What has already been an open secret before is now being impressively brought to light by the corona virus: Germany has a lot of catching up to do when it comes to digitalization. The article explains why focusing is essential for CDOs and other pioneers in order to digitize a company. Because only those who know exactly where they want to go can actually arrive there.
Has Germany missed the boat in terms of digitalization? There is much to indicate this and there are countless studies on the subject. Even before Corona, this had already reached the executive floors of large corporations. More than 58 percent of managing directors and board members say that their company is still a latecomer to digitalization, and three percent even think they have missed the boat completely. Only every third company considers itself a pioneer in digitalization. This is the result of a representative survey of 502 companies with 20 or more employees conducted on behalf of the digital association Bitkom. The Digital Job Monitor of the “Handelsblatt” is also alarming: “Almost a decade after the introduction of the concept in most companies, the change to Industry 4.0 has not progressed beyond the level of individual projects,” according to the latest findings. The consequence: The demand for digital specialists is collapsing.
Digitalization – the great unknown
At FocusFirst we support many digital pioneers in well-known companies. They are often great strategists with good ideas. It’s not because of the strategies. It is a matter of focus. Due to the pressure “Our company could miss digitalization”, many companies fall into rigidity, into powerlessness. In most cases, the “de-focus” starts at the beginning – when a mandate is given by the management board or supervisory board – sometimes it’s just a succinct “Make us digital” – three words. They don’t know what that means and what the path should look like, but they don’t care. And then the Chief of Digital (CDO) heads off.
Transforming processes, objects and events
In my opinion, CDOs are often left alone and need a high degree of self-discipline to focus on what needs to be done first. Digital can be just about anything and everything.
Because although digital, digitalization plays a major role in almost all areas of our lives and work, for many it is still the great unknown. For some, digitalization is a job miracle that may even create new jobs, while for others it is a job killer that makes some jobs redundant. For IT professionals, digitalization is always associated with the implementation and maintenance of new systems.
If only the term digitalization is considered, it generally refers to the changes in processes, objects, behaviour, mindset and events that occur as a result of the increasing use of digital devices. But the least corporate leaders who are asking for the company to finally go digital know this. What they quickly lose sight of is the goal.
What is the specific goal?
If the goal is not clearly defined, the path often remains vague. One thing is clear, however: it can no longer continue in the way things are today. And this is precisely the big problem we face in Germany when it comes to digitalization. Many know what they no longer want. Few know what they want in concrete terms.
Not much time is taken to clarify the goal. This is not really crowned with success. It would be as if the searcher were to enter the keyword “Just get away from here” on Google Maps instead of the target. They get away, but with a 1000 percent certainty they won’t get to where they want to go. And because this is not clear, managers and employees alike do not focus on the big goal. Because it simply does not exist.
At Allianz in Munich I met Kai Czeschlik, at that time still Chief Digital Officer. He came to the insurance group to tackle the big goal of “digitalizing the Group end-to-end”, as he says. A goal that can only be achieved with one thing: focus. So how did he manage that?
Not losing sight of the big, common goal
“When I compare Allianz with Amazon, it is terribly unfair, because Allianz is 130 years old and Amazon was created when digitalization began. But when I do compare, the first thing that strikes me is that at Amazon the whole company is more or less pursuing a single goal.” Their main goals are customer satisfaction and loyalty. This is what the company stands for. “Irrespective of this, however, it is certainly the value of the shares, i.e. the company value. Every employee benefits equally from this.” The simple, clear and understandable goal for all employees is ultimately the share price.
We need to reinvent ourselves
In comparison, Allianz is very vertical: a pronounced and daily lived hierarchy, high division of labour, many board members. “I don’t judge that, it’s just the way it is. In such an environment you already have different goals per se throughout the group”. How did he manage to make everything digital ‘from end to end’ in this environment? “If this is to work at all, then stakeholder management is essential. I actually spend a great deal of my time here with convincing people. First of all, we acknowledge how successful a company is that makes eleven billion euros in profits every year. But then we tell our story. And that is that we have to reinvent ourselves. Because we live in an age in which all developments are happening so fast that nothing can compare with what we have experienced in the past 15 or 20 years,” says Czeschlik.
Today, Allianz has long been one of the pioneers in the field of digitalization. As early as 2014, the insurer invested 100 million euros in setting up the IT infrastructure and developing a special car insurance policy for online sales. In the meantime, the investment sum is likely to have at least doubled.
But how did Kai Czeschlik manage to focus on the big goal of “digitalization”? “The focus is on the customer and how they perceive and interact with us in the future. Allianz basically already knows exactly where it wants to go, that’s the positive.” Czeschlik focused on a big topic and then divided it into small feasible steps. It is important to start small, agile and in sprints, and then to produce successes and always show and explain them to the world outside, in order to gradually reduce the existing scepticism.
This way we won’t drive into the trenches.
In concrete terms, this means that as soon as the goal has been specifically defined, the right options can be generated and selected. Just like with a navigation system: Now the route can be calculated. Do we always arrive on time? No, but with a tolerance of up to ten percent, it works pretty reliably. But much more important: We arrive at our destination safe and sound. And we don’t drive into the trenches.
About the book
This interview is an excerpt from the book „DO EPIC STUFF! – Leadership after Change Management”, published by Campus Verlag. Transformation expert René Esteban explains together with senior leaders of today’s business world how to achieve challenging goals together. Learn more about the book and order it directly.
About the author
René Esteban is the founder and CEO of the consulting company FocusFirst GmbH. With his team he supports executives in the global corporate environment to achieve their most challenging goals with focus and inspiration – and at the same time to develop the corporate culture towards more empathy and humanity.