Kim Williams
Liberty University
BMAL 504
May 6, 2022.
PART ONE
Danish Oil and Natural Gas (DONG) was the most visible company, accounting for one-third of
the country's carbon footprint. In the early 1970s, the company began as a state-run enterprise
that managed oil and gas resources in the northern sea. In the early 2000s, they began acquiring
coal-fired electric utilities. Danish Oil and Natural Gas, Denmark's major energy company, was
experiencing a high financial crisis in 2012. The value of natural gas plummeted by 90%, and the
S&P downgraded, causing their credit rating to become negative. DONG's board of directors
decided to appoint Henrik Poulsen, a former executive at LEGO, as the company's new CEO.
Whereas most leaders and organizations would have approached the crisis with an aggressive
crisis management mindset, laying off workers immediately until the finances were restored,
Poulsen saw the opportunity for a complete and drastic fundamental change. Poulsen began a
radical transformation of the entire company that many were familiar with with the help of a
decent amount of cash from Goldman Sachs Group Inc., which required the company to build a
brand-new essential business and find new areas of justifiable growth. According to Poulsen,
"There was a growing awareness of climate change in society at the time. We could see that
relying on fossil fuels for energy production would not be sustainable in the long run." (2020,
fast company)
DONG began to investigate ways to combat climate change. They eventually decided to become
one of the few companies that wholeheartedly embraced the radical decision of shifting from
"black" to "green" energy. At the time, the European Union was outspoken in its support for
renewable energy, setting a strict target of 20 percent of the European energy supply coming
from renewable sources by 2020. With all of the statistics, studies, and data in mind, the
company decided to completely focus on and invest in renewables. To demonstrate its
commitment to this mission, vision, and transformation, the company issued a statement
endorsed by 181 CEOs, stating that "serving shareholders can no longer be the main purpose of a
corporation; rather, it needs to be about serving society through innovation commitment to a
healthy environment and economic opportunity for all." (Anthony, 2019, para. 3)
DONG renamed itself rsted in honor of the legendary Danish scientist Hans Christian rsted, who
discovered the principles of electromagnetism. The company changed its name because the old
name did not fit with its new vision and purpose. Along with the rebranding, the company began
phasing out coal and completed the sale of its upstream oil and gas commercial to INEOS.
DONG Energy transferred approximately 430 employees to INEOS. It started rapidly scaling up
offshore wind within the industry simultaneously.
With 5.6 GW installed and over 25 years of experience, rsted is currently the global leader in
offshore wind. This organization was founded in London and currently employs approximately
6,100 people. Their annual income is roughly $52.6 billion. "DONG Energy has transformed
itself over the past few years from one of Europe's most coal-intensive utilities and a small
regional oil competitor into the world's largest producer of offshore wind power," according to
the company. Dong's wind turbines off the coasts of Europe have nearly triple the wind-power-
generating capacity of the company's nearest rival, Sweden's Vattenfall AB" (IEEFA, 2017,
Paragraph 4). In addition to rebranding, rsted is focused on launching and supporting the
offshore wind industry in the United States, and they are monitoring at least three new projects
off the East Coast. "We built the new renewable energy company to be the core of our company
while dismantling the old fossil fuel-based company," says Jakob Askou Bss, rsted's senior vice
president of corporate strategy and stakeholder relations. The rsted company aims to be
completely coal-free by 2023, though some of their power plants will continue to use natural gas
for day-to-day operations. The shift to offshore wind seemed risky because, when the company
first invested heavily in the necessary technology in 2013, it was significantly more expensive
than standard on-land wind power. The benefit was that the costs contributed to the overall price
being reduced, and it is now approximately 70% cheaper than it was six years ago. rsted intends
to install 20 gigatonnes of wind power by 2025. The switch to renewables will reduce the
company's emissions by 98 percent compared to 2006. The company's largest powerplant
primarily burns wood pallets; however, there has been scrutiny and additional concerns raised
about the company's environmental credentials.
Furthermore, it supports the goal of eliminating the final 2% of emissions from its operations by
electrifying the company's vehicles. Currently, rsted purchases offset for unavoidable emissions,
such as airline flights. rsted intends to eliminate emissions from its operations and extend its
practice to its supply chains by 2024. They are currently collaborating with the steel industries,
not by pressuring manufacturers to quickly dacarbazine the steel used to manufacture wind
turbines. Although it is difficult to produce renewable energy from steel, current technological
advancements make it a possibility. The drastic change that rsted made has inspired many similar
businesses in the industry. Repsol, a Spanish oil and gas company, for example, intends to
achieve net-zero emissions by 2025. ENI, an Italian oil company, intends to achieve net-zero
emissions by 2030. Shell intends to cut its net carbon footprint in half by 2050, relying on
strategies such as reforestation and carbon capture to achieve this goal. Green Mountain Power, a
Vermont-based company, intends to provide 100 percent carbon-free energy by 2025. Xcel
Energy, based in Colorado, intends to provide zero-carbon electricity by 2050. According to
rsted, the industry must be aggressive. They say that undergoing such a transformation will take
time and dedication. They believe, however, that they have provided a model that many
organizations can use to achieve success in their industry. According to Bss, "I believe that the
path we have taken is similar to the path that the overall economy and many, many businesses
will have to take. To be able to inhabit our planet without causing significant disruption to global
ecosystems, we must find new and sustainable solutions. This is a journey that we will all have to
take." 2020 (Fast Company)
The CEO of rsted was persuaded, and he saw significant opportunities in green and renewable
energy and less chance in fossil fuels in the future. With the board's support, they began to make
strategic decisions and move quickly toward transformation, gaining a first-mover advantage in
renewable energy. Compared to other companies in the industry, rsted's actions, decisions,
strategic planning, and implementation have resulted in the installation of one-third of the
world's offshore wind turbines. The rsted transformation has demonstrated how much can be
accomplished in ten years. They are very optimistic about the next ten years and all of the
changes they will bring to the industry. rsted has crossed boundaries that scientists have warned
are not sustainable and has proven them wrong. They intend to continue exploring and
challenging industry points.
PART TWO
Definition of the project
Danish Oil and Natural Gas is a significant energy company that is currently experiencing a
severe financial crisis. The value of natural gas has fallen by 90%, and the S&P has downgraded
their credit rating, causing it to become negative. Henrik Poulsen, a former executive at LEGO,
is being considered for the position of CEO by the board. Poulsen is bringing with him a
fundamental change that will drastically alter the specialty and work of the entire organization.
His vision includes a transition from "black" to "green" energy. He believes that green and
renewable energy offer far more opportunities than fossil fuels. This new vision would
necessitate rebranding, mergers, new accountability, and a shift in the organization's culture. If
done incorrectly, it may spell the end of DONG as we know it.
Diagnosis of the current situation
DONG has made the audacious decision to shift its focus from "black" to "green" energy. They
have decided to concentrate on and invest in renewables. As part of their commitment to this
mission, vision, and transformation, the company issued a statement that was backed up by 181
CEOs announcing and supporting their new venture. A clear vision is the foundation of massive
change. "It is more important to have a charismatic chief executive with a personal vision than to
create an organization with a vision." Palmer (2016), p.195.
The first item on the agenda was to change the company's name, which would necessitate
rebranding. They changed their name to rsted in honor of the legendary Danish scientist Hans
Christian rsted, who discovered electromagnetism principles. According to Stuart (2018), the
corporate brand is a prized strategic resource and asset, as well as a driving force in the
organization's purpose and culture. As a result, it is critical that the organization take the time to
select a brand that aligns with its vision and mission. In the case of rsted, their decision appears
to be a wise and well-considered one that will benefit them in the long run. In addition to
rebranding, the company has decided to start phasing out coal and has completed the sale of its
upstream oil and gas commercial to INEOS. DONG Energy would transfer approximately 430
employees to INEOS. They intend to scale up offshore wind. This was a brilliant move to avoid
mass layoffs or unemployed individuals. Wind turbines would be their new specialty. Their
ambition is to be the world leader in offshore wind power. The rsted company aims to be
completely coal-free by 2023, though some of their power plants will continue to use natural gas
for day-to-day operations. rsted intends to install 20 gigatonnes of wind power by 2025. rsted
intends to eliminate emissions from its operations and extend its practice to its supply chains by
2024. They are currently collaborating with the steel industries, not by pressuring manufacturers
to quickly dacarbazine the steel used to manufacture wind turbines.
Recommendations
Sharma (2018) defines the conditions for a radical change as providing appropriate working
conditions and leadership actions, both of which are required to persuade professionals of the
need for change within their organization. My advice to rsted is to spend some time researching
this new venture. What is the market like, what materials will be needed, what contracts must be
created or terminated, how will the organization manage the current workforce that specializes in
"black" energy, what training will be required, and so on? Setting the stage for the workforce to
feel confident during the transition will be extremely beneficial. rsted must ensure that their
vision, mission, and culture are defined. This is an opportunity for them to reinvent themselves.
A well-established organizational culture is expected to create inertia, preserve social structures,
and promote Unitarianism (Carlström, 2012).
Communication will be essential during this period. Organizations see flexibility, improved
communication, and a stronger firm's brand or image as major forces driving workplace change
(Morgan, 2008). rsted will be no different. Rebranding is an exciting step; however, it is rather
complex in its territory, which, if mismanaged, could ultimately harm rather than help the
organization's reputation. rsted must first establish a new messaging framework, communicate
the rebrand internally, and communicate the rebrand to clients and stakeholders before launching
the rebranding campaign.
Implementation
A change like the one DONG aka rsted is implementing will take years to complete. We are re-
creating the image and all of its core values, mission, and visions after years of research and
development. I recommend devoting the first 2-4 years to research and data collection for this
new venture. rsted must develop an environmentally and financially sustainable business model.
If this is rushed, the organization will fail before it even gets off the ground. Once the business
model has been established, work on developing the new vision, mission, core values, and
branding concepts.
Begin developing professional relationships and drafting contracts that will be used to reduce
costs and labor for this new direction and specialty. During this time, announcements about
upcoming changes and the implementation plan should be made to employees. It offers training
and education. Determine what materials, technology, and labor will be needed, and hire/contract
experts to assist with the launch.
Management involvement and support should be encouraged. Employees become more relaxed
and resistant to change when they see their management team endorsing, supporting, and
encouraging the changes. Espedal (2008) discussed how leaders must trust their employees, and
employees must trust their leaders, if change is to occur. During the sharing stage, the
organization will gain a better understanding of who is on board and who is not. A compelling
case for change must be developed and presented. Encourage some level of employee
involvement to help employees feel connected and excited about this new move. Determine the
effects on those employees who will be affected and plan a solution to assist them in
transitioning.
During this time, a public awareness campaign announcing the new direction should be
launched. Creating a communication strategy is critical at this time. Determine the most effective
method of communication. Make certain that the measurement of the change process is
consistent. This endeavor will provide opportunities for development and growth.
rsted should begin the physician shift from the "black" energy industry to the "green" energy
industry in years 4-6. By this point, the rebranding should be well-known and well-established
across industries. rsted management and employees should have already received training in the
new industry. Contracts for location should be signed and ready for implementation and work.
Active projects that generate revenue in the green market should be ready to go.
Summary
The boldness with which rsted has pursued this radical change is both inspiring and admirable. It
can be frightening and intimidating for many organizations to leave their area of expertise and
venture into new, uncharted territory. Especially when you're up against the polar opposite of
your previous expertise and known competition. The boldness with which rsted has pursued this
radical change is both inspiring and admirable. It can be frightening and intimidating for many
organizations to leave their area of expertise and venture into new, uncharted territory. Especially
when you're up against the polar opposite of your previous expertise and known competition.
There will be many challenges, there is no doubt about it. However, if proper research,
professional relationships are formed, communication strategies, rebranding strategies, location
selection, policies, and overall keeping a finger on the pulse of the organization is implemented,
this can be a record-breaking change that will inspire many to take the same leap. If done
correctly, this transformation will inspire other companies and countries to begin taking the
necessary steps to limit the temperature increases that are causing climate change and are
responsible for the negative impacts on our global ecosystems. There will be many challenges,
there is no doubt about it. A move of this magnitude will necessitate technological innovation,
steep learning curves, and difficult strategy decisions that will result in long-term gains.
Believing in the mission and vision will be critical during difficult times. Keeping sight of the
end goal and then pushing past it. Understanding that this transformation is only a small part of a
much larger transformation will add fuel to the fire. According to Deuteronomy 13:6, "Be
courageous and strong. Do not be afraid or terrified because of them, because the LORD your
God is with you; he will never abandon you or forsake you." (NIV). This is the time for rsted to
stand firm, not afraid, in their choice as the reason for this massive transformation. Despite the
fact that it is a fantastic business opportunity, if there is heart and belief in the "why," and they
are able to instill that belief in their employees, they will see great success from this new and
courageous endeavor.
References
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