Conference at HAFNER’S BÜRO “Digitalization. Do you have a Strategy?”

On March 9th of this year, I attended a conference at HAFNER’S BÜRO “Digitalization. Do you have a Strategy?”

This was a very interesting conference, organized by a long-time Autodesk partner with a variety of attendees from different industries. The conference was held in Stuttgart, considered to be the heart of German “Mittelstand,” i.e. the place where many family owned businesses are located.

There were four presentations:

Industrial Change through 3D-Printing-Technologies, Stephan Kegelmann

Mr. Kegelmann represents the kind of entrepreneur I thought was extinct—fully hands on with a clear-cut goal and strong vision. He started 3D printing in 1989 with stereo lithography. Obviously, he was way ahead of his time. He already did “rapid prototyping” when the term wasn’t even invented. He did “Industry 4.0” many years ago, before anyone used the buzzword. He connected machines, got rid of the paper in his production, and replaced paper drawings with screens.

Photo: Matthias Baier

His way towards the “Industry 4.0 plant” was applying these three steps:

  • Standardization (also tools and raw materials)
  • Organization (fully integrated ERP system, no paper, no extra Excel sheets)
  • Automation (robots, RFID, etc.)

While I wrote an article about standardization, and simplification, he just did it! I’d like to add that he proved my thesis was correct.

Because he understood that hierarchical structures don’t work, Stephan acted with innovation. The use of the word “division” (German Abteilung, or department) is forbidden in his company because he believes that the inherent meaning “to divide” starts creeping into the minds that it shouldn’t. His work methodology was “agile”—not because it was popular—but because it just made the most sense.

Stephan really impressed me. The best part: his presentation clearly showed that it is possible to fully digitalize. The key point is that this way of thinking was not a transformation process to him. When he founded his business more than 25years ago, he used digital tools and evolved with them. It was a process.

Industry 4.0: looking further ahead, Dominik Jauch

Mr. Jauch was announced as an “Industry 4.0 skeptic.” However, it turns out that he fully supports Digital Transformation and Industry 4.0. He pointed out that merely digitizing a business or its processes for the sake of digitalization won’t help it succeed. He concentrated on new digital business models, and new digital services that serve his customers best.

Mr. Jauch managed to avoid implementing hierarchies in his business. He is confident that his team is very capable and knows far better ways to solve problems than he does.

Photo: Matthias Baier

Both Mr. Kegelmann and Mr. Jauch share the same mindset—true leaders who empower their employees. As CEOs, they gave vision and guidance to their teams. When asked by the audience how to turn “sheep-like” employees—those who refuse to think for themselves—into capable team players, they said that they never had these kinds of employees. Determining whether a candidate’s mindset fit in with the company vision was, of course, a focus during any interview. One interesting tactic both CEOs used was to provoke candidates in such a way that, if they lacked an entrepreneurial mindset, they would turn down the job themselves. Smart!

Digitalization? Of course! But where to start? Alexander Buschek

After these two amazing and highly inspiring presentations, it was my turn. You can download my presentation here in both German and English.

I divided Digital Transformation into three parts:

  1. Prepare your foundation, optimize your systems, and catch up. The idea is that you use your existing ERP system in the best possible way. Most important: eliminate media breaches, like Excel sheets or, worse, the reliance on paper to control the business process. Earlier in his presentation, Mr. Kegelmann said that the ERP system is the leading system, and all others (CAD, PDM, PLM, ECM, etc.) have to be seamlessly integrated.
  2. Learn and understand new technologies in order to leverage them. Please refer to my videos wherein I describe technologies available to us today, like Cloud, IoT, 3D printing, Generative Design, and Social Media. Finding new business models will not work if you don’t know the tools and technologies that are available for you.
  3. Finally, take a good look at your business model. Think about Kodak’s example: Industry 4.0 or optimization would not have helped them. They did not adapt their business model to serve their customers. Read my article, “Why Digital Optimization and Industry 4.0 is not enough.” What do our customers expect from us in the future? What services will they need? Are the products we’ve proudly sold for decades be things our customers will still need in five or ten years?

With this understanding of Digital Transformation, businesses need to act. Kegelmann and Spinner Automation were perfect examples of my belief that CEOs need to be the ones to start digitalization and bring the mindset to the business. Mr. Kegelmann and Mr. Jauch vividly live this vision.

Photo: Matthias Baier

The following are steps I outlined for the audience:

  1. Commitment and Understanding of the CEO/Board
  2. CDO – Chief Digital Officer. This role will work only if #1 is realized. Otherwise, the CDO will cost a lot money, disturb a few people, and will finally disappear again.
  3. Digital Strategy. With Board support, a CDO (I also heard “Chief Disruption Officer”) can write down the digital strategy. This is a major change process. Make sure you have a clear goal and vision.
  4. Finally, act! This is a real challenge that cannot be underestimated. It usually includes a change of the corporate culture. The human factor is crucial in the success of this process. If you haven’t read John Kotter’s “Leading Change,” get a copy. Part of the process is also to scrutinize your products and services. If your products and business model have been in the market for a long time, you must analyze whether they are equipped for the future.

I was pleased to answer many questions that my presentation raised. The discussion lasted longer than the presentation, which is a good sign.

I4.0, IoT, Digitalization…Opportunity or Risk, Vision or Product? Marco Gittmann

Mr. Gittmann, who also moderated the event, gave the last presentation. Being a passionate digital evangelist, he brought excerpts from TV shows that featured digital enthusiasts and critics. The clips have to be seen in the German context where digitalization is still considered dangerous rather than full of opportunities, as many others believe.

Photo: Matthias Baier

One of the critics said that we should stop the digitalization process in order to maintain current job opportunities. Mr. Gittmann did not agree with this.  What the critic forgot to mention was that new jobs arise from digital seedlings.  When Gutenberg invented the printing press, the monks in Christian monasteries tried to stop this process, but were unsuccessful. People opposed the steam engine, the railway, the automobile…you name it. You cannot stop a tsunami, but you can and must prepare for it. Industrial revolutions have made life better, not worse. Watch the TV show Mr. Gitmann referred to.

Next, he made clear that opportunities outweigh the risks that Germans tend to see. He then showed a stunning example of the use of IoT in facility management.

He also emphasized the necessity of new digital business models. Among consultants, this is already commonplace. However, businesses—especially SMBs—still need time to digest this concept. He stated that we must not forget the human factor in this process. Digital Leadership and change in corporate culture need to be addressed.

Marco concluded the conference with Mentimeter voting.

Translated, these statements say:

  • Digitalization will overburden us.
  • I have no idea where to start.
  • I desperately need someone to talk to.
  • Digitalization will jeopardize my business if I don’t take part.
  • This won’t affect me.
  • We are well on our way or have already started our journey.

The higher the number, the more the people agreed.

I would like to thank Grit Kubin, CEO of HAFNER’S BÜRO, who gave a perfect frame for a highly interesting event with many exciting insights.

The purpose of this blog is to start a discussion. Please leave your comments, whether you agree or if you disagree. I hope to hear from you!

About Alexander

Alexander Buschek is passionate about Digital Transformation and the opportunities it gives businesses—especially MSEs. He is convinced that every business has to embrace Digital Transformation in one way or another in order to survive. The sooner a business begins its Digital Transformation, the better. Alexander was the CIO / CDO of Braunschweiger Flammenfilter and CIO of Cherry GmbH. Prior to that he was an entrepreneur, consulting MSEs about IT strategies, providing external project management, and overseeing various IT projects (e.g. ERP and CAD implementation and migration). Working with many MSEs gave him a deep understanding of this market. Alexander is now Senior Director, Analyst (MSE) at Gartner.