Why leaders need to be more impatient

Why leaders need to be more impatient

Germany’s Mittelstand urgently needs organisational transformation to compete in a globally connected digital world. This requires an entrepreneurial cultural shift away from traditional product perfection towards a culture of failure and rapid time-to-market. Successful change requires courageous leaders prepared to question existing business models, develop new ideas and implement change consistently.

“Put the world on the spot, patience is unhealthy. It’s time for things to turn…”

Herbert Grönemeyer once sang. Is patience unhealthy? I would not agree without qualification. But when it comes to frequently overdue organisational transformations, patience often is unhealthy and can lead to the patient’s premature demise. In my view, the patient “German Mittelstand”, and thus Germany as a business location, has shown too much patience towards strategically necessary transformation.

Germany as a business location is close to my heart…

For my children and future generations, this is about preserving—and partly rethinking—a place worth living in.

A place of peace, freedom and lasting prosperity. We are in the middle of a global transformation, from an industrial society towards a digitally interconnected world, a world of artificial intelligence and a new reality we can still actively shape today so that we can continue living in peace, freedom and prosperity.

That requires an ecosystem in our country that sustainably seeks and uses opportunities in a globally connected world. It requires companies, organisations and people who move forward courageously rather than resting on past achievements. The building blocks of the new economic world differ from those that made Germany’s economic backbone, the Mittelstand, successful: no longer hardware—machines, equipment and cars—but platforms, marketplaces, ecosystems and scalable business models.

Traditional German medium-sized businesses think in terms of product optimisation and refinement, developing and producing with the deeply rooted “Made in Germany” conviction: “We definitely make the best quality, and it will prevail in the end.” But that was once. Product lifecycles are shortening dramatically, leaving too little time to “prevail in the end”. Speed, time-to-market and pioneering technological innovation matter: moving from an engineering-driven perfection culture towards a culture of failure—a minimum viable product mindset—as a guarantee of success.

Do not fear failure: being out in front is the new being on top…

Quality, and therefore “Made in Germany”, is defined as fulfilling existing customer requirements. When Steve Jobs presented the first iPhone at the Macworld Conference & Expo in San Francisco on 9 January 2007, it was certainly not a response to existing customer requirements at that time.

At its heart, this is about an entrepreneurial cultural shift in the backbone of Germany’s economy. It concerns people whose way of doing business has proved highly successful and is correspondingly deeply anchored in experience. I know what I am talking about: I am an engineer myself and have worked with many wonderful engineers over my professional career of more than twenty years. I also know how demanding it is to bring lasting change to engineering-dominated business cultures. Real cultural change does not happen in theoretical discussions or esoteric management seminars in remote conference hotels. As in professional sport, the truth is on the pitch: true cultural change succeeds or fails on the leadership shop floor of German businesses.

Experience shows that most organisations do not have an awareness problem. The need for change is recognised and discussed everywhere. Companies struggle with implementation, often because they fail against the concealed resistance of leaders, employees, employee representatives and collective bargaining partners. These resisters are far too clever and have learned skilfully to let countless programmes, initiatives and projects sink into ineffectiveness. Another programme is sure to come. If that does not help, along come McKinsey, BCG and others with even more programmes, Gantt charts, PowerPoints and Excel marathons. This is how change fails. Everyone is busily occupied with themselves. Hooray for full employment in Germany, while the USA and Asia, China in particular, divide the technological markets of the future among themselves.

The clock is ticking: how can change succeed?

How can companies transform successfully and in time? How can Germany’s Mittelstand preserve what is traditionally worth preserving while consistently questioning existing business models and established ways of doing business? How can leaders in these organisations motivate people on the leadership shop floor to do business differently from what their experience has taught them?

First, we need entrepreneurs and leaders who really want to make a difference rather than merely satisfy a status-hungry ego. People who reflect on themselves, develop willingness and ability to change, and a feel for people and what is feasible. Who repeatedly train like real professionals and are present on the leadership shop floor of change projects, supporting and lending a hand where needed, rather than allowing themselves to be showered with endless PowerPoint presentations and perpetually green status lights in endless meetings.

We need people who critically question their own business models and develop ideas for the day after tomorrow—business models with a future—that are so clear and simple they need no PowerPoint to communicate them and can therefore inspire others. People with an equally clear plan for tomorrow and the coming weeks, who go beyond declarations of intent and, despite resistance, transparently and consistently implement change in small steps today. We also need leaders courageous enough, when necessary, to make generally overdue personnel decisions transparently and consistently today. Above all, we need diverse leadership teams that debate controversially and constructively internally in pursuit of the best solution and present a united front externally.

And when it comes to change, leaders may be impatient. I would even say they must be impatient!

ONLY THEN CAN CHANGE SUCCEED!

Because it is time for things to turn. It is time for GAME CHANGE in Germany’s Mittelstand!