Digitization and digital transformation – an overview of the most important topics from the month of June
01. July 2016
Which digitization-related topics were in the news last month? According to research by Bitkom, digital transformation is providing more jobs; companies are not yet exploiting the full potential of social collaboration; startup culture is finding its way into Siemens; and why the old-fashioned style of management has had its day.
It is one of the big questions associated with digitization: What will happen to the number of jobs? Will jobs be cut or will new ones be created? Bitkom, Germany’s digital association, performed a survey that asked companies about this issue. According to the results, companies are expecting there to be a definitive increase in jobs over the next ten years, especially for employees with good levels of education and training. This is good news at first glance. Yet so far, these companies have been failing to offer their existing employees further training in the area of digital technology. Although 97 percent of the companies think it is important to offer CPD opportunities and equip staff with digital skills, fewer than one third of them already have a strategy or a pre-defined budget for this. This is contradictory behavior. If companies want highly qualified employees who have digital expertise, they themselves need to do something to make it happen.
The picture is similar when it comes to social collaboration. Digital technologies create fantastic opportunities, including in the area of communication and collaboration within companies. Social intranets and file-sharing platforms can facilitate easier communication between different locations and countries and improve knowledge sharing. It is also proven that, all in all, that using them increases the efficiency of collaboration. It sounds great. Yet according to recent research, German companies are very restrained when it comes to social collaboration. Editor of the Wirtschaftswoche magazine, Michael Kroker, writes the following: “Nevertheless, there is a large gap between the high expectations and the daily business operations […]. Face-to-face conversations, phone calls and e-mails remain very popular in many companies.” In particular, SMEs, banks, insurance companies, the consumer goods industry, the healthcare sector, and energy providers have some catching up to do.
Siemens wants to “fail faster and cheaper” (Die Welt)
It is nearly a regular weekly occurrence: a large industrial corporation announces that it wants to enter the digital era. Most recently, we have mainly been hearing from the German automobile industry (see Founder and Managing Director of etventure Philipp Depiereux’s most recent column [in German] on the BILANZ website). Now Siemens also wants to push through with digital transformation by establishing more of a startup culture and by founding next47, which is the company’s own business unit for digitization. “When it comes to innovation, the rulebook has been rewritten. We need to be open to new things,” explains Chief Technology Officer Siegfried Russwurm. In the article, he says that German corporations need to speed up and develop a culture of failure. October will see the launch of next47. Siemens plans to invest around one billion euros into the new digital unit over the next five years. The aim is that next47 will facilitate the development of new technologies, as well as provide a focus for the company’s partnerships with startups. Siemens wants to push ahead with developments in various areas, including electric aircraft, artificial intelligence, and interconnected mobility.
In principle, it is a good idea for established companies to seek out partnerships with startups, since it is mutually beneficial for both parties. Yet in order for such a partnership work, the differences in terms of company culture and workplace environment must be taken into account – both the rigid, hierarchical structure of the large corporation and the young, flexible characteristics of the startup team. Siemens would not be the first German corporation to fail in its efforts to work with startups due to a collision of these two worlds.
Power-oriented management has had its day (Wirtschaftswoche)
In his guest contribution to the Wirtschaftswoche magazine, Oliver Blüher, Country Manager for the DACH region at Dropbox, joins other professionals in emphasizing how important cultural change is in the context of digitization. What is meant is not just a general change in the company’s culture but also a change in the management culture. “There is no longer a place for old-fashioned management styles in our modern workplace. Today’s managers need to adapt quickly to rapidly changing markets, products and services. They need to ensure that processes are customer-oriented and they need to support their staff,” says Blüher. “Nowadays, bosses who want to be taken seriously by their colleagues cannot act like army commanders. Instead, they need to be expert communicators.” Digital technologies bring about increased networking. Personal contact – via a whole range of channels – is becoming increasingly important. Cooperation replaces control. Instead of hierarchies, employees are autonomous and have the right to be heard. This change may well be difficult for many business leaders. Yet if they want to continue to be successful in the future and if they want to attract and retain well-qualified employees, this change process will be unavoidable.