VUCA-Energy

A story about a company called VUCA-Energy that is trying to survive in the

VUCA-World.

Introduction

Imagine regionally regulated, fast-paced markets in an environment to be conquered.

driven by bleeding-edge technologies and lots of financial potential. One of those fields

is the energy market. While the economy has to keep running, the climate catastrophe

has to be stopped. Hence, a shift towards renewable energy is unavoidable. The ability

To support the green shift and obtain profits from it is key to success. This is the field

where VUCA-Energy (VUCA-E), a ~250-employee company, is trying to leave a mark and

to be a leader in energy trading, stationary battery storage, and vehicle-to-grid (V2G)

integration (VGI). Striving and surviving are highly dependent on the ability to seamlessly

Change direction while having a crystal-clear vision reinforced by a guiding strategy. The

The following image is a high-level view.

Now that we know the surroundings of VUCA-E, let’s have a look at the initial situation

roughly ~3 years ago, with a focus on the VGI area.

To do so, we want to apply the Org Topologies language and map the Product & Tech

business areas of VUCA-E. We want to see how VUCA-E has evolved over the last years. For

each relevant state, we map and analyze the business before we finally elevate towards

a fully adaptive organization—a reasonable match for the VUCA world.

Initial Situation

The company is not a fresh start-up. The company's organizational structure has undergone several changes.

We start our reflection and analysis of VUCA-E's environment from the phase when its

Relevance and competencies have been proven to their investors. By that time, multiple functional departments staffed with domain experts grew and siloed away from one

another:

The VGI area started as a small research team that built a prototype to prove if the idea

of combining VGI with energy trading is technically feasible. That was the case, and the

euphoria from investors' support imposed fast decision-making and ignorance of modern

concepts in org design, setting focus on the enhancement of expertise. The “classical

Scaling, in terms of specialist teams, was applied (based on bad mental models). This

way, multiple component-based tech teams have been set up. In addition, outsourced

web and app development is shielded away from the rest of the organization to cover

missing competencies within VUCA-E (2023). The Product Management and Technology

Areas within VGI appeared to coexist as separate departments.

Was it working well? The headcount rose and reached 350 employees. A common vision

and mission have been defined, but they were too vague and did not provide a unifying effect to the employees. Teams were not practicing alignment with each other because they did not feel a need. An organization based on a narrow consideration of business parts and

“Natural growth” emerged, which represents the classical directing archetype; see Image 2.

Image 2: Mess of the initial setup: too many roles, dependencies and bottlenecks, burning investor’s money

Spinning VUCA world

The VUCA world did what it does best—it took some unexpected turns, and in essence

The market did not grow as expected. Since the company was very much divided on

the structural and goals level, it struggled to generate valuable outcomes and the financial

Numbers dropped while the headcount reached its peak. That was when the investors

decided to hold back yet another round of investment until the numbers improved.

We could call this “the Big Bang,” which should have been a wakeup call, only that we are

not there yet. The management did what managers do in crisis: they hired an external

consultancy and raised the need for clear responsibilities of each component and task,

and defined single wringable necks. External consultants promoted the management’s

ideas and introduced a matrix organization with a clear hierarchy. In the tech area, they

created multiple siloed sales channels with strictly attached tech teams. The business

Development and product managers continued to function as a separate body, mostly passing tasks to the tech area. Ah, and as the numbers needed to get better, one-third of the employees had to be let go.

Intermediate Situation

VUCA-E ended up in an intermediate state where those external consultants created an

organizational design supposedly optimized to convince investors, yet insufficient to

handle the challenges ahead. You could call it fit for investors, yet not fit for purpose.

In a nutshell, VUCA-E evolved into the following setup (mapped on Image 3):

• Business development separated away from product, separated away from tech. Each department with its own management team

• ~7 sales channels driven by people with individual interests (Project Managers—

• PMs)

• 3 “agile” Scrum teams in tech strictly assigned to 3 sales channels

• Exclusive team of architects to elaborate and drive a target architecture

• The infrastructure team to establish an infrastructure layer

• The security team is making sure the company complies with security standards

• Domain/component owners responsible for the functionality and cleanliness of

• their components, who were members of the Scrum teams. The component

• Owners mainly defined the type of tasks a dev team would pick up (CAPS-3).

  
  

The Scrum Masters warned the management that this organizational design is not

sustainable in a VUCA world and predicted what would happen, but they have been ignored.

(Self-) Education in the field of org design seemed to be unnecessary for the management

because all problems come from bad workers and a tough business environment, where

VUCA-E has chosen to operate.

Image 3: Teams are aligned with sales channels, so the scope of work is limited to capabilities, yet the first signs of cross-functionality and end-to-end skills emerged! Dotted lines illustrate reporting lines, while solid lines illustrate working collaboration.

Challenges and problems in the intermediate situation

... created by the “solution” the external consultants came up with. The five elements of

The Galbraith star model was not aligned in this org design. Besides that, the following

issues arose:

Lack of unified goals

• Misaligned goals for each sales stream (sales KPI)

• Deadline-driven project work

• No companywide strategy

  
  

Siloization & knowledge drain

• Separation of Tech & BD & Product

• Experienced colleagues leaving or being let go

• Lack of adaptiveness and difficulty shifting priorities

  
  

Bad mood & poor motivation

• Colleagues were laid off

• Management decisions were questioned

• Uncertainty within the organization

Management & investors & people-pleasing

• Team Leads

• Top-down decisions

• Old-fashioned management style

Bottlenecks—generated through the following specialist teams:

• Architects

• Infrastructure team

• Security team

• Owners

With the specialist teams, a lot of dependencies with massive alignment needs have been

created. To make it worse, the tasks and responsibilities of these teams were described

as fuzzy. As a result, for some topics, it was unclear who was responsible, and the ping-pong

between teams began. Single wringable necks could not solve the problem, because

Setting individual responsibility per topic does not enable the creation of complete solutions.

It only causes communication overhead, delays, and a potential conflict of interest.

Management and external consultants could not take a holistic and analytical approach

to really solve the problems VUCA-E was facing. The result of the re-Org was ... yet

Another reorganization after 3 months because the VUCA world did what it does best—it took some unexpected turns. How did it impact the organization? The sales-streams with

strictly assigned development teams could not serve VUCA-E's needs any longer

because priorities shifted to other sales-streams that did not have any development

resources at that point in time (still CAPS-3).

Current Situation

Bearing in mind that VUCA-E had a reorganization only 3 months ago, it would most likely

be deadly to the employees’ morale if everything had to be fully reshaped again. Hence,

the strict assignment of Developers to sales streams was lifted so that they can deliver

end-to-end for whatever sales channel needs it the most: this org design is mapped on

Image 4. The ability to deliver end-to-end for any sales channel included a steep learning

curve, but with the right mindset, openness, and courage, this was possible in most

situations.

Yet the current situation is still insufficient when it comes to switching costs. Each Team

has its own product person assigned to it with its own interests. A vision, mission, and

clear goal setting could help to move in the same direction, but as each sales stream has

its own goals, each stream tries to work on its goals first, instead of driving the overall

company's mission. Consequently, the different sales channels must “fight for

resources to get into implementation. Teams that have worked once with a sales channel are very likely to continue working there. In addition, specialist roles such as, e.g., architects

further cemented the drift towards a delivery topology where teams act as feature

factories implementing predefined and specified tasks. This leads to the following:

problems:

• Limited learning—"masked" ownership of sales channels, once there, always

• there

• Local optimizations—teams deliver, yet what they deliver is not always globally

• relevant value

• Specialization—specialist roles have a high reward; generalists are not promoted

• Siloization—a sales channel becomes a silo

• Issues with ownership—no product ownership and fear of expanding ownership on

• tech side (collective ownership is not lived).

• High switching costs—a result of the sum of the above—and a new priority kicked in

  again and needs immediate support, imposing a reduction of scope and delayed

  delivery of other commitments. Given the fact that VUCA-E was forced to switch

  direction more than once and under tremendous switching costs, it is safe to say

  that an adaptive topology should be the target topology. The past has proven the

  In VUCA-E’s business, a delivery topology is not fit for purpose.

Image 4: Organization around several business parts—elevating towards a delivery topology

Future Vision

VUCA-E must be ready to conquer the vehicle-grid-integration sector of the energy

market as soon as the growth kicks in and the land-grabbing starts. Other companies

have massive advantages when it comes to financial resources and manpower. A potential

Technological advantage can be gone in the blink of an eye. Building a technological

foundation organized in a delivery topology creates a false impression of doing the right thing.

thing, because “hey, we deliver,” but as soon as the run starts, it will be too late to switch

the organizational topology because the costs will be too high and the speed too slow.

Hence, the VUCA_E’s future vision is optimized for adaptiveness with low switching

costs, minimal transaction costs, and a clear vision that gives direction across all

departments. Time to …

… MADElevate towards the Future Vision

Have a single empowered Product Owner (PO) who is accountable for the whole product,

a vehicle-grid-integration platform. The PO will get all the support needed from the subject.

matter experts (SME) and product managers (PM). Not only will they support the PO PO, but

they will also align business development and partnerships while driving the vision of the

VGI platform. The software engineers organize as teams that cover partial businesses or

more (PART-3/PART-4). They do not only develop software, but they help form the

product and have close contact with real customer problems that they solve. Goodbye

to the times when they got handed over wannabe user stories every two weeks. Expert

roles are no longer a bottleneck by design because they simply get integrated into the

teams where they will be a huge benefit with little onboarding time. By that hand-offs are

reduced, and a shared understanding of the platform is created. To develop the best

product, the teams and SMEs and PO must work together closely; PO, see Image 4.

In the long run the company could even elevate further and break the borders of the

departments introduced in Image 1. This would mean that all departments, namely

Trading, VGI, and Stationary have a shared vision and VUCA-E is organized with a holistic

product view, where software engineers are real product developers working on the

whole business (WHOLE-3/WHOLE-4).

Image 5: PO as a senior role with decision power, cross-functional teams with integrated experts like architects, traders, data scientists

A case study by Irina Muhkha, Joschka Rinke, and Manfred Slaucher