German companies are too slow, too sedate, and too complacent to embrace digital transformation with the urgency required. The problem is something that at first doesn’t sound like a problem at all: German companies have done a lot of things right in the past, otherwise Germany wouldn’t be such a big economic power. But this is precisely where the danger lies, because success can make you sluggish. For instance, I’ve had incredibly successful medium-sized companies in Germany telling me: “What do you mean? We’ve got a 3D printer. We’ve got a Facebook page.”
These companies don’t understand that digitalization is about changing the complete culture within the business, about breaking down hierarchies and building up network structures, about creating teams that work autonomously, and about delegating responsibility. Technology is the easiest part of digital transformation. What we need is courage: the courage to ask questions about your own business model – however successful it has been up to now – before someone else does!
What do you mean? We’ve got a 3D printer. We’ve got a Facebook page.
First mover or smart follower
This is also the attitude required, for example, when deciding whether you want to be a first mover or a smart follower . “It’s always the second mouse that gets the cheese,” my friend Paul Saffo from the Institute for the Future in Palo Alto always says. In fact, I really would warn an established company against moving forward too briskly. But there are, of course, models that combine the benefits of both strategies. I’m talking about small, autonomous business units, maybe even spin-offs or start-ups, that are founded by a company’s own people but financed by the company itself. If these are successful, the company can then bring them back on board – or switch over to them completely.
For companies with established structures with which employees have long been familiar, that isn’t easy. Many companies have developed models for winning strategies and decision-making processes unwittingly, and these have then become a part of the companies’ DNA. On the one hand, this can be a benefit: they don’t have to reinvent the wheel every time. On the other, it can become an obstacle to new developments. In these kinds of structures, lateral thinkers and innovators are seen as disruptive and are usually met with resistance.
It’s always the second mouse that gets the cheese.
The management slows down digital transformation
A further problem is management. Unfortunately, digitalization is being slowed down in most cases by people at the front or at the top – namely at management level. According to a study by German IT industry association Bitkom in spring 2015, three-quarters of all German managers make it compulsory for their employees to work in the office. They don’t trust their people and think they can only work productively when under supervision. Managers like these need to learn to let go! But that also requires the ability to build teams and manage them in a way that is results-oriented. When each team member knows exactly what has to be done and when, and they have learnt how to organize their work themselves, then the manager can also sit back now and again and relax.
To get to that stage, companies need impetus from the outside. However, German companies don’t particularly like working with external employees and freelancers, as apparently they’re hard to monitor and it’s difficult to review the work they’ve done. Besides, so the legend goes, these kinds of people can turn the whole place upside down, and that’s just unacceptable! It’s a shame that myths like these still exist, because companies are missing out on opportunities to try out new ideas and test out fresh perspectives as a result.
Highspeed-Internet is essential
Sure, we’re talking about a cultural change here that takes time. But the pressure is immense. After all, there are also a number of very talented people in other countries looking to eat German industry’s lunch. Some have a better set up, for example with regard to transmission technology. In contrast to Germany, countries like Sweden, Norway, Russia, South Korea, and even Lithuania, Slovenia, and Kazakhstan already have ultra-fast fiber-optic networks, while here the German Telekom is trying to squeeze a few more megabits through the old copper cables. As far as broadband expansion around the world is concerned, Germany is among the countries lagging furthest behind.
And suddenly – as so often the case in innovative fields – people here are beginning to act on their own initiative: more and more companies are starting to take things into their own hands. The first broadband associations are already being founded in North Rhine-Westphalia. Companies located on industrial estates or business parks with insufficient network connections are banding together and bringing in providers that offer them the data rates they need in order to keep up with foreign competition. And if that doesn’t take courage, it at least requires a vision of the future.
Digitalization creates a powerful imperative for us to change our business thinking and activities. But that is easier said than done. Where do the challenges lie for entrepreneurs and managers? Do companies have a nucleus in which digital change can begin particularly well and effectively? What basic conditions must be created – not only in companies, but also, for example, by the government and society – for this to take place? What skills should employees have and, in a company experiencing digitalization on several levels, who is actually in a position to keep up with the changes involved?
In this article, which is continually updated, we look to answer these questions and many more. We hear from digitalization experts from a variety of scientific fields such as business economics, management, futurology, or IT, as well as from entrepreneurs and practitioners from large companies with management roles or responsibility for staff or processes. And finally, we hear from thinkers who are looking at the main issues of digitalization from the outside.
This article does not aim to be exhaustive, but rather offers a platform to express a wide range of different opinions. It aims to be a space for reflection, to provoke, and perhaps even trigger an argument and debate. A think tank that, to a certain extent, you can watch while it’s thinking.
Image credits: istock/peopleImages, istock/vm
