»Adapt culture & organization to digital transformation«

The digital transformation challenges companies on many levels – but it is manageable if executives directly involve their employees from the very beginning. We at viadoo Change Guides are convinced of this and act accordingly for our customers. Our founder Dr Dominik Faust gave an interview to the editors of the Würzburg-Schweinfurt Chamber of Commerce and Industry (IHK) magazine. Since we are convinced that this interview also has added value for our users, we are publishing it below. It is also available for download in German in our Change Management Knowledge Base.

»By no means fully on course for digitization«

Magazine: Two out of three German companies are continuing to invest in digitalization, according to the industry association Bitkom. Companies are most frequently implementing digital projects in customer service and logistics. So is the digital transformation of the German economy fully on track?

Dominik Faust: Not so long ago, we entrepreneurs had to go to a notary’s office in person if we wanted to change our company statutes, for example. In the meantime, the German Federal Chamber of Notaries (Bundesnotarkammer) has established an online portal through which notarial matters can be dealt with digitally and thus without unnecessary loss of time. We also see such digitalized processes for the benefit of customers in other business areas. But that is only one side of the coin.

What do you experience on the other side of this coin?

Dominik Faust: On the other hand, around one in two companies has problems coping with digitalization. According to a study by the Kreditanstalt für Wiederaufbau (KfW), the three main obstacles are the high data protection requirements, the poor quality of internet connections and a lack of IT specialists. Unfortunately, this is in line with our experience. So the German economy is by no means fully on course for digitization.

How can these problems be solved?

Dominik Faust: My team and I would love to provide every SME with a bus full of IT experts, a connection to a satellite internet network and a leaner GDPR version. But unfortunately we can’t do that. Instead, we are addressing another point that often prevents entrepreneurs from implementing the digital transformation. It’s about adapting the corporate culture and organization to digitalization.

»Partizipation and collaboration required«

What do corporate culture and organizational structure have to do with digital transformation?

Dominik Faust: Unfortunately, it is often overlooked that digitization is more than just converting analogue processes into binary codes. It is much more important to first critically question familiar processes before digitalization. New IT systems must be selected, internal structures and the composition of teams adapted accordingly. Every digital transformation requires managers to involve their team members in decisions and not force them on them. And for all employees, digitalization means more internal communication, more interdisciplinary and more cross-departmental collaboration. For many companies, these things are not yet an integral part of their corporate culture.

Such prospects of far-reaching changes in the course of a digital transformation certainly trigger something in employees, don’t they?

Dominik Faust: Yes, such changes usually unleash emotions. Some people mourn the familiar processes and team constellations. Others are afraid that they will be replaced by artificial intelligence (AI) or that their previous knowledge will no longer meet the new requirements. Still others are openly or covertly resisting the planned changes. Old and new conflicts break out openly. This leads to a drop in performance and, in over two thirds of cases, to a failure of the digital transformation.

»Project management toolkit is not sufficient«

What can companies do about this?

Dominik Faust: We recommend steering every digital transformation not with the means of project management, but with the extended change management toolkit. This includes additional ways and means of taking the human factor into account from the very beginning. It is an interdisciplinary, holistic and agile approach that is based on careful analysis and measures that are tailored to the individual case. However, this means additional effort.

An effort that pays off economically?

Dominik Faust: Any company can easily calculate the Return on Investment (RoI) of change management if it keeps the following facts in mind: Statistically speaking, companies that fail to manage change will waste their investment in over 70 percent of cases. In addition, unsettled specialists who the company actually urgently needs will leave. On average, each replacement costs twice the gross annual salary. In addition, there is a loss of productivity with every change. All these risks can be significantly minimized with professional change management.

»Show empathy and listen to your team«

You need to explain that. To what extent can the management of a change project minimize unwanted fluctuation and productivity losses?

Dominik Faust: By focusing on the people affected! This means that, as a manager, you put yourself in their shoes and show empathy. Listening to them. Addressing their concerns and fears. Asking for their expertise and involving them. As a rule, none of this can be done during a tour of the company or department. Especially not when the company reaches a critical size. Rather, it must be systematically planned, incorporated into concepts and implemented on an ongoing basis with successive measures such as workshops and dialog events.

And as a medium-sized company without its own change manager, how do you find a provider to help you manage digital change?

Dominik Faust: The two most important currencies in this area are trust and experience. I recommend asking around in your own network, asking for recommendations, arranging non-binding face-to-face meetings with potential partners and asking questions. Ultimately, it’s all about trusting this external team of experts to actively support you and your employees in planning and implementing the digital transformation. So that your transformation succeeds.

Thank you for the interview.

Please find the original (German) online version of the interview here: