At the start of 2020, Union Investment’s top management launched a major strategy to bring about the company’s transformation. Dubbed IMMOmentum – combining the words immo, or real estate, and momentum – it included a mandate for significant cultural change within the firm.
“Cultural transformation is a key part of our growth plans,” CEO Michael Bütter says. “Two and a half years ago, we embarked on the ‘IMMOmentum’ project to analyse our overall strategy – from business processes through to transaction volumes – but also to address our culture and values.
“We have a strong DNA that made us successful in the past. But any company that wants to stay successful needs to embrace change,” he says. The resulting analysis threw up some surprises and some important insights – thanks to a unique approach. “Companies often force change with a top-down approach – looking to management first. Instead, we asked employees what they thought we could do better. “Five main areas of improvement came out of that survey, which we are now attempting to measure. The leadership team is also being appraised as we seek to drive improvement by creating a positive feedback loop.”
Community and identity help drive success
The areas where interpersonal change was necessary included factors such as improving cooperation, reducing silo mentality and creating a stronger focus on finding solutions through greater personal responsibility. “We are already seeing improvements,” Bütter says. “We are communicating much more across the real estate division, both between organisational units and across hierarchies. Meanwhile, changes in leadership behaviour have made it possible for individuals to work with more autonomy.”
Other signs of greater “courage” include being more open to new ideas, Bütter adds, “showing a willingness to question established processes and depart from well-trodden paths.” Meanwhile, this process of internal scrutiny has also revealed that community and identity are crucial for success. And although corporate responsibility remains important to the company, it doesn’t preclude colleagues acting as responsible individuals and considering the long-term consequences when making decisions. “Look, it’s a journey,” the CEO says. “We come from a risk averse culture which can be quite slow and inefficient. It’s part of German culture – it’s not just about us or the real estate industry.”
The Next Generation Board advises senior management
To make sure that change is happening at every level of the company, Bütter appointed “ambassadors” for the programme in every department and at every level. “The board and ambassador reports are already impressive,” he confirms. “We are a consensus-driven enterprise. We are making the most of this part of our history to achieve better results in the future.”
Another approach for appraising a wide range of voices has been the creation of what Union Investment calls its “Next Generation Board”. In March, three men and three women between the ages of 29 and 32 joined Union Investment’s full real estate board for the first time. For Bütter, their views create an opportunity to be a “bit more diverse, younger and fresher, and more attractive”.
He adds: “They have a voice. They suggest topics and debate with us – and they’ve been very forthright so far. It’s a great differentiator for us, young people have mentioned it when applying to the company, and we have also inspired our peers to listen to young people, too!” In terms of how Union Investment’s customers are likely to experience all these changes, Bütter is confident that impressions will be wholly positive.
We have a strong DNA that made us successful in the past. But any company that wants to stay successful needs to embrace change.
“You’re going to find us quicker and more entrepreneurial. We have opened up our business model to make it more suitable for institutional investors as we were largely perceived as a fund manager for private funds in the past. We have started a programme to change that and ensure that every employee of the company has the right mindset.
“Institutional investors are more demanding than, say, an individual pensioner, who wouldn’t necessarily have the opportunity to ask questions or request a report. But when an institutional investor entrusts you with their money, they expect specific feedback. We have adjusted to this but can still improve further.”
By Isobel Lee