Why German companies fail at digital innovation: Tools
We Germans have a huge problem. We invented the car. We have some of the best engineers and 11 of the 100 most valuable brands. We’re the economic powerhouse of the European Union. But we missed a train, an important one. And it is pulling away fast, while we are chugging along with our stuttering Diesel cars.
That train is digital innovation.
As a founder of a digital-innovation agency, a former employee of a large German corporation and a start-up entrepreneur, I‘ve had the chance to play fly on the wall in the secret hallways of German companies. Small or big, they all have the same problems. Which brought me to make this series about reasons why German companies fail in digital innovation.
Last episode I focused on management and culture. This time I’m going to deep dive into something more specific: tools.
Tools that allow to create breakthrough digital products or services.
Tools that enable people to brainstorm and communicate efficiently across hundreds of miles.
Tools that enable us to be innovative.
And no, Germans most often can’t use them.
Episode 2: Tools
In one of my first projects I was asked to consult an internal accelerator program of a large German enterprise. We started off by discussing the tools we wanted to use. We chose Trello to organize the project and Slack to simplify communication.
However, a few days later one of the project members approached me in the hallway and apologized: “I had a discussion with our data protection officer (in German: Datenschutzbeauftragter). We’re not allowed to use neither Trello nor Slack. IT security regulations. I’m sorry.”
Welcome to 1998
Nobody wants to work at an old-fashioned company. Nobody wants to buy products from an old-fashioned company. And nobody wants to invest in an old-fashioned company.
Jeff Immelt
I’ve encountered Stone Age tools at almost every company I’ve worked with.
Communication within the team? E-Mails. No chat, no video-conferences allowed. Just imagine seven project members, sitting in front of a phone, having an expert interview, in a tiny meeting room, the line dropping a few times because of a weak signal.
Tracking projects and numbers? You better know Excel and MS Projects.
Booting up a computer? A perfect chance to grab a coffee because it takes 15 minutes until you are ready to go.
A whiteboard? Prepare yourself for a long ride with the purchasing department.
Creating a simple landing-page for a smoke test? Hire a developer. The cost: 8.000€, one-week development and no-reusable assets. Money you could use to buy a 260 months Weebly subscription. The use of any landing page builder most often is not allowed.
Any alternatives? “No chance”.
But why?
Ok, this one needs a bit of explanation. Germany is very strict in terms of data and privacy. We are going absolutely nuts when we hear anything related to data:
The cloud? An untameable beast distributing all our secrets without having any form of control.
Facebook? A corporation trying to enslave us by using data.
AI? A dark and evil technology full of abuse and horror.
Like so many things angst about potential surveillance is rooted in Germany’s past. Under the Nazis, the secret state police (Gestapo) had recourse to any and all available information in sniffing out what it considered to be crimes against the government — and without judicial review.
But as technology became omnipresent the public paranoia for informational self-determination shifted away from the government and toward corporations. The state of Hesse passed the first data protection law in the world in 1970. Afterwards Germany came up with the Bundesdatenschutzgesetz which is a data protection act that helps protecting personal data, stored and processed in IT systems.
However, the Bundesdatenschutzgesetz is purposefully broad to cover as much as possible. Companies operating in Germany have to make sure that data — an increasingly lucrative aspect of the tech business — is anonymized and stored in accordance with the law. Next to budget allocation and long processes, that is one of the main reasons why German companies have to stick to the rules and thus, their old tools.
But let me tell you this: every day we Germans talk about data thousands of businesses somewhere else push forward and just do not care.
The effects
Most German companies are losing efficiency and the motivation of their employees due to no or old tools.
Efficiency
E-Mail is familiar. It’s comfortable. It’s easy to use. But it might just be the biggest killer of time and productivity in the office today.
Ryan Holmes
Office workers send or receive 122 emails from the average company E-Mail account every day. If you assume a 9-to-5 shift, that’s a new piece of incoming or outgoing mail every four minutes. And we Germans intent to write these in the most perfect and formal way possible.
A monumental waste of energy. Just because everyone is using one form of communication doesn’t mean it’s the right one for every conversation.
Tools like Slack, Teams or HipChat enable us to work more efficient. They also create a setting that is much less buttoned-up than the typical corporate environment. Conversations have a tendency to look like text messaging or exchanges on newer social-media platforms.
And that is just for communication. Think about all sorts of tasks: creating a landing page, managing customers, talking with your customers, tracking your website visitors or just booting up your computer.
Motivation
There’s nothing worse than feeling creative and ready to tackle the job and not having the right tools.
Steve Richards
The simplicity of a user interface, a structured and fast search, helpful gadgets. Employees expect to work with tools they are used from their consumer environment. When they can’t use them they feel demotivated.
Some employees were so desperate that they asked me to talk to their supervisors and ask for a whiteboard or a new laptop which is not from 2008.
The impact far excesses the technology point of view by fostering an informal way of working, increasing the team spirit and the chance for success.
What to do about it
So, what can we do about it? Implementation of new software and hardware requires time, money and experts. German companies won’t fix this problem within a few days. However, if it is not even on their radar they will fall behind… big time.
- Large enterprises as well as the Mittelstand have two main jobs: producing their current products with great reliability and quality, but also be innovative and discover what new products or services to produce. Producing these new products and services require fast, reliable and motivating tools. If you can’t implement those due to data and security constraints, develop new ideas in spinoffs or spin-outs rather than internal divisions. These allows the parent firm to improves the allocation of resources and enable teams to act more freely.
- If cloud solutions are not an option, look out for open-source or private cloud alternatives e.g. for one of my projects we implemented Mattermost, which is definitely lacking some features of Slack but is a far better experience than using E-Mails.
- Consider harvesting low-hanging-fruits: modern laptops, whiteboards, markers, notebooks do not require to change culture, processes and security guidelines.
Innovation needs modern tools
Modern tools are the backbone for every step of the innovation process. They are the engine for enlightening ideation, profound validation, fast creation and growth.
How can you expect the same startup-speed from your employees if you don’t equip them with the same proper lightweight infrastructure? If employees aren’t allowed to use any top-notch digital products during their work, how should they know how to create them?
Let me get this straight: I’m not saying that we shouldn’t care about data or privacy. However, we need to use some common sense here and start thinking about workarounds. These days, innovation is not optional. The digital revolution will happen — with or without German participation. I would rather we participated.
Next episode: Politics
