Cooperation between companies and universities are a precondition for satisfaction on both sides

We find companies claiming, to get students, who are not prepared for their jobs and universities are in respect of their research activities, to strong in focusing on themselves and not on the needs of.

Let us define the aspects, needed, to achieve sustainable development:

The knowledge of our society is doubling all 3 to 5 years. This causes consequently a continuous change of products, forms of living styles and working styles and has influence to the whole society.

Climate change and CO2 reduction and the different ways to approach this issues, are an example, how things are developing. In all cases, we have three elements to look upon: Science, Economy and Society represented by politics.Science, Economy and Society have to work seamless together, if we would like to achieve satisfying living conditions. As closer all parties are working together, as better will be the outcome.

Now, I come to the special role of the universities. The universities are doing research and are developing science. On universities, young people study and build up their capabilities.

For industry and companies, the universities are source of two important elements: research results and skilled people. On this slide, we see how collaboration between university, society and companies should look like.

For companies it should be a high interest, to keep a good collaboration with the universities.

What are the possibilities to collaborate with universities?

I listed here only a few possibilities:

– giving internship places for students

– giving topics for master thesis and help working on this subjects

– giving research contracts to the universities.

– Participation on research projects with more than one university and other companies

– Companies can give lessons about practical experience (giving guest lectures)

– The universities have some equipment, what companies can use from time to time (electron beam

   microscope, laser welding, …)

– and so on

This brings a win-win-situation for the university, for the students and the companies.

This kind of collaboration helps very much, to align the direction the universities are working with the practical need of the companies.

There is always one claim from the companies:

The flexibility and the readiness for new solutions and the speed, is not always satisfying in working together with the universities.

For this the targets for the universities and the companies needs alignment.

Let us conclude:

For all companies the sustainable development is necessary. For this, the companies need excellent people and should get input from research results.

Access to these elements, companies can find by good collaboration with the universities.

Close collaboration between companies and universities brings benefits to both sides.

It is necessary to synchronize speed and interests of all parties.

In a continues changing environment, parties have to work close together, to assure; they are satisfying the demand of their customers. Universities and companies are both, customer and supplier, for each other.

Industry 4.0, an overview and definition

Let us start to define, what we understand under industry 4.0.

We define it as the 4th industrial revolution and it describes not only a kind of production organization, it describes also new products and new lifestyles. All this will be influenced by industry 4.0. Let us remember about the industrial revolutions before:

  • The first industrial revolution was driven by the invention of the steam engine. With this invention agricultural production and industrial mass production started
  • The second industrial revolution took place between 1870 and 1914 and is also known as the technological revolution. Invention of electricity and the mass production by Henry Ford have been important events.
  • The third industrial revolution has taken place between 1970 und 1980. It is often called the digital revolution. PLCs, Computers and the Internet have been developed and the analogue world became digital.

The fourth industrial revolution we are shaping now. Overall connectivity and artificial intelligent, powerful computers,are a precondition for this.

Due to this developing Trends, we see a lot of rapidly developing areas. Here we see again: we are not only talking about production. IoT (internet of things) Smart cities, smart products and services, smart devices, robots and cyber physical systems will not be placed in production only, it will be placed in our products and services, we are using every day.

But if this products, organisations and services will impact the live of the whole community, we should work out the salient issues.  In the picture below you find on the left side the issues, we work on and on the right side the issues we must consider, to get a readiness of the society and the politic for industry 4.0.

I have since about 4 years a watch, measuring some basic parameters of my body and gives me the possibility to track some activities, which in my opinion are helpful to stay healthy. Until today, I have nearly daily discussions about the sense of this device and what it really improves on my live conditions. I feel better, to know these parameters and get motivated, to set myself targets and try to rich them.

I use voice programms to write notices and minutes during driving in the car and I use Alexa at home to entertain me and control subjects. A lot of people are sceptically about these products.

Smart grids to bring the diversified energy systems together or just in time traffic announcements, as well as the information about free parking places in the town, are subjects, I like to use, because they are improving my quality of live.

But these statements are improving conditions for me. I believe, the way, to convince the bigger share of the society that these developments are improving quality of live, will take a lot of efforts for explanations.

Because, most people are thinking by the name “industry 4.0” on production only, let us also start with a view in production.

The picture above shows some elements, which are standards in a smart factory.

By using intelligent smart routing, customer orders are timely correct planed for production and the planning is considering an efficient manufacturing process. All operations planning is linked up to make it possible, to plan for an overall optimum. Predictive maintenance assures predictability of the stability for machines and processes. To define the role of people in the process becomes important, to assure, the advantages of the systems are really used.

In manufacturing are normally high investments involved and often a proper engineering knowledge is available. Due to this conditions, Industry 4.0 is most advanced in production at present time.

But the advantages of connectivity and with the availability of a lot of data, much more areas are becoming early adopters.

Using Big Data analysis and implementing more and more Artificial Intelligence (AI), all areas, shown in the above picture, will benefit.

Manufacturing becomes more flexible, medical diagnoses become more reliable, transportation will use the most efficient solution and services are not any more office-hour depending.

Connectivity and Big Data are the enabler to Industry 4.0 an they are already available on an advanced level today. Let us have a deeper insight in the role of big data:

The picture above shows that we have a lot of possibilities to bring the data together, especially if we are using Hadoop. The problem is, to be aware, what impact a data analysis can cause on the data sources and data owners.

What is a data scientist?

What is the character of big data?

How classic data explodes: really big In the picture below you can see the best-known examples

For big data storage, it is preferable to put your data in a data lake.

What does it take, to make a data lake sustainable?

Is it possible to govern such a think? How do people contribute to this in a real way?

Can you think of an example functional healthy Data Lake that last for a while?

Here is an example for an answer:

We must care on data governance principles, if we would gain the biggest advantage out of it.

For data storage is still a big discussion ongoing: Hadoop or no Hadoop

For some corporate internal data there may be a database also a solution. If a lot of data from different sources are necessary, the Hadoop is the by fare cheapest solution.

Industry 4.0 will change a lot of conditions in our daily live. With Industry 4.0 we will get personalized services and personalized products.

Production will become prepared, to produce the personalized products in reasonable time. But also, the connectivity to enable smart grids for energy distribution and storage as well as the possibilities for mobility and smart cities are now prepared.

Industry 4.0 will bring a lot of changes. Here we have the task, to use it in the beneficial way for everyone.

Balance score Card

Like in several articles before already explained, is a company defined by its processes. If we would like to be able to define these processes properly, it is necessary, to have targets defined. Someone could now say: that is easy, a company has always the target, to earn money, that means to achive a resonable EBIT. For a lot of funktions this target is too abstract. Now, it was necessary, to develop a tool that enables to reach the EBIT target.

A tool to do so, is the balanced score card: The Balanced Scorecard (or balance score card) is a strategic performance measurement model which is developed by Robert Kaplan and David Norton. Its objective is to translate an organization’s mission and vision into actual (operational) actions (strategic planning).

These should be clustered in the categories:

1.           Financial

2.           Customer

3.           Internal business processes

4.           Learning and growth

What is a proposed process, to develop this Balanced Score Card? The Balanced Score Card is in some companies called „strategy map “. I like this name, because it shows to everyone in the company:

1.           What is the strategy of the company

2.           What I or my department should do, to support the strategy

3.           Which projects we must put in place, to reach our strategical targets.

The strategy map will be taken most seriously, if it is developer by the whole management team.

What could be a road map to develop the “strategy map”?

1. bring the whole management team together to explain the need of a “strategy map” and ask for their active involvement

2. Explain the development process (be carefull: explain clearly the Need of all steps. It must be avoided that everybody has a final strategy map in mind and the intermediat steps are only taken, because the process is described like that)

3. Give enough room for discussion. This is key to assure that afterwards the commitment of the management team is assured.

Strategy:

Consider the questions below as you formulate your business strategy in preparation for doing a Balanced Scorecard.

Voice of Stakeholder/FINANCIAL (growth, profitability, cash flow, return on investment)
What does our target market want that they are not currently getting?  
What innovative products, features, benefits or services could we add?                                                                                                                                                                   
How do we plan to get more customers?  
How do we plan to sell more to each customer?  
What new market opportunities can we exploit?  
What other strategies would increase growth and profitability?  
Voice of the Customer (high quality, fast or on-time, good value, pleasurable experience)
How can we make better quality products than our competitors?  
How can we deliver faster than the competition?  
What can we do to reduce cost or give more value to customers than our competitors?  
How can we give the customer a more pleasurable buying experience?  
How do we plan to retain customers longer—to create loyal customers?  
What is our Unique Selling Proposition (USP)?  
Internal Processes (effective business systems and operational excellence)
What systems/processes must we excel at?  
What new systems or processes would add value to the market and attract new customers?  
What new system or process would rock our industry?  
What systems would we need to become a “world- class” organization?  
Learning and Growth/Voice of Employee (learning, growth and employee retention)
How do we plan to attract the best employees?               
How do we plan to retain loyal employees?  
How do we provide a great place to work?  
How do we foster individual growth and learning?  
How do we reward or compensate performance?  

 State your specific business strategies within each of the four Balanced Scorecard perspectives.

Financial Strategies (growth, profitability, cash flow, return on investment)
We will . . .
We will . . .
We will . . .
We will . . .
We will . . .
Customer Strategies (high quality, fast or on-time, good value, pleasurable experience)
We will . . .
We will . . .
We will . . .
We will . . .
We will . . .
Internal processes Strategies (effective business systems and operational excellence)
We will . . .
We will . . .
We will . . .
We will . . .
We will . . .
Learning and Growth Strategies (learning, growth and employee retention)
We will . . .
We will . . .
We will . . .
We will . . .
We will . . .

Indicate the “what” and “why,” not the “how.”

Balanced Scorecard

  Below is an example of a Balanced Scorecard developed by an ambitious home builder.

Financial Perspective (How can we increase growth, profitability, cash flow, and return on investment?)

Objectives Measurement Target Action Plan
Increase sales growth Number of new starts per month 10 new starts Expand geographic market/open new office
Improve gross margin Sales minus cost of goods sold/net sales 55% Build homes faster with greater margins
Increase profitability Percent Income from Operations 10% Reduce construction cycle time and costs

Customer Perspective (How can we create product value, market differentiation, “killer customer care,” and raving fans?)

Objectives Measurement Target Action Plan
Customer satisfaction End of job survey/ number of complaints 90% satisfaction/2 complaints per home Create Internet communication system
Create “Dream Home” design packages Percent/frequency package is chosen 80% of houses sold are “Dream” packages Create floor plan and interior/exterior packages
High quality homes Points/quality rating of subcontractors Subcontractor must maintain 90 point avrg. of 100 possible points Create a “quality” score sheet for each sub and provide job feedback
Fast completion of homes Average days to complete 30 days from building permit to close Intense scheduling system/ reduce delay between steps

Internal Processes Perspective (What systems can we create or elevate to achieve operational excellence?)

Objectives Measurement Target Action Plan
Fast start—minimum  time from contract to building permit Days in process Submit app. to city within 5 working days from customer contract Reduce upfront interface and preparation  time with customer
Improve sales lead generation system Number of sales leads 50 leads per month Open another sales office in new region
Effectively schedule sub-contractors Percent of work started at scheduled time 75% of jobs started within 1 day of schedule Purchase BuildStar management software

Learning and Growth Perspective (How can we promote learning, innovation, and the personal growth and retention of valued people?)

Objectives Measurement Target Action Plan
Subcontractor certification Number of subs that are certified 75% of subs are certified Create subcontractor certification program
Improve staff building-process skills Number of skill sets times number of staff 80% completed Create a staff training program

Charts to develop a Balanced Scorecard

Company Name: ________________________________________  Date: _____________

Financial Perspective (How can we increase growth, profitability, cash flow, and return on investment?)

Objectives Measurement Target Action Plan
       
       
       
       
       

Customer Perspective (How can we create product value, market differentiation, “killer customer care,” and raving fans?)

Objectives Measurement Target Action Plan
       
       
       
       
       

Internal Processes Perspective (What systems can we create or elevate to achieve operational excellence?)

Objectives Measurement Target Action Plan
       
       
       
       
       

Learning and Growth Perspective (How can we promote learning, innovation, and the personal growth and retention of valued people?)

Objectives Measurement Target Action Plan
       
       
       
       
       

After putting the strategy statements in the four groups, the critical success factors can be defined.

For the analytic of the balanced score card can be done a wallpaper, which objective is promoting other objectives. At the end, the biggest power should be brought to EBIT improvement or EBIT backup.

At the end the action planes have to be scheduled in a way that the organisation can deal with the actions that the sequence of different actions is senseful and the development of the company is fast enough following market requirements and improvement for the companies position in the market.

Another possibility is, to develop the actions in the sequence shown below. In the discussion with a team, these headlines keep the team better on the discussion about the development of value drivers. This sequence is assuring that not immediately actions will be defined, which have no real connection to the strategical goals.

For example, the following formulations could be found for one strategical goal: Wie would like to have a 20% market share.

Now we must ask: what are the critical success factors? This could be for example in a price sensitive market: we must become cost leader.

Out of this we can easily derive the value drivers, like fix cost, design to cost, ….

To reach the KPIs for the value drivers, we can than define projects, on which different teams of the company can work.  

My experience to work with balanced score cards is extremely good. To work it out and to follow the projects, derived out of the value drivers, is a good method, to form the management team and to make them work on common targets for the company. On disturbances to rich the targets, the whole management team was reacting. In my opinion it is a “must” have for every company.

IT is needed in all our businesses and IT provides additional business opportunities

In this article I would like to develop an overview about the IT technologies, which are available and are on the way to be introduced in our day to day businesses. We will show the necessity and the possibilities to introduce this IT solutions in all businesses and its positive impact. Than we will show, how the businesses will change with this IT technologies and derive out of this the risks, which will rise, for businesses, which deny this implementation of IT technologies

Let us follow the structure in the above shown picture.

First, we should look, if we use the IT elements, which exists already since years, but are further developing, sufficient and adjust our businesses accordingly. Than we should discuss the opportunities, which grow with the new technologies and last but not least, we will discuss, what new business models are possible now. This should make us think about our placement in the business structure and give us the possibilities to decide, if we have to change our business model or if it is still stable.

1. Add-ons to our present business models

Let us go step by step through the structure, given in the picture in the introduction. There is first the discussion about ERP systems. Like the name is saying: Enterprise resource planning system. No enterprise can exist without making a reliable resource planning. No customer order can be confirmed, if I have not checked the availability of the needed resources.

Irrespective of whether the company is a multi-national, multimillion-dollar organization, non-profit, or a small company with single digit million turnover, the goal of system selection is to source a system that can provide functionality for all of the business processes; that will get complete user acceptance; management approval and, most importantly, can provide significant return on investment for the shareholders.

Since the mid-1970s, when there was widespread introduction of computer packages into leading companies to assist in material requirements planning, software companies have striven, and for the most part succeeded, to create packages that assist in all aspects of running a business from manufacturing; supply chain management; human resources; through to financials. This led to the evolution of ERP Systems.

Today you have a big choice of different ERP systems and you can even decide to let them run in a cloud (hosted by a cloud provider), if you use open source software or licensed. With this wide field of opportunities, it is even for small and medium size companies possible, to use a professional ERP system. Especially in B2B businesses and in retail businesses, it is required by the customers, to work with proper ERP. It is affordable now for everybody.

Than we come to social medias. Meanwhile it is absolute necessary for a company, to be present in social networks. I am still struggling, in which networks it is necessary to be present an in which you can allow you, not to be active. Let us go to some statistics:

Working with this statistics, we have also to consider, in which regions we are looking for contacts.

Even if WatsApp has the most user, you will be not very successful, if you do not have WeChat in China.

 

 

 

 

 

 

 

 

 

 

 

 

 

We must be aware, how large the community, using social media already is. To become successful, we can not deny the social medias

A company should at least have a profile in the most important social medias. For some B2B customers it may be not to important for their customers, but is important, to develop its employer branding.

Than let us come to the EDI issue. Keying in data manually is one of the biggest uncertainties in industrial supply chains.

Electronic data interchange (EDI) is the concept of businesses communicating electronically certain information that was traditionally communicated on paper. The two classic examples of such information are purchase orders and invoices. Standards for EDI exist to facilitate parties transacting such instruments without having to make special arrangements.

EDI provides a technical basis for automated commercial “conversations” between two entities, either internal or external. The term EDI encompasses the entire electronic data interchange process, including the transmission, message flow, document format, and software used to interpret the documents. However, EDI standards describe the rigorous format of electronic documents, and the EDI standards were designed by the implementers, initially in the Automotive industry, to be independent of communication and software technologies. EDI can be transmitted using any methodology agreed to by the sender and recipient. This includes a variety of technologies, including modem (asynchronous and synchronous), FTP, e-mail, HTTP, AS1, AS2, AS4 etc. It is important to differentiate between the EDI documents and the methods for transmitting them. When they compared the synchronous protocol 2400 bit/s modems, CLEO devices, and value-added networks used to transmit EDI documents to transmitting via the Internet, some people equated the non-Internet technologies with EDI and predicted erroneously that EDI itself would be replaced along with the non-Internet technologies. These non-internet transmission methods are being replaced by Internet protocols such as FTP, HTTP, telnet, and e-mail, but the EDI documents themselves remain.

As of 2002, Walmart have pushed the AS2 for EDI. [4] Because of its significant presence in the global supply chain, AS2 have become a commonly adopted approach for EDI.

And like EDI is a safe communication tool, so is skype and videoconferencing a meanwhile a standard communication tool. In a global acting world and in global shaped supply chains, it is necessary to have standard IT possibilities to connect and to transfer data to commonly used data rooms.

Skyp, video conferencing and using globally internally and externally changeable data rooms are mandatory for a globally working company. What ever is used, it should be based on a software, in which I can invite practically everybody, who is connected with his computer to the internet.

Due to the worldwide rolled out standards, this demand is easy to fulfil. And it is easy to fulfil for everybody the demand of the above-mentioned solutions, with the offered …aaS (as a Service) solutions. Every company can shape its one IT environment, even if they do not have any IT know-how. You can get IaaS (infrastructure as a service), PaaS (platform as a service) and SaaS (software as a service) solutions. Depending on the economical result you can choose to give everything to extern or to do part of the business within your company. In this respect it is also necessary, to assure a safe data connection from everywhere to your data. This keeps you and your people workable, independent where you are.

And finally, in this area, we should mention platforms, which should be used, to assure to stay with the right contracts in the market. The best examples are the e-buy platforms. On this platform you can place your offers and you can ask for offers from suppliers. In my opinion a “must” to assure competitiveness. And there are much more possibilities, which every company has to check regularly.

Until this point, we have discussed applications only, which should be really standard or at least be analysed by the business management. Depending on the businesses, it is possible, some businesses need less intense application of the one or the other subject. In my opinion it is not possible, to deny this elements without checking the influence of your business.

2. Opportunities, driven by newer technology

In this chapter I have listed technologies and application fields, which can be used already today. It is strongly depending on the business model, which impact these technologies can have.

With our todays capabilities of computer, we have great possibilities to analyse big data volumes in brief time. The big data development has achieved meanwhile a status, which gives the possibilities to analyse big data volumes continuously. Such a continuously monitoring gives a good basis for decision making and risk evaluation.

Big data analysis becomes especially valuable, if a lot of data are available. This becomes better and better, as more sensors we adapt to the internet of things.

How the internet of thing (IoT) works?

If we have in all products the above-mentioned sensors, we are confronted with the question: What to do with this data?

Here are some fields of opportunities, to use this data in daily life and to make life easier

You name it and you will have it in IoT.

And here is now the strategical decision of companies needed: Are existing companies ready to take over the new business models, arising of the table above table or will we have for the application of these services new companies.

However, the decision of the companies, how to place themselves in the market, is now necessary. The train towards the IoT is already on the race and the important places in this train are assigned now.

In the following picture you can see the growth of the word population in the past and with some forecast and you se the development and the forecast for the IoT.

We have already several times more sensors and devises on the IoT than people on earth.

The new businesses will mainly have this development as a basis. We are in the middle of the time to define the business models, using this data source.

All this is accompanied with progresses in artificial intelligence. I am not sure, how much we can already call resent developments: artificial intelligence.

Nevertheless, the progress we can find in these developments are remarkable. This development can make our life much more convenient. We have in this respect also to see the risks, coming up with this development. In the book: Superintelligence, Paths, Danger, Strategy wrote Nick Bostrom (Oxford University 2014) what risks are arising, if the wrong people are first in developing a super intelligence. It is in my opinion a very serious written book, which we should keep in account in further developing superintelligences. But, however we set up the strategy, a lot of developments in that direction are on the way and we have to use them for the services, to utelize the values from the IoT.

IaaS, PaaS and SaaS are already available today. Practically it is already today possible to by services, instead of doing and investing for the own company. This makes it possible that everybody can participate.

Depending on the degree of services, the customer is buying, the direct control of the customer is limited

In the field of the elements, described in chapter 2, the companies must urgendly define their position, now.

3. Development of new business models.

Cloud services, central databases and Blockchain should be our subjects in this chapter. I brought these three subjects in this chapter together, even if this are not modern technologies. To utilize this

technologies on a global scale, we do not have usable policies in place.

Let us start with describing the cloud services:

From these services we can make a SWOT analysis:

The SWOT analysis shows clear the deficits for cloud solutions. In a lot of countries, it is not possible to store bookkeeping data abroad. Even if for some companies the bookkeeping is done abroad, the data storage has to be assured in the country, in which the company has its registration.

At present time, central databases and cloud solutions must exist in parallel. To come to future orientated business models, it is necessary, for the policy makers, to look for more suitable policies.

However, the central database and the cloud have the issue, to become target of cyber-attacks.

Blockchain technology has some key differentiators from databases.

A blockchain is a write-only data structure, where new entries get appended onto the end of the ledger. Every new block gets appended to the block chain by linking to the previous block’s ‘hash’ . There are no administrator permissions within a blockchain that allow editing or deleting of data.

In a relational database, data can be easily modified or deleted. Typically, there are database administrators who may make changes to any part of the data and/or its structure. Additionally, blockchains were designed for decentralized applications, whereas relational databases, in general, were originally designed for centralized applications, where a single entity controls the data.

 

 

 

 

 

 

 

There are some examples, which are advisable to work on with a Blockchain technology:

 

 

 

 

 

 

Out of this we can show, how to decide, which system should be applied.

Looking to the before shown examples, we see, the Blockchain can influence a lot of businesses and will change them drastically. Especially subjects like supply chain management, the standard bank processes and the overview about medical results, are very practical examples to be improvable with the Blockchain technology.

Blockchain needs still the proposal for business opportunities and then the helpful policies from the governments. Due to these difficulties, I put it in the chapter: Development of new business models.

4. Summery

In my opinion, the people, who have knowledge about the technologies are not precise enough mentioning it towards the politic. It is necessary to develop business models in this area, because it will have considerable influence on our societies. The change of a society is always long lasting. For this it is necessary to start in time.

Conveniences prevent necessary social changes and prevent opportunities from being taken

The examples I will provide today are mainly taken from Europe, but they could take place anywhere. I will focus today on a social political discrepancy. We are living in a time full of developments that ultimately impact the structure of our society. To act on the opportunities of some developments, it is necessary to also adapt the social political framework.
I will provide three examples. All of them represent big opportunities for most countries, in my opinion. These opportunities can be taken only if society makes the necessary changes. Thus we come to a weakness of democratic systems, which are already developed over the long term. Societies are not ready to change unless there is pressure on all people or everyone has a deep understanding of the necessity for change. In democratic systems, elections take place every four to five years, and the politicians have only one interest: to keep the lobbyists quiet and maintain the status quo as much as possible, so as not to inconvenience people.
Let me take as the first example the energy transition in Germany. A fast reduction of CO2 is necessary to fight against climate change, and Germany was ahead of all countries in implementing renewable energies. This took place as long as the utility companies were not directly influenced. About two years ago, the utility companies recognized that they cannot hinder a further change toward renewable energies, and their old power plants will become more and more obsolete. Renewable energy sources are already the cheapest forms of energy one can produce. Last year the utility companies divided their business into a renewable part and a conventional part. They are now struggling more and more with the profitability of the conventional energy sources. Environmental activists are requiring a clearer scenario of how to end dependence on coal energy. Last week the German utility companies attended a conference, where the German minister of economy and energy affairs announced:” I will never agree to a scenario to get completely away from coal energy, if no one gives me a solution for the workplaces of the coal mine workers.”
There is a clear urgency to reduce CO2 emissions to keep our climate in balance. The minister also knows this. It is his duty to develop conditions to promote a solution for coal mine workers. It is clear to everyone that this has to be done, but the minister has announced the opposite to assure the coal mine workers not to fear and instruct the utility companies not to start with their change processes.
This is nothing other than purposeful propaganda to survive the next election. This hinders the necessary progress in energy transition. The society has to change to make the necessary changes in our energy system, and the politicians have to provide the framework. The above-mentioned statement of the German minister of economy and energy affairs shows that he is neglecting his duties to ensure that the utility lobby and the coal mine workers will further promote him.
The second example I will mention is TTIP, the free trade agreement between Europe and the US. US President Barack Obama and former EU President Barroso announced the beginning of TTIP negotiations at the G8 summit on June 17, 2013. The first of 11 rounds of negotiations so far was from October 19 to 23, 2015, in Miami. A 12th round of negotiations is scheduled for early 2016. There are a lot of lobbyists fighting to keep their areas protected. TTIP is mandatory, especially for Europe if it wants to strengthen its economic position. Some politicians have discussed that the European Union needs this free trade area, but the voices of the lobbies are louder. TTIP could be a good tool to finally overcome the European financial crisis. But because of political hesitation, this has not taken place.
My third example is the refugee crisis in Europe. After World War II, a lot of refugees came from the eastern part of Germany to the western part. There were skeptics and critics, but the refugees after World War II heavily contributed to what was called the “German economic miracle.” To finalize the economic growth in Germany, companies were asking for Italian, Spanish, Greek and Turkish workers. The additional workforce produced additional GDP and drove growth rates.
Why should this be different with the refugees who are coming now? I agree, there cannot be a never-ending stream of people coming to Germany, but the people who have arrived so far are not killing this country. This takes us back to the idle politicians, who are not actively building up the conditions for integration and who are not intervening early enough in the crisis regions of the world. They are only discussing how to protect the present situation by building up the borders again.
To summarize: Necessary developments that would bring the world to a sustainable future are blocked due to pending political decisions. Politicians are not making these decisions because they are not responding to needs; they are following the interests of lobbyists and trying to prevent societal change. If they did so, they would risk failure in the next election.
One reason for the economic strength of Germany is that Germany cleaned up its social security system. This was done under Chancellor Gerhard Schroeder’s “Agenda 2010.” It brought a lot of changes for society, but it made Germany stronger. After implementing these changes, he was not elected again. For this I very much appreciate him: He did what was necessary, even if it was clear to him that he would jeopardize his next election.
I wish Germany had more of this kind of politician to overcome the present problems. . Politicians must be clear: The problems like climate change, trade limitations and refugees will not disappear, and a late decision is even harder to make. In a mature democracy we need politicians who take responsibility and do not think only of the next election. Otherwise these societies will not change like necessary and the countries becoming weaker and weaker.

Changes of ownership, changes of the management board and generation change in a company

This is not a complete guideline of how to manage changes of company ownership, changes in the management board or generation change. We will discuss how to set up a process, how to manage this situation and which options should be taken into consideration.
The most common change in company ownership is done by selling a company.
What are the main differences in selling a company?
1. The share deal: In this case, the company’s shares or part of the company’s shares are changing ownership. The company continues with its business and its liabilities for its business, as done in the past. These deals are done to clean investor portfolios, to merge companies to get the new company a more complete portfolio or sometimes also to extend market share. In the post-merger phase, very often the management structure will also be adapted. This will normally be done with a post-merger integration (PMI) project.
2. The asset deal: With an asset deal, the company sells its assets or parts of its assets. These deals are often done because the buyer is not ready to take liabilities from the company he or she buys or only a part of a company is sold, which makes it often difficult to share its liabilities. Asset deals provide a lot of possibilities to shape a necessary restructuring process or to enable a good PMI project. The problem with an asset deal is always that the old company, which is now out of assets but still has liabilities, then has to be liquidated or sent to insolvency. A lot of legal requirements have to be considered for such a process.
The possibilities and needs involved in shaping a company sales deal are important. Shaping the deal in a good way opens for the new company the possibility to place itself better in the market or to make its existence further on possible. There are some Founds in the active market that deal only with this kind of company, which they are bringing back in more healthy conditions to the market. This is a hard job, but with the right management team, which can properly handle these kinds of change processes, this business model guides to good profits.
This brings us to the next subject: management change in the board of a company. In the case of company sales, there is normally automatically also a change in the supervisory board. This new supervisory board defines and decides upon a new or changed board of management.
To keep companies healthy, to develop them in a good direction and to assure successor availability, changes in the board of management in a company are necessary and should be planned accordingly. Most of the contracts of management board members are given for a period of three to five years. This assures that the supervisory board has to decide from time to time about every management board member. Let us make a small list of reasons why management board members should be changed from time to time. This list cannot be complete, but it shows the situations that should be taken into consideration:
1. The management team is not playing as a team together. This will provoke a situation in which, for strategic decisions, there is no consensus in the team, and so these decisions can be pushed by the CEO only.
2. There may be performance issues. If a board member cannot deliver the agreed-upon target results or is not capable of bringing a company back to profit after a certain period, he or she has to be changed.
3. After, for example, heavy restructuring phases, a lot of uncomfortable decisions could have to be made, which could make it difficult to work together afterward. In this case, a management change may be necessary.
4. Sometimes it may be necessary to make changes in the management board to bring new ideas in. Especially companies with long-term continued good business have the risk of losing track. Only to emphasize: we are the best! Makes blind for changes in the surrounding.
After these examples of why change is necessary, we should now think about what may be the best source for our candidates. We can get candidates from inside the company or from outside the company. From inside the company it will always be a candidate who will be assigned to the management board for the first time, but the internal candidates have the advantage that they know the conditions within the company quite well.
External candidates can be from the board of another company or can provide special skills, for example, MBA educations, a specialist in some science fields and so on.
The perfect candidate will be someone who is accepted from the supervisory board and the board of management.
The management board is like a good meal: The right mix makes the difference!
Choosing candidates for a board of management, we have to consider their mindset for this task. The board of management, and in the end the chairman of the board or the CEO, is responsible for everything that happens in the company. The board of management has all the power to decide on changes in the company. They must be ready to do so.
Until now, we have discussed only companies, which are composed of shares, and the organs (supervisory board and annual general meeting) of these companies are deciding on data. This becomes somehow more complex when it comes to family-owned companies. It starts already with the problem that the owner often for 20 to 30 years (one generation) stays in charge of all board decisions. The whole company is relying on his or her intelligence, decision-making skills and capability to change. This is a high risk for the development of a company.
My proposal for this kind of company is always to put at least the organs for a limited company in place. Try to define criteria at which a wider circle of people will participate in decision making.
The same is to be taken into consideration for the successor planning. The children of the owners do not always have the best skills to continue the business.
My advice is this: Children of company owners should have at least 10 years’ experience in another company and should have developed in the external company to a management position. If this cannot be fulfilled, the organization of a limited company should come in force.
This article is a reflection of my experience and not a scientific analysis. I would be happy to discuss the aforementioned subjects.

Is it possible to empower the European Union?

This question should be answered in the context of a global world view. The European Union is composed of 28 countries. A trade union connecting these countries defines an internal market in Europe that makes its own conjuncture and allows itself to disconnect for a certain time from global conjuncture.

Nineteen countries of the EU have introduced the euro as their common currency. The introduction of the euro has caused many problems, which will be discussed later in this article. Despite these issues, the euro, along with the U.S. dollar and the renminbi, is currently one of the three most important currencies in the world.

The security that the EU has caused should also not be underestimated. In its history, Europe has never had a period of peace lasting more than 50 years. Today, Europe has had 70 years of peace, and most Europeans cannot imagine any violence between European countries.

Furthermore, the EU promotes democracy. Presently, two Eastern European countries show autocratic tendencies, but there are also reactions that criticize and hinder such tendencies.

Now we come to the question in the headline above: Is it possible to empower the EU? If the answer is yes, it is necessary to explain the obstacles to such empowerment. Those are described below.

1. The economic trade union connects the European countries in one economic bloc. This makes the countries depend on each other. Stronger countries thus claim that they are suffering due to the bad performance of weaker countries. However, these stronger countries forget that one powerful reason for their economic strength is that they are able to do business in a larger economy. The overall economic performance of the EU is not really a disaster. There are some strong-performing countries and some black sheep. The solution lies in finding tools for achieving better balance in this situation.

2. Because EU countries all use the euro, they have an additional interdependency. This interdependency is strong because certain parameters must be kept in place to ensure that the euro thrives. Recall the never ending discussions about Greece. It is important to recognize that the Greek economy accounts for only 2.5 percent of the gross domestic product of the eurozone. This small country did more damage to Europe than it would have if the European countries had been as strong and connected as the states of the U.S.

3. All states of the EU are members of NATO. Thus, these countries are connected in a large society and cooperate to help any member country threatened from the outside. This is surely also a guarantee that the countries will likely not have disputes with one another. Presently, there is a dispute with the new Polish government, but, with luck, the dispute will be resolved soon. A year ago, the Polish government asked for NATO to have a stronger presence due to the violence between Russia and the Ukraine. Now the new government is concentrated only on itselfs and does not consider foreign affairs. This nationalism is disturbing the EU.

4. The EU is promoting democracy. Much needed is a common understanding of law and order and that the rules defined by the EU are necessary. These are preconditions for the functionality of the EU.

Collectively, the aforementioned points raise one issue: The EU works only if common behavior and common rules can be applied in all countries of the EU. How can that be done?

All four points above also have one idea in common: if there were a common approach by all countries to the above mentioned issues, the EU would be much stronger, and questions about its long-term existence would never be raised. Some ideas have been proposed that seem like steps in the right direction. One of these is giving the European Central Bank the task of managing the euro.

For all the above mentioned subjects, member countries must give up some of their sovereignty. At the present time, it seems to have become even more difficult to repair even a few of the design weaknesses of the EU. Some longtime members of the EU are now changing their democratic constitutions and moving toward autocracy or nationalism. Hungary has been moving in this direction for some years, and now Poland, since its last election, is strongly and visibly pushing toward autocracy and nationalism. In France, it was only possible to stop the successes of the nationalistic Front National in the second round.

The different EU countries have very different approaches toward Syrian refugees. Every European country follows its own agenda in this respect. Here, it would be advantageous for the EU to make itself clear. Additionally, journalists should help to inform society and not always to ask: “Will the EU brake on that subject?” This question makes uncertain people even more uncertain.

To assure the long-term existence of the EU, member governments must relinquish some of their sovereignty and establish organizations that will apply common rules to all member states and that will have the power to punish if the rules are not followed.

At the same time, it is necessary to more clearly inform the world of the advantages of the EU. This must be done as soon as possible if Europe intends to play an important role in the world economy over the next few years.

I hope this article opens up a discussion that will develop a road map to improve process, to finally set action in motion and to repair the design mistakes that were made when the EU was established.

Worldwide Megatrends; some of them we cannot avoid. Why we do not promote them?

A mega trend is a collection of trends, patterns of economic, social or environmental activity that will change the way people live and the science and technology products they demand.

I would adhere to a CSIRO Project, issued in 2012, which defines the mega-trend as follow:

The six interrelated mega-trends identified in the report are:

1.   More from less. The earth has limited supplies of natural mineral, energy, water and food resources essential for human survival and maintaining lifestyles.

2.    Going, going … gone? Many of the world’s natural habitats, plant species and animal species are in decline or at risk of extinction.

3.   The silk highway. Coming decades will see the world economy shift from west to east and north to south.

4.   Forever young. The aging population is an asset. Australia and many other countries that make up the Organization for Economic Cooperation and Development (OECD) have an aging population.

5.   Virtually here. This mega trend explores what might happen in a world of increased connectivity where individuals, communities, governments and businesses are immersed into the virtual world to a much greater extent than ever before.

6.   Great expectations. This is a consumer, societal, demographic and cultural mega-trend. It explores the rising demand for experiences over products and the rising importance of social relationships.

The following diagram, also from the CSIRO project, shows the interlinks between the mega trends. It will not be possible, to follow only one of the mega-trends, because it is linked to others. So we should go for the whole system of mega-trends and consider its dependencies.

p1

Let us bring the mega-trends to our subjects in this blog. The mega-trends describe from different angles that we have to deal with limited resources and that we have to go for alternatives and savings of this resources. Further on they show us the clear trend to globalization and connectivity. They show also, that the aging society and the shift of economic strength to newly industrializing countries has to be kept in consideration.

We should understand that the study I took here as an example is only one study of numerous studies. All this studies come to the same result for the mega-trends. There is a different wording from study to study; the contend is always similar. We should appreciate these results and direct our actions accordingly.

What we can derive out of the mega-trends?

1.       We should save resources. This guides us directly to the energy production. Only the sun energy is “unlimited”. We have no right to use other energy sources than sun energy sources. The crude materials are all limited and have to be saved for the following generations.

2.       The connectivity is a precondition to go in the direction of a global world and to more social contacts. The connectivity is also a precondition to deal with all the challenges; we will get with an aging society. We have to develop fast internet connections and services and to use this connection to increase convenience life style possibilities.

3.       The homo economics, who is an egoistic behaving human, has to change to a homo socialist. The social competencies and behaviors will count much more in the future than now. We have to stop the purely egoistic behaviors, which are blocking every change in our world at present time.

Than we get clear options for action to shape our future:

1.       We have to change as fast as possible to sun energies (wind power, photovoltaic, Thermal solar energy, water power).

2.       We have to build on the internet physically and we have to extend possible services.

3.       We should accept that the globalization will bring economically strength to regions, which we receive as poor countries today. To assure, that the developed countries are not losing everything, they have today; we need global connectivity and the possibility to participation on global business for everyone.

4.       To make these changes possible, we have to change the homo economics to home socials. This will become the most difficult task in future.

To summarize, I would say: The mega trends show us the changes we have in front of us. All these changes seem to be blocked today. We will not stop them, because they are derived out of certain logic. We need enough people, ready to put this changes in place, to eliminate the road blockers.

 

To achieve your targets, you have to be convinced that you and your team can achieve them.

The biggest obstacle is overcoming any uncertainty among the management. Only when management truly believes in the team’s ability to achieve its goals can the possibility to achieve them exist. This is especially a problem within bigger companies, where top management sets the targets that need to be achieved. The problem arises when the next level management is not convinced that these top management targets are achievable. If the next level management is not convinced that they can achieve these targets, the targets will not be achieved. What solutions exist to overcome this problem?

1.       We can employ a restructuring consultancy to formulate the necessary action to achieve these targets. Then, the middle management has to apply the action, defined by the consultants.

2.       The middle management can hold a workshop with all next level reports and explain the task. In an open and creative atmosphere, the necessary action may emerge from these workshops. In this situation, it is necessary that the middle management convince the next level management that the achievement of these targets is possible.

3.       The middle management can break up the target set by upper management into smaller targets to be achieved by the next level management and leave it to them to work out the necessary, more manageable actions.

What is the preferred solution? For this problem, I always remember the question: How do you eat an elephant? The answer: Slice by slice. What does this mean? The preferable solution is to break down the targets of the upper management to targets that can be deployed to the next level management. Then, convince your next level management that it is absolutely necessary that these targets be achieved. You first have to convince yourself that they are absolutely necessary, since relaying this message requires authenticity and genuine urgency. If some of your people are not capable of defining and performing the necessary actions, grant them the opportunity to employ the help of consultants. Sometimes, the fresh view of a consultant can help to unveil new solutions.

Of course some tasks should not go to consultants, such as the following: Bring the business back on track.  No consultant can achieve this task, if you, the specialist of the business, cannot show the way. Consultants will always come with their specific toolbox and apply this toolbox to your business. While this can produce helpful ideas, it cannot really shape your business into a new direction. For this task, you are the only person who can do it.

For this kind of task, the biggest help I ever got in my career came from the book: It’s Not Luck by Dr. Eliyahu M. Goldratt. The novel depicts the behavior of a manager – how it should be. A manager has to understand the needs of the business and has to fight for this business in both directions, from upper management to next level management. For this, the manager is in a so-called “sandwich position.” This is a difficult position for middle management, but this it is the role they have to play if the business is to be successful.

So, to sum up: Take on targets, find your position, and fight to achieve the targets with creative ideas and authenticity.

Implementing TPM Improves Nearly all KPIs of a Production

Total productive maintenance (TPM) is a concept that has a huge impact on most of the Key Performance Indicators (KPIs) of a production. These KPIs include:

–          Productivity  (value added per employee, working productivity)

–          Quality       (number of bad parts or number of customer claims)

–          Costs        (maintenance costs, energy costs)

–          Storage      (warehouse frequency, value of the storage)

–          Work safety  (number of accidents, number of missed working days due to accidents)

–          Employee involvement (number of improvement proposals by employees, improvement workshops)

TPM influenced all of these KPIs. The best KPI for checking the efficiency of TPM implementation is the “overall equipment efficiency” (OEE).

The three main categories of equipment-related losses—downtime, speed loss, and defect or quality loss—are also the main ingredients for determining the OEE. Overall equipment effectiveness is calculated by combining three factors that reflect these losses: the availability rate, the performance rate, and the quality rate.

To calculate OEE, we multiply the three factors together:

OEE = Availability Rate x Performance Rate x Quality Rate

 

 

 

 

 

 

 

 

 

 

 

Every responsible person should read about the philosophy of TPM in order to be capable of implementing it. As with most of these kinds of systems, you will be successful with the implementation only if the management understands the concept exactly. The TPM philosophy is based on eight pillars:

  1. Continuous improvements: The target is to achieve zero defects in all production processes.
  2. Autonomous maintenance: Machine workers provide inspections and smaller levels of maintenance by themselves.
  3. Preventive maintenance: Assurance must be given that the machines are always ready for production.
  4. Employee training: The target is to improve employees’ usage and maintenance capabilities.
  5. Equipment monitoring: The startup time for machines will be shortened.
  6. Quality management: excellent quality due to elimination of all bad parts
  7. TPM in administrative areas: Waste is eliminated in non-producing departments.
  8. Work safety and health protection: The target is to have zero accidents in the company.

Founded on these eight pillars, the TPM system is developed.

If a company starts to implement TPM but has no experience with doing so, it should involve an experienced consultant in the beginning. Doing so is very powerful in implementing the TPM philosophy in a company. An old wisdom says: The prophet in his own country is less powerful than fresh blood. However, it is necessary that management together with the consultant pushes the process.

TPM improves much more than simply the equipment availability: If the implementation process is well set up, it will ultimately change company culture.