Bosch: climate targets met by breaking old think
At Thinking the Unthinkable (TTU) we work to inspire leaders on how they can change, innovate and adapt. A great way to do that is using examples of success.
Here we profile Bosch, the German multinational engineering giant. They have significant successes to share, which many leaders can be inspired by and learn from.
Torsten Kallweit is the Chief Technology Officer for Bosch Climate Solutions. In this interview with TTU’s Founder and Co-Director Nik Gowing he details remarkable achievements.
Bosch met new emission targets earlier than planned. The board backed a dramatic scaling up of research projects with far more enthusiasm than expected. The resulting impact on staff commitment and enthusiasm has been remarkable. They were urged to “drive by themselves” with no fears of failure. So Bosch “opened the box and gave them that playground”. The result was “win-win”.
This is an edited version of the interview at Climate Action’s Energy Transition Summit on 25 May 2021.
TK: We started a programme two years ago for our more than 400 locations worldwide to be climate neutral by the year 2020. We also announced that we wanted to spend an investment of 1 billion euros to the year 2030 for energy efficiency. How did we do it?
We have a programme consisting of four levels.
First is the most important one: energy efficiency. The kilowatt hours that we don’t use at all. It is saving resources and CO2 emissions. So at the end it’s also saving costs for sure. And this is what we are interested in.
We planned to reduce our energy consumption absolutely by minus 20% compared to the base year 2018. And this is a volume of 1.7 terawatt hours. You can compare it with the CO2 emissions coming from the electricity consumption of private households in four huge German cities like Stuttgart, Hamburg, Cologne and Berlin.
So, you see, it’s a very huge amount of energy that we wanted to save. But this is not enough. We will still use energy.
The second level is renewable energy. What is important for us is to add new additional capacities to the market. On the one hand, by using our locations, and our roofs. But also to make purchasing agreements for wind farms in order to get higher volumes. What is very important - just to emphasise again - this is additional capacity that we bring to the market.
The third level is the electricity budget. It is very simple. You can do it, but you just have to do it. The only problem is how to do it in more than 40 countries all around the globe. The wonderful news is that in a lot of countries, not only in Europe, you can find green energy markets. The energy is available. So you just have to make the contract.
The fourth level is for all the things which are unavoidable over a short period of time: we have to think about a carbon offset. But, because all the other three levels were so successful in the last three years, we were able to reduce this amount to 20% of the old CO2 emissions that we had in our base year 2018. We want to reduce this further by a minimum of 15%.
NG: You met your deadline well in advance of the timing you set?
TK: Yes we did. We are carbon neutral for these four levels. We are much better than we planned in our long term plan to 2030. What’s very important is that we are not just saying something. We also validated this achievement by an external auditing.
We love it: give us more
NG: One of the fascinating things is the board process you went through in order to get all this approved. Tell us what happened when you put these proposals to the board, expecting them to be rather lukewarm about spending so much money. What was their reaction?
TK: In our project team we were not really sure what might be the reaction of our board members. Do they really want to give us feedback on whether they want to go this way; that they want to spend some money on this?
The reaction was always very, VERY positive. And the board feedback that we got in different steps was: is more possible? So we started with a programme for climate reduction. We started with ideas to reduce 30, or 50, or 60%.
In the end there was something like a race with our management. Is it possible to become carbon neutral? And what might be the business case behind it? It was absolutely the different reaction to what a lot of people would suggest in such a situation. I encourage everyone to go the same way. Just to ask. Just to make some suggestions. I’m sure that a lot of managements and boards will also give positive reactions.
NG: So you first proposed 400 projects which became 2000. Almost overwhelming. Then there is the issue of the speed, the rapidity with which you got the money, and were told to get on with it fast.
TK: Yeah. Before we started the programme we had a long experience in energy efficiency. We had an average of 400 projects for energy efficiency per year. With our new programme we were able not just to double it. It was a factor of five. We now have more than 2000 projects which are active that people are working on. It’s like a competition.
No central planning: cash in just four weeks
We don’t plan centrally for the whole process. We use motivation, the ideas of our employees at the locations. They can make suggestions for improvement, and for saving energy. When they send us their ideas we promise feedback in four weeks, and in a positive case to also give them the money in four weeks. So that there’s not really a timeframe between an idea, and the start of the implementation.
NG: But one of the remarkable things is what happened to the mindset of employees. Engineers don’t like to fail, for example. Were they being encouraged to take risks, to think differently? Has that really endured as a change of mindset?
‘Failure is allowed’
TK: Yes, for sure. I think two things are very important.
The first is that there’s a clear management commitment that failure is allowed. It is really a little bit strange for a technology company that you have a failure culture. But this is necessary. Otherwise you don’t get the new ideas and you’re not really innovative.
The second thing that we have learned is that people are motivated. The only thing that you have to avoid is the demotivation of the people. When you just take what is out there, tell them to be creative, give them the chance and then get a positive feedback: it’s the best thing you can do.
NG: Were you thinking that this is quite a risk, a professional risk you’re taking? Have you been almost surprised at the change in culture, the change in mindset, and the result has been so very positive?
TK: No, I don’t think that it is any kind of risk. I just give you some figures on feedback from employees. We have acceptance level of more than 80% by the upper management and the middle management of the company to the overall procurement strategy for carbon neutrality. What is more, our employees show positive feedback of 85% saying: yes, you’re on the right way, this is a great project, we have to support it. And a lot of initiatives come out of the different locations. The people get active, try to participate in this programme and say “let’s take part. It’s really great to be a part of it.”
Win-Win situation for climate
NG: I’ve got a question here from Dirk Neversteam of Neversteam Insights. Do you expect a positive life cycle return? Would you expect in the end a financial cost to becoming carbon neutral?
TK: Yes, we think so, we are convinced of it. We think that we can save the money that we spend. I talked about how we spent on energy efficiency for the timeframe of the next year. So at the end, we have a Win-Win situation for the climate, and also for the money in our pockets.
NG: I can imagine other companies and other corporates - both large and SMEs who are less confident; who have cash liquidity challenges in this very difficult time; who say this has to be a cost, we cannot see a benefit initially, despite the imperative of Net Zero solutions. What is your message to those who are more anxious, who are more worried about whether they could survive?
TK: We are convinced it’s more expensive to wait, than just to start and do it. The more you go into the details, and the more you focus on the main parts of the business, the more you find business cases behind it. You’re not just seeing the risks, you also see the chances for your business behind the transformation we see now in our environment. It will happen if we change or not. Therefore our position is let’s take the chance. Let’s start today, and do the best of the situation that we have.
Leadership in a time of radical uncertainty is not about drawing up detailed plans and setting target goals. It is about creating a ‘dream,’ a vision of where to travel together, how to do it, and the different responsibilities to get there.
The highest human motivation comes from being on what we call a ‘loveable journey’. Where we are driven by the ‘dream’ and at the same time we also feel loved or appreciated for our efforts.
That is why purpose is such a strong driver in our modern society. It creates a space for people to unfold their potential in a different way.
The idea that a purpose or a ‘dream’ has to be at the heart of leadership is certainly not new.
The best summation of it comes from almost 100 years ago. ‘Grand will’ is how philosopher Martin Buber brilliantly defined purpose in his book, I and Thou, in 1923.
Buber called it: “a state of being, where our life is naturally infused with meaning, and where we sacrifice our ‘puny, unfree will’ to our ‘grand will’.
Buber’s concept of ‘grand will’ also gets right to the heart of what these days is called ‘meaning driven motivation’. The ‘Dream and Details way of travelling’ is how I and Jim Hagemann Snabe summed it up in our book, Dreams and Details, published in 2018. It is a contemporary leadership model drawing on and developing from decades of great thinking.
Leaders must listen first
Now, Jim and I plan to go even deeper into understanding the motivations and human drivers in their next book. It has the working title; Unleashing Human Potential. It will examine the ‘magic things’ that happen, sometimes suddenly and unexpectedly, when people are empowered to develop themselves, and to unfold their potential.
The book aims to show how do they do that.
Motivation and purpose are key if humanity is to have any hope of tackling the climate emergency and to curb the pandemic. It has to be done fast and across so many aspects of our lives. There is so little time left. Otherwise, humanity will be in a very bad situation.
There are so many innovative management methods such as working in Sprints and with Agile management tools. But now, given the huge scale of the challenge, arguably the biggest humanity has ever faced, it is necessary to go much deeper into understanding what drives motivation and the fundamental human drivers.
Throughout my career as an athlete and top coach I have been fascinated by the drivers for high performance for teams and individuals. In the Dreams and Details methodology that Jim and I have devised we encourage leaders to listen to all their employees, to listen to the board, and to listen to their peers.
It is essential that leaders listen first and then determine the journey in the light of what they have heard. That’s leadership in the sense of followership.
Having listened and learned, the leader determines the inspiring Dream linked to meaning and purpose. They set the direction, and define the goals for the journey, and the right mindset that is needed to achieve it.
Leaders then need to create what we call “a bridge” outlining the mindset and the framework, so they can ask to their employees; “do you want to join us?”
We encourage leaders to tell their teams: “If you’re going to do that, we’re going to help you, we’re going to train you, we’re going to make you the best possible person to achieve our ambitions. When you are like that, you will be a totally different person, with a new, greater potential. And we will help you and love you for that.”
That is Servant Leadership. It is showing a leader’s will, love and their ability to serve and sacrifice.
Seek permission to influence people
It may sound risky, but I learned its immense power when I was Denmark’s National Volleyball Coach. I was lucky to be head coach twice. In 2002, Fred Sturm, a great American coach took over my job after I had done it for a decade, quite successfully I thought, using conventional coaching.
Fred Sturm is a very experienced and successful US coach. He has a very unusual approach. During Fred’s time as Danish head coach, I served as his sports director. In one of our first meetings, he brought me a gift. Fred said: “Mikael, I think you should read this book. It would help you a lot. It is called, The Servant, A Simple Story About the True Essence of Leadership.”
I got the book and read it immediately. It was written by James C Hunter, a US management specialist, in 1998. He was inspired by Robert Greenleaf, who first defined Servant Leadership over 50 years ago. It still has huge relevance today. It has transformed my thinking.
Hunter tells the story about a guy he calls John Daily, who has problems in his business life. His wife is on the brink of demanding a divorce. She tells him as a last resort to go to a seminar in a monastery.
So, he signs up and he is put in a group with four other people; a preacher, a teacher, a soldier, and a sports coach. The Monk running the seminar takes them on an intense learning journey over two weeks to understand deeply Servant Leadership. To make the storyline credible, the fictional monk, Brother Simeon, was previously a Fortune 500 executive with decades of experience in business transformation – like the author himself.
Robert Greenleaf’s original message is that, if you want to influence other people, you shouldn’t try to be a powerful leader - which is what I had been trying to do as a young leader. I learned that, instead, you have to be looked upon as an authority. That way you are given the ‘permission’ to influence people by being a Servant to the team. That’s what Fred tried to help me understand.
When I was made head coach the second time, I understood that you have to put the needs of the team first. You must focus your leadership on helping people to develop and perform as highly as possible. I saw for myself that this is transformational in the leader’s relationship with their team.
You have authority NOT because you have power that you can impose simply by dint of being the leader, but because the team members choose you - because of how they perceive your actions. They confer on you the authority and the right to influence them. It is hugely motivating and empowering.
I have further developed my understanding on this form of motivation thanks to two other US academics; Richard Ryan and Edward Deci. In their book, Self-Determination and Intrinsic Motivation in Human Behavior, published in 1985, they developed what they call self-determination theory (SDT).
As with servant leadership, SDT describes autonomy as a powerful motivator. In the best case, autonomy is done in the context of loving and appreciative relationships.
The meaning of life is to be loved
A person’s superiors, colleagues, also their family and friends acknowledge who they are, and what they’re doing. They love and appreciate them for doing that. This would be the best position for every human being to be in during their lifetime, both in the workplace and at home.
If we combine SDT with servant leadership it becomes radically different to the regular leadership model. That’s why we devised the Dreams and Details approach to help leaders to know both how ‘to do,’ and also to understand how “to be.” That is key to unleashing human potential.
It is about taking the engagement and the commitment in totally new directions from the prevailing models where you’re measured in a plan, looked-on as a resource, and only measured by whether you reach your target or not.
We all have had situations where we feel the difference when we can feel the support from those around us. And that was why Ryan and Deci said it is a little bit like ‘mass love’. In other words, it is the love and appreciation from the group or community that you are a part of.
I have been asked the question many times: “What is the meaning of life?” I do not hesitate to answer, the meaning of life is to be loved.
This is an existential need because during the evolution of Homo Sapiens; if we were not loved by our family, if we were not loved by our tribe, or wherever we were part of, it could be fatal.
An isolated human being is so vulnerable and so fragile and alone. So we need to be a part of a group to make sure that we can survive. This is bound deep into our original biology and into our evolution.
You can link everything in modern life to this. When people ask me in a company where I am coaching, “Mikael, what is leadership about?” I always say: “The most important part is that you create growth with love and appreciation.”
It is a life journey where you help your people to be loved on that journey through their life and, in particular, in that part of their life when they are an employee in your company. That is how you contribute to making sure they behave within the company in that way.
It is the ultimate goal of what Ryan and Deci called the motivational continuum. The highest of six stages in the continuum, and what you should aim for, is integrated, meaningful motivation.
How we achieve that highest level of meaningful motivation is what our next book will be about. And how we all can achieve it. We believe that our duty as leaders is to create what we call ‘loving journeys’ for the ones we are chosen to lead, securing their meaning of life.
The ideas in this article will be discussed in the next virtual Afternoon Tea with Nik and Chris to be hosted by Idonea on 23 June 2021.
Interested? Then, please do join us.