Maintaining your company’s unique signature is an ongoing task.
Every business model is threatened by internal and external influences.
External factors such as permanent market and competitive influences, economic policy and legal framework conditions are usually sufficiently aware and known to the entrepreneurs. Nevertheless, it is difficult to adapt a team to these constantly changing conditions. Technical inventions and digitization are inexorably and steadily advancing. At irregular intervals, they are accelerated by leaps and bounds due to special effects – such as the pandemic. The imponderables increase – the planning security decreases.
In this challenging situation, medium-sized companies and corporations easily overlook the internal and often soft factors that have a decisive influence on their success or failure. Employees change their life models and priorities, competence is lost when they leave, motivation suffers due to interface problems.
A business model arises from an entrepreneurial spirit. This spirit must also be firmly anchored in the growing company in a robust and resilient manner. The entrepreneur in large family businesses is no longer fully capable of doing this at all times. He has to spread the entrepreneurial spirit across several shoulders. This task is no easier for the management of non-family-run companies. The division into departments creates additional interfaces and friction losses. Only with the help of constant (neutral!) observation of the situation in the market and through constant, effective, cooperative and transparent transformation, companies can maintain and expand their success today. The well-known transformation programs with their melodious names, initiated every few years by a new CEO, have had their day, and are now counterproductive. Most employees have seen through their long-term ineffectiveness. This is particularly the case in industries that have already passed the peak of their success due to the shift from the age of mechanization and electrification to the age of data. The automotive industry, mechanical and plant engineering and the metal industry are particularly affected by this. In addition to cost-cutting programs that are vital in the short term, these industries primarily need new impulses for their business models. Many successful startups in the field of mobility, whether on land or in the air, have proven that this is possible. The decisive factor for success is constant transformation, the common “how” of the continuous adaptation of a company with its employees to external and internal factors. Companies therefore need constant adaptation instead of impulsive repetitive transformation. This enables them to keep their business model alive in the long term.
How can such an adaptation be achieved?
Successful adaptation of companies and their business models requires an understanding of several fields of action and their iterative and cooperative processing. The new fields of action arise through ongoing change from the classic type of an owner-managed, hierarchical company based on division of labor – to a cooperatively managed company that is integrated into a business ecosystem and operates systemically. They emerge from the successful work and structure of current market participants who are successful in the digital economy. The four fields of action and the questions to be asked for successful processing are:
How can all stakeholders translate customer wishes, their needs and security requirements into the values, framework conditions and robustness requirements of their own company. That is the very own field of action of the classic entrepreneur – the definition and adaptation of the business model and corporate culture.
How can the business model and corporate culture be translated into a powerful organization? What are the driving forces of the organization, which products can arise from them and with which processes can these products be produced in the best possible, resource-saving and co-creative way? This is where the strategy emerges first and then the structure that implements it. The organization develops perspectives, networks and business ecosystems from customer requirements and entrepreneurship. It is increasingly using self-organization, for example in the form of agile methods.
In the next step, strategy, structure, products and processes result in the requirements for the skills of the company and its employees. This is where a company plan emerges from the thought-out offer to customers. That can only succeed if all the necessary skills and resources are available. At this point it is decided which competencies the employees and partners need to further develop and how the company can be set up digitally. In this step, the focus is not only on the technical and methodological skills of the team. On the contrary, it is mostly precisely the social, ethical and strategic abilities of individuals that have not received enough systematic support. But without them, no functioning team can develop.
The decision as to whether what the customer wants actually arrives at him is made by only one instance: the customer. Here the circle closes and begins again. The customer can either be inspired by the offer presented. This then leads to further inspiration for those involved in the company through his feedback. Or: he leaves. Every customer who leaves without saying why is a threefold loss for the company: All the effort in inspiration, structure and standardization were in vain for him. Every customer who stays and doesn’t say why is still a simple loss: there is no chance for further inspiration. Only a customer who stays and leaves meaningful suggestions is a threefold gain: he inspires the company to expand, standardize and control another cycle. He is an entrepreneur-customer: he feels understood and looked after by an entire company – regardless of whether the flesh-and-blood entrepreneur still exists or whether a functional team represents him.
The ability to adapt determines the future of all companies.
We see unforeseen happenings all the time. The predictability decreases. What can take the place of planning when planning becomes more and more meaningless? We hear terms like resilience and anti-fragility, what do they mean?
Ultimately, these terms revolve around the degree of self-organization.
In the first stage of self-organization, fault tolerance is desired. Companies want to be robust. With more and more sophisticated processes, they “generate” quality and protect themselves against external threats. However, robust processes also come with a certain degree of rigidity. Anything that cannot be done efficiently in-house is shifted to suppliers and described down to the smallest detail with requirement catalogs and specifications. This way of working has been perfected over decades and has resulted in rigid supply chains. The fact that a complex product or system is not working is often only recognized at the end of the development process. Prominent failures in current vehicle start-ups often indicate failure. They come from the fact that the learned and optimized way of working and division of labor is overwhelmed by today’s complexity. Even external threats cannot be prevented by rigid supply chains – on the contrary. If a completely new, innovative product is to be created – for example a battery-electric vehicle – the established supply chain is overwhelmed in many places, if not completely unusable. However, companies in the Taylorist phase of division of labor did not acquire practice in building up new partners and other forms of cooperation in the 20th century.
Therefore, today, in the second stage, more and more companies are starting to postulate agile processes and an error culture. They try to achieve this with more or less success in the existing organization. The keyword is resilience, i.e. self-healing, recovery from mistakes and learning from mistakes. The limits of these efforts are reached when the learned behavior patterns and hierarchical structures collide with the demand for agility. But that is almost always the case. Because the question of how much personal responsibility employees and suppliers are given in a hierarchical structure can theoretically be specified with rigid processes, but in practice it usually fails because of people. If only a few refuse to accept the new logic, agility quickly fails due to the factual alarm status of projects. “What had to be proven,” think some managers and once again made themselves irreplaceable.
Which ultimately leads to the only logical realization in the third stage on the way to more self-organization: that the target organization which enables an adaptive company must itself have emerged from an adaptive process. Structure follows strategy. The organization builds itself and is professionally coached. That is the essence of agile frameworks like Scrum. And that means nothing less than that many existing organizations with their aging business models will slowly but surely perish because the transformation gap has become too big for them. The introduction of self-organization fails due to the underdeveloped skills and persistence of the existing organization.
For many companies, this is the price they pay for decades of success. They felt no need for transformation. It is the price that Kodak, Nokia & Co. paid. They are replaced by new business models and adaptive structures. Slowly but steadily, a new form of economic activity is emerging that deals with the issues of the 21st century. I have described this form of company in a “Future Fit Enterprise” model that is based on the elements described above: inspire, build, standardize, control.
The Future Fit Enterprise is diverse, its employees have high social and ethical skills, it has a high degree of flexibility, self-motivation, commitment and satisfaction of employees, partners and stakeholders. The basis for a successful adaptation of this working model in the company is loyalty in both directions between management and employees. In order to be able to put the value of loyalty at the center of all actions, a sincere analysis and transparent consolidation of the abovementioned skills are essential. The topic of strategic realignment must not stop at people, but only begins with the focus on the field of competence of the entire company.
My calling is to work with you to enable the long-term success of your company. I would be happy to discuss with you in a personal conversation what your specific requirements and goals are, and what changes can be achieved.
Talk to me!