Digitalization has its origin in Silicon Valley, more precisely in the local startup culture. But what defines this culture, how does it work, and why is it highly relevant for the German economy as well?
Digitalization, especially in the USA, is characterized by four central themes that were summarized some time ago in the term 'VUCA', but still hold great importance, especially for us:
- Volatility: Everything has become fast-paced or fleeting. What was valid yesterday is already being questioned today. And abolished tomorrow.
- Uncertainty: New ways of thinking create new solutions. However, new solutions also bring new challenges elsewhere.
- Complexity: Not only is the number of media becoming increasingly unmanageable, but technologies, platforms, and methods are also becoming more granular.
- Ambiguity: Rarely is there only one answer or solution to a problem or question. Different approaches, perspectives, and interpretations can be found for everything and anything.
Despite this opaque starting situation, startup companies manage to achieve great economic success and question or even destroy entire industries. They have found an overarching way to address each of these VUCA themes:
'Vision' helps with 'Volatility'
Successful companies from Silicon Valley are built on a strong mission, a clear purpose for the common good. Having a mission that goes beyond product performance makes it much easier for customers and employees to identify with it. By joining a worldview, one feels like they are doing 'the right thing'. Especially younger generations are reached much more easily when they are sold more than just a product. German business leaders historically struggle compared to the Elon Musks, Steve Jobs, or Mark Zuckerbergs of Silicon Valley in this regard.
'Understanding' replaces 'Uncertainty'
In times of uncertainty, the only correct way is to know the people whose situation you want to improve as best as possible. New methods are essential for this. These methods need to be understood and, above all, applied. Startups have a set of practical methods that allow their teams to quickly come up with solutions without significant investments. New products or services are launched, tested, and released based on positive feedback within a few days or weeks. For example, while German automotive providers hold out their hands for every (already outdated at release) map update, Elon Musk automatically and free of charge uploads software for autonomous driving to all Teslas on the roads.
'Clarity' addresses 'Complexity'
One of the main tasks of startups is to collect, analyze, and interpret business-relevant data, often customer-oriented data. The more complex the business world, the more important it is to have a solid decision-making basis. Traditional companies have a lot of catching up to do in this regard. Decisions are mainly made by the management level based on gut feelings. Customers are rarely involved in decision-making processes. With valid data from the digital world, startups minimize risks and assess potentials in a well-founded manner.
'Agility' confronts 'Ambiguity'
When there is no longer clarity, agile approaches are essential. Methods that allow testing multiple paths or solutions almost simultaneously lead to success. It is best to test directly with the customer and their expectations and needs. And not just at the beginning, but iteratively, in every project phase. This naturally requires a changed culture around making mistakes. This poses significant challenges for German companies with traditional hierarchies. If only the boss decides (who, for reasons of self-assertion, cannot afford to make mistakes), the reward for a possible failure is naturally not provided for in the company processes. The ability to admit that hypotheses are wrong is a central factor for successful startups.
Conclusion: It's not the technology that matters, but the empathy for people
The changes brought about by digital transformation do not lie in a changed use of technology per se. Instead, they primarily stem from a change in corporate culture, the use of new methods, and a ruthless focus on people's needs. Only then does the question of technology arise. Or, to quote Steve Jobs: "You have to start with the customer experience and work back toward the technology – not the other way around." Digitalization is a skill that needs to be learned.
For more information about digitalization and
Marko Prislin, please visit:
https://www.excellente-unternehmer.de/redner/marko-prislin.html
