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The World in 2020 Prof. Dr.-Ing. Klaus Henning Esther Wingens M.A. Ingo Leisten M.A.

The World in 2020 Prof. Dr.-Ing. Klaus Henning Esther Wingens M.A. Ingo Leisten M.A. Moskau, 01. Dezember 2008. The World in 2020. Prof. Dr.-Ing. Klaus Henning

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The World in 2020 Prof. Dr.-Ing. Klaus Henning Esther Wingens M.A. Ingo Leisten M.A.

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  1. The World in 2020 Prof. Dr.-Ing. Klaus Henning Esther Wingens M.A. Ingo Leisten M.A. Moskau, 01. Dezember 2008

  2. The World in 2020 Prof. Dr.-Ing. Klaus Henning Head of Department of Center for Learning and Knowledge Management (ZLW) and Department for Information Management in Mechanical Engineering (IMA) of RWTH Aachen University Board member of the Institut für Unternehmenskybernetik e.V. (IfU) Dean of the faculty of mechanical engineering of RWTH Aachen University Ingo Leisten M.A. Research Assistant ZLW/IMA Esther Wingens M.A. Research Assistant ZLW/IMA and IfU

  3. Aixcore Group Aachen Consulting and Research Excellence in... Knowledge Management Information Management www.aixcore.com www.osto.de Change Consultancy Facilitating Accompaniment www.zlw-ima.com Implementation Realization Benefits Profitability www.ifu.rwth-aachen.de

  4. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

  5. The World in 2008 …and what will the world be like in 2020?

  6. Economic Areas of the Future 2020 North/South America 2012 2008 Russia Europe Japan China India Source: following Henning et. al (1999); Horizons 2020

  7. tumultuous and complex economic dynamics demography trap: young people will become scarce, particularly engineers knowledge as the 4th factor of production – Europe‘s chance Starting Scenario accelerated innovation due to global information and communication technologies – the new ‚aeon‘ of the mind the energy and climate bombs are ticking innovative fusion of technology will be of increasing importance sustainability China and Indiaare growing, Russiawill be strong again - scenarios 2020 global operating military services

  8. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

  9. Spaces of Perception world of increasing turbulences positive developments + - negative capacity to act space of perception developments perceptual capacity timeline of world history Source: following Henning et al (1999)

  10. Organization as a machine… Idea of Man: „Gear in a gear mechanism“, People need regulations, pressure and control, primary manpower. …task specialization, …work standardization, …central decisions, …standardized regulations, …no task overlapping, …disjuncture of manual and mental work, …disjuncture of accomplishment and monitoring, …environment = „disturbance“. Company Suggestion Plan six sigma Attitude to work: Do my job… …get to the objective and no further! ERP, DIN ISO, PPS „connecting data“

  11. Organization as an Organic System… Attitude to work: Advance my organization and myself. …contains people with their life and work processes, Dynamism …who has a part autonomous decision making process, …recognizes and proactively uses the exchange processes of the environment, …recognizes „organic“ feedback and backlashes and processes them proactively, …has creative redundancies! Warning! „Complexity trap“! Idea of Man: „Micro- Entrepreneur“! Doing interesting work, people are motivated intrinsically and don‘t need pressure. Holistic advancement & individual organizations Trend towards networking and matrix organization Special role of communi- cation

  12. A learning organization… …learns on 3 x 3 levels.

  13. Organization/Company… …as a machine …as an organic system Example: Knowledge Management connecting data connecting people Example: Management of Processes guide, norm, standard agile (vital) processes Example: Change Management „throw the lever“ (i.e. SAP-introduction) culture change Not „either … or“,not „first this, then that“but „both … and“, from the outset!

  14. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

  15. „All organizations are perfectly designed to get the results they get.“ Source: D. P. Hanna (1988)

  16. dynaxity customer requirements companies in a company fractalism working in teams flat hierarchies decentralization networks international competition single organizations from a salesman to a customer market globalized companies buy/sell Between Complexity and Dynamics… complexity zone 4 chaotic zone 3 turbulent zone 2 dynamic zone 1 statically traditional small businesses dynamics low medium high

  17. Contentment and Success on HighlyComplex Problems high Mission impossible Kami-kaze happiness proceeding ugly suicide low high chance of success Source: following Yourdon (1997)

  18. customer requirements Agility as a Capability… …of dealing with increasing complexity. complexity zone 4 chaotic zone 3 turbulent zone 2 dynamic zone 1 statically dynaxity networks tools human documen- current tation software internationalcompetition contract customer plan changeability single organizations from a salesman to a customer market globalized companies buy/sell traditional small businesses dynamics low medium high

  19. The Agile Manifest of Process Design Appreciation of values of the Agile Manifest: • We consider individuals and interactions to be more important than processes and tools • We consider executable processes to be more important than comprehensive documentation. • We consider collaboration with our customers to be more important than contract negotiation. • We consider the ability to react to changes to be more important than pursuing a plan. We therefore attach more importance to the former respectively values, but do not forget the importance of the latter. The agile manifest spotlights the human being and its interactions – with focus on running processes. Source: following Das Agile Manifest der Software Entwicklung www.agilemanifesto.org

  20. Twelve Agile Principles • highest priority = customer requirements • changeable requirements – using changes in favor of the competitive advantage of the customers • frequent delivery • co-operation of customers and manufactures • motivation of the personnel and trust • direct communication • working processes as benchmark • endlessly consistent tempo • excellent quality • simplicity • self organizing teams • continuous self-reflection Source: following Das Agile Manifest der Software Entwicklung www.agilemanifesto.org

  21. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

  22. Mission Purpose Transformation process Task/Core process Group core process Individual core process Ultimate anchor Input Cognition feedback (CFB) OSTO Model Environment System border G O A L S Output/ Outcome Quality feedback (QFB) Innovation feedback (IFB) Responsibility feedback (RFB)

  23. Synergy Focusing yes – but how? others (persons or companies) don‘t know others (persons or companies) know Concealing knowledge? „secret“ personalarea Sharing knowledge? „public“ I and my company know „unawareness“ I and my company don‘t know „blind spot“ Source: following Luft/Ingham (1955)

  24. Strategy: Sharing Knowledge others (persons or companies) know others (persons or companies) don‘t know I and my company know Concealing knowledge? „secret“ personalarea Sharing knowledge? „public“ I and my company don't know „unawareness“ „blind spot“ Source: following Luft/Ingham (1955)

  25. Strategy: Covering Knowledge others (persons or companies) don‘t know others (persons or companies) know I and my company know Concealing knowledge? „secret“ personal area „public“ I and my company don't know “blind spot“ „unawareness“ Source: following Luft/Ingham (1955)

  26. Our Approach others (persons or companies) know others (persons or companies) don‘t know I and my company know How can we accomplish the right balance between the two areas „secret“ personal area “public“ ? I and my company don't know „unawareness“ „blind spot“ business-oriented familiarity

  27. innovation information + networking data + semantics signs + syntax Process of Innovation… „We are drowning in information, but we starved for knowledge.“ John Naisbitt competitiveness competence + uniqueness process-oriented high portion in implicit knowledge acting + acting appropriately ability + wanting knowledge + reference to application high portion in explicit knowledge structure-centred Source: following North (1998)

  28. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

  29. Germany‘s greatest Strength What are the main strengths of Germany as a location for investment? % Interviewing foreign trader Data in Percent Source: following Ernst & Young (2007)

  30. German Schizophrenia • Export champion in 2007, • low growth, high unemployment, • depressed mood, • resistance to change, • German companies are competitive and growing.

  31. What do the Middle Class/ theHidden Champions mean to Germany? total 74,6% • Owner-managed companies(Hidden Champions) provide approx. 75% of the jobs. • Owner-managed companies are the job generator in Germany. Source: IfM Bonn, Statistisches Bundesamt (2004)

  32. Germanys Position as Export Champion is in Danger Comparison of German and Chinese export Exports Germany Exports China Prognosis of the SIHK/AHK show: China will overtake Germany‘s position as top exporter for the first time! Source: DIHK/AHK (Juli 2007)

  33. Germanys Strength: The Hidden Champions One of the biggest strengths of German companies is largely unknown: The Hidden Champions! They show how with the aid of people performance and high potential customer benefit worldwide competition can be beaten, and thereby how to experience huge growth.

  34. Brita GmbH „Being the No. 1 in the area of water improvement at the point of receipt." • founded in 1966, • manufacturer of water filtration products for private and commercial use, • has 750 employees, • turnover amounts to approx. 190,9 mil. € (2005), • world market position 1st. Source: http://www.brita.net

  35. Enercon: Grown with the Wind „Progression through innovation.“ • founded in 1984, • manufacturer of wind energy plants, • has more than 10,000 employees, • turnover amounts to 2.4 bn. €, • number 3 in the world, • owns 40% of the patents worldwide, • 20% more expensive than other companies. Source: http://www.enercon.de

  36. Tetra GmbH "Tetra at the forefront underwater." • founded in 1949, • manufacturer of aquarium, garden pond and vivarium material, • has more than 800 employees world wide and more than 410 in Germany, • turnover amounts to 200 mil. € each year, • world market position 1st. Source: http://www.tetra.de

  37. Hauni Maschinenbau AG „Our priority is our customer service based on partnership.“ • founded in 1946, • manufacturer of technologies and solutions for tobacco processing, filter and cigarette production, • has more than 3,600 employees, • turnover amounts to 629 mil. € (2007), • world market position 1st. Source: http://www.hauni.com

  38. Dürr Ecoclean „We place emphasis on our strength: Innovation and competence, global presence (especially in the growth markets), as well as the experience and the know-how of our circa 6.000 employees.“ • founded in 1974, • manufacturer of high-tech systems for the cleaning of work pieces in the automotive industry, • has 6000 employees, • turnover amounts to 1,476,6 bn €, • world market position 1st. Source: http://www.durr-ecoclean.com

  39. Haribo GmbH & Co. KG „Haribo signifies a colorful variety of products and an international network of distribution and production.“ • founded in 1920, • manufacturer of sweets, • has 6.000 employees, • distribution in more than 100 countries, • turnover amounts to approx. 1,5 mil. €, • market position number 1 in Europe. Source: http://www.haribo.com

  40. Rosskopf & Partner „From the beginning we focused on the advancement of our profile: the potential and the motivation of our staff.“ • founded in 1984, • manufacturer of solid surface materials and quartz materials, • has 120 employees, • export quota of turnover amounts to 50%, • turnover amounts to approx. 16 mil. €, • world market position number 1. Source: http://www.rosskopf-partner.com

  41. Knorr Bremse AG „Knorr-Bremse will nevertheless be maintaining its strategy for growth based on better penetration of mature markets, selective expansion of the company's fields of activity, investment in innovations and human resources, and accessing new markets.“ • founded in 1905, • manufacturer of brake systems for rail and commercial vehicles, • has 13.035 employees, • turnover amounts to 3,1 mil. €, • world market position number 1. Source: http://www.knorr-bremse.com

  42. What puts out the success ofKnorr-Bremse? Independency Powerful Organisation • autonomous industry concern • owner and chairman as one person • fast decisions and high flexibility • interest of the entrepreneur prior to interest of the stock owners • explicit focus on two business areas • peripheral organization: management of the regions and local responsibility for products, service, customers • leading by explicit target settings (MBO) • international leadership team • process orientation, „Business Excellence“ Market, Costs and Technological Leadership Staffs and HR-Strategy • high expectations of personnel regarding accomplishment and entrepreneurial mindset • target-oriented personnel development (junior executive team, trainee programs, training courses, workshops, ...) • „Knorr-Bremse Spirit“: high identification of the employees with the company • worldwide market leader, represented in all kind of markets • explicit overvalue for customers concerning security, function and LCC by systems integration • high R&D-effort to develop innovative systems solutions in the fields of brakes and on-board

  43. …the span succeeds! O Organisation long lasting strategies - short-term proceed expectation increasing dynamics of change - insecurity social stability - economic flexibility target group company - target group person ? ? customer focus - innovation capacity for innovation - rising cost pressure ? ? competition - cooperation work intensification - employees reduction ? ? ? ? ? ? ? ? ? T Techniques H Human

  44. Hidden Champions: Creating the Future dimension of life global networking T R E N D S 2020 process virtualizations conquest of smallest structures 2012 ? H ? H opening of work limitation of growth O ? ? 2008 ? ? ? ? ? ? M T H

  45. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

  46. From „either… or" to „both… and"

  47. The three Circles of the Hidden Champions outer circle external chances tight market focus inner circle internal skills powerful leadership belief in own strength continued innovation clear competi-tive advan-tage global orien- tation core ambitious targets selected and motivated employees customer proximity Source: Simon (1996)

  48. Formula For Success „Hidden Champions“ • objective: market leadership – no less! • concentration on markets and competences • global presence in target markets • customer proximity; value based, not price based • high innovation in product and process • integration of market und technique as motive force • local concentration of competitors, competitive advantages in quality and service • believe in own strength • more work than people, strict selection • committed leadership, authoritarian und participative, continuity Source: following Simon (1996)

  49. Conclusion "Hidden Champions" find their own way. They differ in nearly everything from other companies and do not follow the ideas of the modern management-gurus. Perhaps this is the most important lesson…

  50. The World in 2020 • starting scenario • spaces of perception • between complexity and dynamics… • design processes of innovation • …and how companies implement them • formula for success: „Hidden Champion“ • conclusion & recommendations

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