Digitisation…. let`s buy smartphones for our employees

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Recently I read a remarkable article: The drugstore chain DM, one of the biggest player in Germany,  procures 25,000 smartphones for its employees:

For a long time, the drugstore chain DM was regarded as a digital despiser. But now the company has ordered 25,000 smartphones for all store employees and is obviously serious about digitizing.

Digitisation is a decisive breakthrough in the processes: AirBnB and Uber have made it clear that they are looking to penetrate established markets and enter the process with well thought-out solutions for the end customer. This is how parts of the margins, which are nowadays usually tight, are being used up.

How to establish completely new processes? This requires creativity. These can be generated by employees. Employees continue to be the most valuable potential to leverage creative ideas.

This includes a departure from micromanagement: new ideas do not thrive by atomizing existing processes and tracking them down to the smallest possible level. Just as a proverb says that electric light was not created by the consistent further development of the candle.

One of the most important bases for this is courage for new, different decisions that do not necessarily correspond to the previous mainstream of the company. This must be exemplified by top management. This is the only way to gain the necessary trust of the employees, to try out new ones or to question business processes that have been practiced for a long time. To depict the future in the dark and to assume that courageous competitors lack social competence is of little help here.

To return to DM: The fact that the procurement of a modern tool is worth a headline shows that there is still a lot of potential. A smartphone is not a gift for an employee, it is a tool. But not every employee can deal with it immediately, but “experts” should give recommendations for action: How and when can I use it how and above all, in the interest of the customer? An easy access to central databases and / or Google is a minimum requirement here, what you might expect in the project.

Speaking of trust: Most of the 25,000 devices, that DM delivers will probably not have a SIM card. Trust in employees in 2017 should look different

Micromanagement is the dead of innovation

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Innovation and Culture

At the moment we have a fast changing world in business context. New player come and displace old companies. How fast the world in economics has changed can seen by the big five in the last 20 years.

Biggest five companies with market capitalization 2006 - 2016

You see, the biggest five companies are all in technology settled. Only five years ago it was only one. To expand in this economic environment means, finding new products or services.

Why Micromanagement is the dead of Innovation

In many companies has established a new kind of manager: The Micromanager. That is a person, who hasn’t`t any priorities and try to control all activities of their colleagues. If this person has disciplinary responsibility, he is starting to restrict all project activities on his horizon. He wants to understand all items of work und is wanting to be reportable in all concerns.

So the colleagues aren`t able, trying new things. They always work on old modes, alway be reportable and avoid responsibilities.

Who think, this is always a problem of big companies should take a look at the German Post, DHL: They started searching a producer for an electric van for delivery. No one of the German Car Producers seem to be able, to produce such a van. So they started a StartUp with an University, the RWTH in Aachen, and now you can see their own build Vans in german streets:

DHL eScooter in HamelnFor a big Company it is not so easy, being creative. But it is possible. The most important asset are the employees: They have new ideas and are creative… if the management let them. With Micromanagement and a closely corset of reportings, they will do exactly, what is expected.

In my example of the German dhl,  the problem (finding an eScooter for transport of parcels) was in the point of view: No limits, a solution must be created.

You see, such creative solutions are for big companies possible, too. But you invest in your employees and has to trust them. Controlling every step of their doing will killing all creativity. This behavior has to be lived by the Top Management. If the senior management expect all times reportings about every step in the processes, the middle management will carry on.

Trust your employees, the most of them will thank such a behavior!

 

Continuity in german boards –

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Intro

In the last week there was an important decision for the continuity in German boards: The participation of employees in the German Boards is compatible with European Law. so the continuity of the German composition of boards is guaranteed.

history

Since 1965 in Germany are the half of the members of the board sent by employees. The German Konrad Erzberger saw in this very special law a discrimination: Only German employees are able to participate this law. Employees of other countries aren`t represented with this law. With this commencement the petitioner got the wrath of the German unions: They are often financed by the fee, their members got by participating the supervisory board.

In the case of TUI the law was called: Is this participation legal with European law? The German Courts sent this case to the European Court. Since Friday, the result is published: The German Law is compatible with the European law. The experts saw this in may this year in their report, and now the European court has followed this view: It is quit right, that different countries of the European Union follow different ways for stakeholders and law for companies:

 In that context, EU law does not, in the field of representation and collective defence of the interests of workers in the management or supervisory bodies of a company established under national law, a field which, to date, has not been harmonised or even coordinated at Union level, prevent a Member State from providing that the legislation it has adopted be applicable only to workers employed by establishments located in its national territory, just as it is open to another Member State to rely on a different linking factor for the purposes of the application of its own national legislation.

The Association for German Leadership has appreciated this decision:

The cooperation with employee representatives in the supervisory boards has proved successful for the majority of specialists and managers in Germany.

explained the president Ulrich Goldschmidt. The German participation is a great advantage for the location of Germany and has proven in the past 52 years. Now the European Court has obtained  legal certainty.

 

We don`t need a CDO

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Intro

I`ve read a great article by Julie Teigland on LinkedIn. In her main oppinion she suggested, that a CDO would help, to getting over the digital Transformation. In my opinion, a CDO can be a first step, not a solution. I have a tweet about it with similar content:

Why we don`t need a CDO

There are some Arguments for a CDO. I think, the most important one is, that a Person in an organizational structure is responsible for all the activities, to make a Company great for the future. But can one Person load such a Job? I think, the whole Management is responsible to transform a Company for the future: If there is one, the Management is saying “This is the Job of the CDO”.

To transform the whole Company, all are responsible: Board, Senior and Middle Management. The digital Transformation is not only an IT Job: Think about uber or AirBnB: These are old Business Process, but with a new Point of View: Customer Experience. The last decades, the same processes were optimized, again and again. But to have great new ideas, the way of thinking has to Change. A new Mindset in all Management hierarchies are necessary /(German Blog by Matthias Wrede). Especially the Middle Management is trained for years, making Solutions for small Problem. Thinking in new ways has to be learned again. But this is trainable, like thinking as kids (German Blog of Easy Leadership, aka Marcus Riesterer). The next years, the culture of mistakes must be changed, too: To learn the new process Thinking will be a way of trial and error. Nice to read the Roadmap by capgemini. So courageos Leaders must take the first steps. The normally employees aren`t able to Change the way of thinking. This ways can bring new ideas for creating ways of customer satisfaction. Big Data or IoT are only Tools, to improve this, not the epic Centrum of the digital Transformation.

But I don`t want to Version contradict Julie Teigland completely: A CDO is able to drive the digital Transformation in an organizational culture and bring the Spirit of New Work to all departures. So should be “Service” not only a departure anymore, it should be the Driver for new products or ideas. Think about it: The digital transformation Needs Attention by the whole Management, not only by a CDO.

Making Corporate Boards More Effective

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Since we have joined so many board seminars, we like to give a recommendation.

The Harvard Business School is offering again its “Making Corporate Boards More Effecitve” program. It is one of the best programs we have ever attended. The next course is starting on the HBS Campus at 26th of July and will cost $9,250. The program fee covers tuition, books, case materials, accommodations, and most meals.

Practical advice regarding the German corporate governance system

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Professor Bernd Schichold is one of the leading figures in all questions regarding the German supervisory board affairs. Regularly he is writing in his blog about the newest developments. One of the most important developments is the DIN SPEC 33456, since non German speaking supervisory board members often need a reference point and practical advice with regard to the German corporate governance system.

Below you can find an abstract of the DIN SPEC 33456 „Business Process Guidelines for Supervisory Boards and Independent Directors“, which might be helpful:

„The DIN SPEC includes guidelines for organizational processes and business processes in oversight bodies such as supervisory boards, advisory boards and boards of directors. The guidelines are set to impose a reference model and a process map of the supervisory board for routines that occur regularly as part of the monitoring work. Potential users and target groups of these guidelines are advisory boards of various companies, especially medium-sized companies, family businesses, foundations and public companies. The reference model provides sufficient degrees of freedom and thereby flexibility of an enterprise customization. The DIN SPEC primarily is supposed to provide a business perspective of the regular running routine work of supervisory bodies.“

If you need more information, please get in touch with Bernd Schichold (one of the idea generators and authors of this practical guideline for supervisory boards) directly – or send us an email.