Changing Corporate Culture (eBook)

A Guide for Top Managers

Peter Fischer (Autor)

eBook Download: EPUB

2021 | 1. Auflage
208 Seiten
REDLINE Verlag
978-3-96267-424-3 (ISBN)

Infos

The Key to Corporate Success Digitalization and new technologies are transforming society and the economy at a breathtaking pace. And yet, some companies seem to adapt to the changing conditions far better than others. So what is the secret to their success? Peter Fischer sets out to demonstrate that the key lies in corporate culture. After all, it is the people within a company who bear the responsibility for developing new rules and behaviors-in short, for creating nothing less than a company's DNA. His book lays out seven steps to creating a timely and sustainable corporate culture. Ranging from options for mobilizing staff to ensuring consensus in management-this is how a culture transformation succeeds and how a company becomes fit for the future.

Dr. Peter Fischer holds degrees in business administration and psychology. He is the managing director of an international consulting firm based in Hamburg, Germany, and has worked for many years as an organizational consultant and management trainer. His bestseller The New Boss was published by Kogan Page in cooperation with Redline.

Textauszug

CHAPTER 1

COMPANIES IN UPHEAVAL

For some time now, companies the world over have had to adapt themselves to new demands and conditions. Siemens, for instance, has struggled considerably in recent years to find the right strategy. Even a corporation such as BASF, which saw steady growth for many years, has suddenly come under pressure. Firms big and small, barely able to stand the strain, have been forced to file for bankruptcy or have been taken over by other companies. A cursory glance at publicly listed companies reveals that over a span of twenty years, almost 50 percent of the firms have vanished from the indices. The DAX, too, has seen many companies come and go in its more than thirty-year history. In fact, only ten companies have been continuously represented in the leading German index since DAX’s inception in July 1988, and even they now must demonstrate their change competence, be it Allianz, Bayer, or RWE.

Whereas the keys to corporate success were once size and efficiency, today it is all about the ability to change. Three trends in particular demand a company’s response:

1. Globalization

   Although globalization is no longer immune to controversy, the countries of the European Union are still tightly interwoven with the United States and Asia. In Germany alone, over six million jobs depend directly on trade with non-EU countries, and exporters include many small- and medium-sized businesses. Globalization means not only securing new sales markets but also constant competition with other firms. At the same time, protectionist policies and government intervention have been on the rise and have not made life any easier. Internationally active companies with global supply chains can easily fall prey to the chaos of such disputes.

2. Climate Change and Neo-Ecology

   Sustainability, environmental protection, and climate change are no longer niche topics and haven’t been for some time. In fact, these issues are in the process of reshaping the logic of the markets themselves. There was a time when ecology was deemed a task for the individual; today it’s considered a mission for society as a whole. The climate crisis has forced entire industries—above all, automobile manufacturers as well as the energy and chemical sectors—to rethink their strategy, adapt their product portfolios, and forge new business models. The impact of increased environmental awareness can be seen in other economic spheres, too, as a consequence of political regulations or a shift in consumer behavior. Not least, the issue of ecology implies that competition for limited resources will gather even greater momentum in the coming years, be it for oil, mineral reserves, or even water.

3. Artificial Intelligence and Big Data

   Artificial intelligence enables machines to carry out cognitive functions like those of a human. The term »big data« is understood as large quantities of information that can be stored, processed, and evaluated by means of special solutions. Both technologies are only beginning to change industries and markets globally and give rise to innovative products and services. But they are already proving to be of great assistance to firms, for example, in assessing future developments and their importance to a company’s given strategy.

The trend toward knowledge management by means of artificial intelligence and big data is, of course, a result of the global strides in digitalization over the last ten to fifteen years. This has heightened the challenges to companies even further and requires a radical shift in mindset. The digital tornado took off in 1994 with Amazon and hasn’t left a single industry untouched.

Figure 1: The Digital Tornado (Source: Universal Music 2015)

Beginning with the book and newspaper market, digital business models proceeded to conquer the once-privileged retail sector and many areas of the automotive, financial, and health sectors. According to a study by etventure in 2018, 35 percent of German companies still believed they could buck the digital trend and did not consider tech companies like Google or Amazon legitimate competitors.

They have been proven wrong as the Bertelsmann foundation discovered: In 2020, only one fifth of the one thousand German company executives surveyed believed their own firms to be on the cutting edge of future technologies like artificial intelligence or big data while 49 percent attested to having a lot of catching up to do. A wealth of prominent examples illustrate how vital this task is.

1.1 Under Pressure from All Sides

The German automotive industry—Germany’s leading industry—currently faces its greatest upheaval in its more than one-hundred-year history. Upward of two million jobs are at stake.

Whether it concerns e-mobility—innovations such as self-driving cars—or new mobility services, climate change and a resulting drastic shift in consumer behavior have rendered the old rules of the game obsolete and have ushered new competitors, mainly from China and the USA, onto the stage. However, the old competitors should not be discounted.

In 2021, General Motors announced that from 2035 they will only offer zero-emissions automobiles. And Japan’s auto industry already decided back in 2018 that they would halt the use of the internal combustion engine completely by 2050, with the exception of hybrid vehicles. And digitalization goes even further. Experts estimate that by 2030, automakers will generate up to 25 percent of their sales and up to 40 percent of their revenues using software and digital services. In short, hardware must give way to software, and this in an industry that has long believed IT was not part of their core business. This also means that traditional business models are currently being phased out to give undivided attention to the world of technology.

Ola Källenius, for instance, who replaced Dieter Zetsche as chairman of the board of management at Daimler in 2019, set things in motion on nearly all fronts to get the Swabian automotive corporation back on the road to success. In doing so, he identified two salient catalysts: digitalization and the colossal challenge of converting the company to e-mobility. Consequently, Källenius initiated a policy of stringent cutbacks that included the defunding of the carsharing model.

On this point, Källenius and Oliver Zipse, the chairman of BMW, agree. Upon taking over the position of chairman at BMW in 2019, Zipse also announced his intention to prioritize the development of alternative drive systems and the digitalization of products and services and indicated there were insufficient funds to indulge in too many experiments.

Not only auto manufacturers but service providers, too, need to rethink their strategy at a time when Google and Apple are making inroads into the auto industry. Hence, as early as 2018, we heard talk of »the greatest transformation in the company’s history« at Robert Bosch, the world’s largest automotive supplier.

Under the leadership of Volkmar Denner, the traditional automotive supplier is evolving into a connected services player (i.e., a company that renders its electronic products viable for the internet, thereby creating new business models— be it for driverless cars, automated parking solutions, or the networking of different means of transport).

For the moment, the combustion engine still plays a substantial role at Robert Bosch. Indeed, it has been recognized that a reorientation of this kind will be a lengthy process whose success largely depends on whether managers and employees can overcome the obstacles posed by silo mentality and departmental egoism. It stands to reason, then, that new products are being developed in interdisciplinary teams and consistently from a user perspective.

Continental, a notable competitor of Bosch, is proceeding in similar fashion. It, too, is convinced that the success of a company’s digital transformation not only depends on technology but also on the people involved, hence its focus on networking and sharing know-how through internal social media tools. The pressure to act is considerable. Nikolai Setzer, chairman since 2020, is expected to press ahead much more swiftly than before with the conversion from hydraulics and mechanics to software and sensor technology.

It is, therefore, clear that business models in the auto industry are undergoing fundamental change. Today, companies no longer define themselves just as automotive manufacturers or suppliers but rather as mobility service providers and tech corporations. The motor vehicle itself is becoming a »device on wheels.« At the same time, COVID-19 has shown just how volatile business is and how powerful countercurrents can be (e.g., no sooner had public transportation and carsharing trended than the private automobile experienced a sudden renaissance, all due to the pandemic).

Viewing the situation from a different industry, we can see that the challenges facing the energy market are not unlike those of the automotive industry. Here, too, not only digitalization but climate change as well is proving to be a force of disruption. Accordingly, Johannes Teyssen, head of EON from 2020 to April 2021, thoroughly restructured the corporation: The gas, coal, and hydroelectric power generation, as well as energy trading operations, were split off from the parent company under the name Uniper while other important parts of the company were exchanged with RWE. Today, the company is focusing on energy networks and energy sales, and...

Produkt-Details

• Erscheint lt. Verlag: 16.11.2021
• Verlagsort: München
• Sprache: englisch
• Themenwelt: Sachbuch/Ratgeber ► Beruf / Finanzen / Recht / Wirtschaft ► Bewerbung / Karriere
• Schlagworte: Business models • Changing Corporate Culture • Corporate Culture • Corporate Governance • Corporate Management • culture change • Digitalization • Disruption • Fischer Peter • Leader • Leadership • Management • Motivation • organization • Technology • Zukunftsfaktor Unternehmenskultur
• ISBN-10: 3-96267-424-1 / 3962674241
• ISBN-13: 978-3-96267-424-3 / 9783962674243