I have known Britta Quade-Cherek for more than five years now. We recently saw each other again at a conference in Wolfsburg where Johann Jungwirth, CDO of the Volkswagen Group, gave the keynote about VW’s view on Digital Transformation.
During a networking break, Ms. Quade-Cherek and I discussed Digital Transformation and its effect on corporate culture. She invited me to speak in a few weeks at the ZONTA Club of Hannover about my personal view on Digital Transformation.
I happily agreed! These ladies work vigorously to affect society’s treatment of women worldwide, which is something that is very important. Despite this, I thought they might not be as technologically savvy an audience as I am used to. With this in mind, I made sure to prepare a bit differently. My wife and I arrived at the meeting in Hannover, and ZONTA members greeted us warmly.
I titled my presentation, “Digitalization? It won’t go away! ” Looking back, the title couldn’t have been any better.
Excerpt from my speech in German
My presentation (click here to download the German PDF) started with the general idea that digitalization is not a new concept. The first mainframe computers were used in different industries over 50 years ago, and the IBM PC was introduced shortly thereafter. Even so, many current SMBs suffer from too much paper circulating the organization .
When it comes to digitalization, catching up is the first challenge for any business. To catch up, get rid of the paper in your organization and make sure the ERP system is primary and includes all necessary data. Get rid of Excel sheets as well! They provide a different truth than the ERP system. I call this a catch-up-process.
Next, I pointed out that we need to understand new technology in order to imagine how it can contribute to our business. Some examples of new technology are:
- Cloud Technology
- IoT – Internet of Things
- 3D Printing or Additive Manufacturing
- Generative Design
- AI – Artificial Intelligence
- Big Data and Analytics
At this point, I presented various new technologies that have matured in recent years. Of course, it is not only big enterprise that is affected by these technologies. One example is how 3D printing is starting to disrupt the field of dental technology.
Disruption was the next topic I covered. I showed the Kodak example (see my article Why Digital Optimization And Industry 4.0 Is Not Enough!). Kodak underestimated their new product—the digital camera—and highly overestimated the potential of their existing business model—celluloid film. This has happened with other companies. For example Blockbuster, who should have been trailblazers in their industry (think Netflix ), but did not read the signs and eventually faced bankruptcy. Nokia, of course, is another famous example.
I then presented two examples of successful new digital business models:
- Rolls Royce Jet Engines: they don’t sell jet engines anymore but sell engine hours. Their program is called “Power-by-the-Hour.”
- REWE is a German supermarket that started to successfully sell groceries online
New Work, corporate culture, digital leadership
Technology was certainly interesting for this audience. Disruption started to attract attention, but the topic of New Work, corporate culture, and digital leadership grabbed everyone’s attention.
Four years ago, every 5th employee came from Generation Y. Two years from now, half of the workforce will be Generation Y or Z. These generations have a different approach to work and the tools they expect to use. It is very important to understand their expectations because, whether we like it or not, this will disrupt both the way we work and our corporate culture.
Next, I showed a disturbing graph illustrating which jobs would likely be taken over by robots or computers (AI) within the next 20 years.
Digitalization, AI, will change the environment we work in. If we like it or not, it won’t go away. Businesses that have already paved the path towards future did this mainly by changing their corporate culture. During workgroups in the VDMA, we concluded that technology is much easier to implement than necessary changes in corporate culture. See my article Four DX Experiences from German “Mittelstand.”
I explained that “trust” is a major asset that leaders in the digital age need to work with:
- Trust-based working hours
- Trust-based working place (vs. compulsory presence)
- Trust towards the employees in general
Although some companies have adjusted to a more employee-trusting model, many are still managed with a strong hand. When business is declining, managers tend to revert to the mindset of command-and-control. See Liz Ryan’s Forbes article “Command-And-Control Management Is For Dinosaurs.”
Digital Leadership requires:
- Turning away from traditional structures and traditional leadership
- Demand for soft skills
- Less power and interference on all hierarchy levels
At this point of the presentation, a vivid discussion emerged:
- What does digitalization do to employees?
- Is multitasking healthy?
- Can we zone out if the smartphone is omnipresent?
- What about those who are poorly educated?
- How does society deal with this?
We asked, “How can we solve the problem?” The general belief was that digitalization is unhealthy. At that point, the title of the speech made perfect sense. Whatever the solution may look like, the answer will never be to stop digitalization.
- Industrialization didn’t go away
- Electricity didn’t go away
- Cars didn’t go away
- The Internet didn’t go away
- Smartphones won’t go away
- Digitalization won’t go away either
The only solution can be to change the way we interact with new technology in order to get the best results for the entire society. The audience resembled society very well: doctors, business ladies, psychologists, dental technicians, etc.
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!