Lupe Edition 19

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Information about Lupe Edition 19

Published on March 16, 2016

Author: AndreasKambach


1. 19

2. LuPe 19 Liebich & Partner LuPe 19 Liebich & Partner »I also look for things, which I don’t look for,« goes a quote from Karl Lagerfeld when reply- ing to the question of which criteria he uses for collecting books ( F.A.Z.newspaper, 23.01.2016 ). What has a fashion designer’s person- al bibliophily got to do with manage- ment? Lagerfeld’s words express an open approach that companies need if they want to think and act innova- tively in the age of digital technolo- gies and their incalculable possibil- ities. An open approach that first enables the develop- ment of the unexpected and fascinating demands of customers. However, many compa- nies still rely on simply repeating their established success models. Out of spite or uncertainty, whatever, they still hope that the upheaval caused by Industry 4.0 and the Internet of Things will have no consequences for them. Those who participated in this year’s World Economic Forum in Davos think differently: The use of digital technologies is changing our world with respect to commerce, the econo- my and society. Companies are not powerless with regard to this develop- ment. Provided they let loose. Always conscious of the extent of the search for something new. Digital technolo- gies act as game changers. It’s no longer enough to develop material goods faster, or to improve efficiency in value chains. It’s about seeing inno- vation in a completely new way: inte- grated. Everything needs to be put to the test − products, business models, organizational structures, production − Wilfried Bantle, Chairman of the Board at Liebich & Partner Dear readers, The topic of this issue of LuPe is the existence and elimination of power and authority. It is not within our power to prevent the progress of digital technologies, but what we make of it is. It’s time to get to grips with the new rules of innovation (page 3). The same goes for power structures within companies. Deterministic control systems are failing in the face of the growing unpredictability of economic developments. In the future, success will no longer be managed, it will be moved and shaken (page 4). Where people work together across departments or companies formal authority loses its significance. It’s not the hierarchical position that decides how influential a manager is, it’s actually his/her personality (page 5). Management without authority seems to be the order of the day. But not everywhere in the world. International companies would be well advised not to underestimate the power of cultures (page 6). Do you remember silver bullets? You don’t find them often these days. But start-ups can show us how to reach goals even without the perfect plan: by going one step at a time (page 7). In the banking sector the Volksbank in Heilbronn, Germany, has done something incredible: It got rid of its hierarchies in 2011. CEO Thomas Hinderberger talks about their experiences since then (page 8). So let’s do everything within our power and authority to make entrepreneurial progress. Yours, Wilfried Bantle Digital power The game is changing. »It ’s about seeing innovation in a completely new way.« »Digital technologies act as game changers.« New technologies open up new opportunities and, according to Christoph Dill, are no reason to bury your head in the sand. He suggests, first of all, that you test the digital options, unbias- edly, explore them playfully and see what’s good for the company. and brought into line with the overall context of customer demands. Made possible by digital technologies and big data if used as relevant real-time data rather than retrospective collec- tions of data. In the future, values will be created, for example, by getting rid of the differen- tiation between material goods, ser- vices and software and by looking for innovative combinations beyond cor- porate boundaries, in networks with partners. But be careful, such service mergers change the competition: The number of competitors will increase and come unnoticed from unforeseen directions. One success factor is still speed, but the conditions have changed: It’s no longer about getting the best product with proven German thoroughness and as quickly as possible onto the market, but conquering the market, as quickly as possible, with a good idea. The 50 per cent prototype, which you got market feedback on, is superior to that 120 per cent engineered solution created in the private cham- bers of the company. Involve the users in the development process, align the products exactly to the users, bind cus- tomers early on and tightly. Then latecomers to the market will have only limited chances. The overall conditions for innovation are constantly chang- ing. What applies today is probably already obsolete to- morrow. Not everything can be thought through upfront. There’s only one solution: Don’t waste time, instead make decisions quickly and in a decentralized way, in agile in- ter-disciplinary organizational units which are close to both the market and the technology. And to minimize the risk, do only those things that you can keep track of. LuPe Magazine No. 19 March 2016 Published 3 times /year Publishers Liebich Partner Management- und Personalberatung AG Gewerbepark Cité 20, Marstall Unterlinden, 76532 Baden-Baden, Editorial staff responsible for the contents / Chief Editor Wilfried Bantle, Liebich  Partner ( LP) Editorial team ( LP) Myriam Laila Link, Norbert Wölbl, Wilfried Bantle Edited by Daniela Dannert-Weing, Kißlegg, Design and Layout 2k kreativkonzept, Karlsruhe Contributors Dr. Christoph Dill (LP), Steffen Hilser ( LP), Werner Dieterle ( LP), Luis Weiler ( LP), Andreas Kambach ( LP), Felix Pliester ( LP), Tomas Schiffbauer ( LP), Daniela Dannert-Weing Translated from the German Helen Rode, Baden-Baden, Pictures Consultants: Marcus Gernsbeck Consultants page 3: Beatrix Krone Photo Page 8: Volksbank Heilbronn Drawings/Illustrations Jürgen Weing No. of copies 9,400 Change of address Notification via E-Mail to All care has been taken to ensure that the information in this magazine is correct, however we accept no liability. Imprint

3. LuPe 19 Liebich  Partner LuPe 19 Liebich  Partner The world is becoming more complex, more volatile, more unpredictable. There are fewer and fewer rules to rely on, and more and more opportunities to choose from. The consequences of decisions are vast and incalculable. Key figures provide only virtual secu- rity. And things are getting even faster and faster. Difficult times for manag- ers. It’s no longer enough to simply run a business, you have to be pro- active in the markets. Doing business successfully needs, once again, more than hierarchically defined authority. Movers and shakers in power Technologies, markets and employees are changing. On the management boards of companies technocrats are reaching their limits. A case for managers who are movers and shakers. The revival of the movers and shakers. Like in the economic boom of the 1950 s and later, we need managers who stand for content. Managers who don’t just want to make money no matter how, but who can identify with »their« company and its values, who are committed to what they do and who, with their instinct for mar- kets and people, can move and shake things. In the 21st century this assumes that movers and shakers manage to pass on their enthusiasm to the employees. Instructions and commands are just as out-dated as targets expressed purely in key figures. For a start, employees »Let’s wait and see when he makes a mistake.« Those managers who say such phrases are part of the problem and not part of the solution, main- tains Steffen Hilser. Successful management is also a question of a healthy corporate culture. »Managers who, with their instinct for markets and people, can move and shake things.« Even if a manager has more than enough profes- sional experience, without the right personality this is the wrong person for international sales organizations, maintains Werner Dieterle. When we do away with formal authority, we expect more from people and their personal ability to influence others. »If you want to go quickly, go alone. If you want to go far, go with someone.« According to Luis Weiler this African proverb shows which leader- ship challenge you will find in teams of emplo- yees with a lot of, possibly cultural, diversity. today want their work to be purposeful. And then it’s not only the reaching of targets that’s important for the com- pany, but the unquantifiable »how« the target was reached is also worth something. It would be a mistake to see this as a threat. There is potential for sustainable success here. There’s something else that makes today’s movers and shakers different to those of the economic wonder era: Considering the growing complexity and speed it would be presumptuous to think that managers could continue to make decisions on their own. The team behind or beside them is becoming more and more important. Only those who are brave enough to let go of authority, to let in the knowledge of their employees and to rely on their expertise, can manage a company concretely and conclusively. This also means being brave enough to go forward in un- certain situations, errors are inevitable, and consequently having the courage to correct oneself. The strategy is the road sign and determines the crash barriers. It defines the operational framework of the movers and shakers. What’s crucial is that progress is monitored regularly. Monitoring means reacting flexibly to what has happened: gaining knowledge, taking it on board, and adjusting the course if necessary. »It ’s no longer enough to run a business.« Leadership without authority IOWA ( short for Influencing Others Without Authority ) is a management approach from America. It deals with the question of how to influence a team without authority and control so that, in terms of a project or a company, it can move things forward. This form of leadership without authority is always important when em- ployees, who are formally inte- grated in an organisational unit, have to manage employees in other organizational units, oth- er companies or virtual teams, even though they are not their superiors. You often find this in certain projects and everyday challenges in matrix-like or- ganizational structures. Heads of business units, product man- agers or business development managers in international sales organizations are familiar with the problem. The »this is how we do it« ap- proach of German companies, still popular despite initial counter-approaches, will fail in such situations. Instead of a top-down, we need a lateral, eye-to-eye approach. Not everyone can do this. If you want to give people orienta- tion, be influential and convince them all to move in one direction, you need even more than professional compe- tence and communication skills: you need the right person- ality. You have to be able to show appreciation for other people and people from dif- ferent cultures, show an in- terest in them, engage them, build trust, share knowledge, to support, help and advise them, selflessly. You can’t train this skill, it’s only authentic if it you are really like this. The proposition: a manager’s personality has a 50 per cent influence on how successful he/she is. Professional and communication skills, such as the ability to address and re- solve conflicts in heterogene- ous and/or multicultural teams, account for 25 per cent. The latter two can be learnt. Per- sonality, however, is devel- oped: only attributes that are existent can be nurtured and further developed. For HR decision-makers that means: leadership without au- thority requires a different kind of leader. Not always the pro- fessionally experienced people are the best choice, they have to have the right personali- ty. In personnel selection and recruitment processes the re- quirements and search profiles need to be matched. As re- gards personnel development, coaching is more important than training. But be careful: leaders who can manage without authori- ty, are not demigods who manipulate people using their charisma. In teams without formal structures it’s not about controlling people, but about reaching goals together. This means that leaders have to be willing to listen, to learn new things, to continue to develop within the group. Mutual feedback sessions are obviously of great significance here: both employee and management performance are equally up for discussion. Companies go international, enter into part- nerships and alliances. More and more, peo- ple are working together in teams spanning departments, different companies and some- times also different countries. Formal struc- tures aside. Leading these can only be done without authority. In which case a manager’s personality is much more important than his / her professional expertise. From person to person. »A manager’s personality has a 50 per cent influence on his / her success.«

4. LuPe 19 Liebich  Partner LuPe 19 Liebich  Partner One person or a group of people come up with an idea. Seems like a good idea at first. Then you just can’t get it out of your head. And eventually the crucial question comes up: »And how is that going to work?« What impresses about some start-ups or, for example, the Urban Garden- ing Movement where city dwellers fill up public space with vegetation, is that the people involved are not put off by this killer phrase. Their answer: »No idea, we’ll have to try it.« Are they declaring their imprudence, their naivety, or perhaps their natural feeling for reality? The fact is that we are used to scrutinizing our ideas from back to front, and to planning their implementation whilst taking into account all the possible ifs and buts. We want to avoid uncertainties and achieve the perfect solution. This doesn’t work very often. Especially in innovative or larger projects, it’s working less and less often. And it’s not usual- ly due to lack of competence but to increasingly complex, fast-changing circumstances. So can we learn something from start-ups and social initi- atives? Maybe that it is not a mistake to admit you don’t always know the perfect solution or the perfect way to reach it. And that this is absolutely no reason to discard a good idea. If they do not see the big picture, to- day’s entrepreneurs simply let loose in small steps. They gather expertise, look at what works and what doesn’t, step by step, and this way they can keep their options open to turn back any time. This doesn’t promise stag- gering success in one swoop, but it does help to prevent severe failure. And it also meets the demands of a changing environment. What’s right today may be wrong even next week. It’s better to assess what Do it We all need to learn how to deal with uncer- tainties. According to Tomas Schiffbauer having confidence helps, even if there is only a rough plan, using your own skills and those of your employees to reach your goal. The word power has rather negative connotations in our culture, yet in others it sounds positive. This is one of the challenges for managers in globally active corporations. With or without ? » The British and the Germans can manage without a boss.« The stages of intercultural competence: I don’t know that I don’t know anything. I know that I don’t know anything. I know that I conscious- ly act differently. I unconsciously act differently. According to Andreas Kambach the last stage is virtually unreachable. You will never really be- long to of a different culture. Asking someone in India for directions to some- where is meaningless, says Felix Pliester. Even if an Indian person doesn’t know the way, it would be a bad deed if he didn’t help. Thus, the in- quirer is sent in the same direction he is going anyway, or one that looks nicer. »And how is that going to work?« »You’ll land the perfect solution along the way.« A classic corporate conflict: Sales needs a small batch of a special product for a key customer. Production blackballs the request; the set-up costs are too high. There is no solution. Who’s to blame? The French would say: The boss should have listened to both sides and made a decision. The British would say: The heads of sales and produc- tion ought to train their negotiat- ing skills in a workshop. The Ger- mans would say: Something’s wrong, we need to examine our processes. This came out of a case study led by Owen James Stevens at the INSEAD Business School in France. And what we notice is, the British and the Germans can manage without a boss, the French expect the boss to provide the solution. For social psychologist Professor Geert Hofstede the responses relate partly to the different Power Distances of the cultures. Power Distance indicates the extent to which societies accept or expect inequalities and hierarchies − in the German language there are 2 ways ( formal levels ) to address some- one (»du« and »Sie«), in Malaysia there are 33 different levels. The cul- tural Power Distance is particularly rel- evant to leadership. It influences the leadership style that managers prefer, the leadership style employees accept, and how they behave if they disagree with their boss. In England, Germany or the US, the Power Distance is low. In these coun- tries things are discussed openly and a manager relies on the expertise of the employees. In many Latin Amer- ican, Asian or Arab countries this is quite different: These are cultures with a high Power Distance and here the staff just nod and keep quiet. The boss must know what he wants and must tell them, or he is seen as weak and disoriented. He needs to have op- erational knowledge and the ability to acquire detailed knowledge of numer- ous topics. Managers and HR decision-makers need to be aware of the culturally quite diverging notions of leadership and power: If you are managing a multicultural team, it is pointless to keep switching between more and less power-oriented leadership styles. Your best chance is to draw on your own extensive international experience and allocate tasks within the team on a culturally based system. Should you need creative exploration, employees from low Power Distance cultures will be the right choice. When it comes to checking feasibilities by applying predetermined rules, people from cul- tures with high Power Distance will demonstrate the right skills. Ideally, the team members then perceive the leadership style within the sense of their own cultural identity. When a German manager heads a team from another country, the depth of his/her intercultural experience is more important than the breadth. Be- the next step should be out of the current situation. You’ll land the perfect solution along the way. Moreover, and ahead of time, entrepreneurs are using communities to debate whether and in what way their ideas may be useful. Based on the belief that the perfect solution will not be found in the specifications of the com- pany, but only in cooperation with the users. The motto being: democratization of product development. This can be complicated and irritating. But it’s better if users express their criticism in advance than as an afterthought when, at the expense of market success, nothing can be changed anymore. Can we transfer these new thought and action patterns to established companies? How is that going to work? You’d have to try it on a small scale, for example, in the context of innovative or creative projects. The Fiat Group proved it could work in 2006 when they used crowd- sourcing on the design and features of their new Fiat 500. A plan , a good plan … cause the manager usually has to be more that just a leader. In Russia and Spain, for example, the manager has got to be a »friend«, in Asia the »head of the family«. If a manager does not play these roles properly, there may be the risk of inner rejection, especially in some countries with high Power Distance. Fatal for the manager, who realises this way too late. The power of cultures

5. All that came out was: » To sign the holiday request form.« Done Banks are seen as conservative. But in 2011 the Volksbank Heilbronn eG did away with its hierarchies. An interview with the CEO Thomas Hinderberger about leadership, responsibility, insignia of power and people you cannot change. LuPe: Mr. Hinderberger, what made you come up with the idea of abolishing hierarchies in a bank? Thomas Hinderberger: We are a cooperative and, as such, democratic in our origins. It’s not me as the CEO who should be looking down at the employees from my chair, but the other way round. Hence, the idea to go back to the upside-down structure. In a future-oriented workshop entitled »Shaping Cooperatives Together« we talked to employees about, for example, exactly what they need bosses for. All that really came out was: »To sign the holi- day request form«. If you think that hierarchy really means the sacred rule, well I can only say that I don’t need that. An »I’m the boss so do it my way« attitude doesn’t go with my humanistic ideals. How did you organise the transition to a non-hierarchical bank? There will always have to be managers, objective and pro- fessional leaders. Our issue was with the disciplinary side, to do with some individuals not being able to rule others. Our aim was: management makes decisions only in groups and these should result from the function and not the posi- tion. We removed the managers at that time from their po- sitions and developed a hierarchy-free organisation struc- Thomas Hinderberger has been a member of the board of the Volksbank Heilbronn eG since 2004 and its CEO since 2009. The bank was founded in 1909 by Abraham Gumbel as the cooperative Heilbronner Bank Institu- tion and has approximately 360 em- ployees and 19 branches. Its focus is not on maximizing profits, but on pro- viding benefits for its individual mem- bers. The vision: We will become the benchmark for all cooperative banks because we live and breathe our sup- port concept uniquely, consistently and successfully. ture. In the centre is the cooperative member, concentrically around him are the functions, the services which fulfil our mission for the member. That includes member related functions such as advisory services and also non-member related functions such as opening the doors of the bank every morning. Management is performed by functionally responsible persons: employees who not appointed from above and for an undetermined peri- od, but self-nominated and willing to take on responsibility for a while; this was what we wanted. Was it difficult, as the overall head of the hierarchy at the time, to let go of authority? Not for me. One challenge, however, proved to be the topic of responsibility. The leaders are supposed to delegate responsibility, the employees are sup- posed to take on personal responsi- bility. In theory it works, but – and I wouldn’t have believed this before – the employees actually, very quickly, delegate the responsibility back again: Boss, I need a decision. And the deci- sion is made according to the old style. We had to find out that employees need a hard and fast framework. In the management team we were able to prevent delegation back through the ranks. Group decisions are unan- imous and don’t have to be majority decisions. In this way we can avoid responsibility being passed back to the board when there is some disa- greement. How would you sum things up? In our bank no one has more author- ity and also no power insignia. Some- one with a functional responsibility is a primus inter pares, without any status symbols like his / her own office or a special phone. You can also re- nounce that functional responsibility without losing face. What you have to realise is: freedom from hierarchies only works with the people. And you really can’t change those in the work- force who can’t cope with this. When we are recruiting we take a good look at personality. Someone motivated by status symbols, for example, would be out of place at our cooperative bank. He or she would be okay at any other bank. Was it the right thing to do? I would do it again.

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