process—a role that is almost always underestimated. Successful change has a great deal to do with communication, explanations, and the attitude and behavior of leaders.
Focus on Sustainability: The Decisive Turning Point
Specialization: Why did you choose to focus on sustainability?
In my opinion, sustainability is the most important issue of change for the current and all future generations. With the onset of industrialization, humanity began to upset the balance that had existed on our planet until then. We have disrupted the interaction between the atmosphere, lithosphere, and biosphere—an interaction that had remained largely in balance for millions of years. We’ve been paying the price for this for many decades, and we know the consequences: climate disruption, environmental pollution, and the destruction of biodiversity, to name just a few. We have recognized this reality for many years and therefore need to change course. Since this change has so much to do with people’s attitudes and behavior, I find it so fascinating. I am also intrinsically motivated.
Sustainability: A Definition and Its Meaning
How do you define sustainability?
This is indeed a very interesting question. I always ask this as an opening question in my projects: “What is your definition of sustainability?” Answering this question requires an initial and serious engagement with the topic of sustainability. At the same time, we should be aware that the term “sustainability” is, in and of itself, somewhat overused and evokes suspicion or even rejection among people. I would therefore prefer that we replace “sustainability” with “impact” and “relevance.” If I—as an individual and as an organization—want to create impact and relevance for a more sustainable world, then I’ve got it. That’s when the definition I like to use makes the most sense: “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Incidentally, this definition comes from Gro Harlem Brundtland and dates back to 1987.
Why is sustainability such an important topic of transformation in the first place?
Precisely because we have created an imbalance, and if we continue on this path, the world as we know it will no longer be livable for our children and their children. At the same time, we know that we do not want to jeopardize our prosperity or reduce it. Either would lead to global social upheaval, the consequences of which are impossible to describe. That is why I always see a shift toward greater sustainability as being in harmony with economic growth.
There are many stakeholders demanding more sustainable behavior from companies. Legislators are currently the most prominent drivers of these demands (Green Deal, Taxonomy, CSRD, ESRS, etc.). Since all companies are part of supply and production chains, everyone is now looking at the behavior of their upstream and downstream suppliers, as well as at customers and the value delivered to end-users. What happens to the product when it is no longer needed? Another aspect that should not be underestimated is employees, who are more eager than ever to work for a company that makes a real impact and thus demonstrates its relevance. Last but not least, banks are also increasingly examining the extent to which their corporate clients are moving toward sustainability. This is because, within the framework of the Green Deal, banks have been identified as the primary driver of change toward sustainability and must ensure that their clients adopt more sustainable practices.
How long will the transition to greater sustainability take?
The transition toward greater sustainability takes a very long time and never really ends. This insight—which is both scientific and business-oriented—should guide every company through this transformation. Precisely because this process is never “finished” and because the issue involves environmental, social, and business aspects, every company should consider getting started as quickly and thoroughly as possible. The shift of the business model toward sustainability will be an ongoing priority for every company. It should therefore not be viewed as a regular project, but rather as a mindset and way of thinking that is absolutely essential to day-to-day operations. This is, so to speak, inherent to the system. All business decisions, processes, products, and developments should align with the company’s own definition of sustainability and the associated sustainability goals. However, I would like to emphasize that this transformation should always be carried out within the framework of current economic parameters. After all, without economically successful companies, society becomes destabilized—which is not a desirable outcome.
How should companies approach sustainability?
I recommend that companies develop their own individual sustainability agenda. This should be based on the methods of stakeholder and materiality analysis—as well as a materiality matrix—specified in regulatory frameworks, and the derivation of the company’s own sustainability goals from these. It is always advisable to align this agenda with common frameworks and standards—such as the UN SDGs, SASB, TCFB, and SBTi—because their thoughtful application demonstrates a substantive and intelligent approach to the issue, as well as the fact that the commitment to change is genuine and that greenwashing is to be ruled out.
Key Levers in the Sustainability Transformation
What are the most important levers in the sustainability transformation?
First and foremost, establishing a company’s own definition is crucial. This definition should be unanimously supported by the board of directors or executive management. After developing a vision and mission statement outlining how the company intends to position itself in the future with regard to its own impact and relevance in terms of sustainability, the next step is to examine the relevant regulatory methods: stakeholder analysis, materiality matrix, and setting the company’s own sustainability goals, etc. Experience shows that this process can be completed in 3–5 months with the appropriate commitment from all stakeholders. The result of this process is a solid sustainability agenda that will serve as the basis for sustainability reporting in accordance with CSRD/ESRS and for both internal and external communication. It also provides banks with solid evidence that the company in question has thoroughly addressed the complex issue of sustainability. Banks will recognize this positively for their own ESG ratings and, in the long term, respond with more favorable terms.
Sustainability Transformation: Cost or Opportunity?
Does the shift toward a more sustainable business model entail only costs, or are there also positive aspects?
It would be a fallacy to claim that the sustainability transformation will not incur any costs. These costs will become apparent in the first few years and, as with any change process, must be factored in. However, they can certainly be kept at a manageable level through a rigorous and well-managed approach. In particular, the question of whether the company merely wants to be “regulatory compliant” or aims to position itself strategically for sustainability is crucial. In the former case, the short-term costs are certainly lower, while the long-term costs will significantly outweigh them. The entire legally mandated framework of the taxonomy—as well as the requirements of all stakeholders—is so demanding that focusing solely on regulatory compliance will backfire in the long run, resulting in persistently poor financial performance.
And last but not least: What have you personally done to become more sustainable?
That’s a very good question: I first took a look at my ecological footprint and drew conclusions about my lifestyle habits from that; among other things, “repair, reuse, recycle” have become important considerations for me. The same goes for questions about travel and eating habits. Do I need to buy new things, or will the old ones do just fine? When I do buy new things, I think about what happens in terms of long-term value. Quite simply, I’m happy when I see that our household trash is decreasing while our organic waste is increasing.
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