Digitization for German SMEs – How To Make Your Own Path a Success

It's no secret that SMEs are the backbone of the German economy. Anabel Ternes von Hattburg, expert for digitalization and Tech-Impact entrepreneur explains in her #F10 guest article what is important for the upcoming transformation 

by Anabel von Ternes | 19 Jan, 2021
Digitization for German SMEs – How To Make Your Own Path a Success

For many, the word digitization has become a byword, the epitome of everything that stresses, costs and brings worry lines to the forehead. Of course, there are also many who see digitization primarily as an opportunity or simply as a relief in their everyday lives. After all, digitization can also bring a lot of convenience.

Thomas C., 54 years old, managing director of a medium-sized metalworking company in the third generation, told me with relief: "It just wasn't fun anymore. Digitization first cost me nerves, then it redeemed me. I already had to move production abroad a few years ago due to price pressure, and the Asian investors then paid me a good price."

What Thomas C. reports is currently being considered by more than a few entrepreneurs. It is a pity when the German economy loses established medium-sized local companies.

Because the fact that the millions of German SMEs are guarantors of sustainable business and social responsibility in Germany, as Mario Ohoven, the president of the German Association of SMEs who died in October 2020, said and it’s absolutely right in my view.

However, this means a major challenge for German SMEs. Particularly in this time of crisis, they must reposition themselves, find their own individual path in digitization and reflect on their own strengths.

Many of these companies have existed for several generations and are not only interested in the company being successful. Here, business and corporate planning are often managed differently than in corporations. Often, these companies act in a more employee-friendly way and are more focused on how to achieve a win-win situation for all stakeholders involved. However, the entrepreneur's focus on the company often means neglecting lobbying.

SMEs should be able to strengthen their lobby in cohesion – in exchange with each other regionally, nationally and Europe-wide. In addition, SMEs should plan and sustainably implement strategies for digitization, in order to make their company fit for the future.

Agility is at the forefront of this – as a principle that should determine HR, organization, processes and strategies. It makes sense, for example, to involve customers directly in development and production processes so that they can contribute their own ideas during the creation of a product and thus see it as their own. It also makes sense to work in a project-oriented manner in changing teams that are put together as needed, to work together without ‘ego orientation’ and to live a New Leadership. In this sense, a manager acts as a coach, advisor and expert who puts themselves at the service of the cause, acts as a role model, also in the use of digital tools, and wants to achieve the best result together.

Above all, the SME is good at this if it focuses on three essential areas: the constant transformation of its business model, the integration of agile elements and structures at the appropriate point and knowledge management from experience and the further development of its employees. Ultimately, for a midmarket company to successfully shape the digital transformation, it is important that it lives according to the following seven points:

  1. Agility
  2. New digital leadership
  3. Lifelong learning / continuing education for all employees
  4. Clear, transparent, strategic communication
  5. Value-oriented corporate culture
  6. Digitization or continuous transformation of all areas that make sense for this purpose
  7. Employee participation through regular surveys, bottom-up participation and involvement of all status groups in strategic decisions.

In addition, there are a number of principles that I believe are important for SMEs, in order to remain strong in the digital transformation: as far as possible, no disruptive changes, taking employees along with you and not expecting too much of them, finding your own paths, living according to your values, focusing on a balance between analog and digital, experience, innovation and plan fulfillment. After all, it is not the quick fixes that shape the future, but the combination of experience and innovation in conjunction with the right employees.



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