The principle of functionality reflects the preeminence given in natural systems to its general function over any distinct service or product which is developed to fulfill a function. Frederic Vester provides the example of mitochondria, whose function in human cells is to regulate energy conversion. To fulfill this function, mitochondria sometimes process carbohydrates into carbon dioxide; in other instances they produce amino acids in order to accomplish the same function.
In our commodity-oriented economies, functional units in municipalities often become over-invested in a specific product, and lose sight of effective, alternative ways to fulfill their function. For example, energy utilities often become over-invested in the production of electricity as a way to provide for energy needs, and often resist more efficient ways to fulfill their function, such as the provision of conservation services which reduce demand.
The municipal utility of Saarbrucken, Germany joined in a partnership with local housing agencies, municipal property departments, and local banking institutions to become a diversified energy services firm, providing energy consulting services to households and businesses, retrofitting buildings, and financial residential and business investment in energy efficiency equipment.