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The World in 2020

Prof. Dr.-Ing. Klaus Henning

Esther Wingens M.A.

Ingo Leisten M.A.

Moskau, 01. Dezember 2008


The World in 2020

Prof. Dr.-Ing. Klaus Henning

Head of Department of Center for Learning and Knowledge Management (ZLW) and Department for Information Management in Mechanical Engineering (IMA) of RWTH Aachen University

Board member of the Institut für Unternehmenskybernetik e.V. (IfU)

Dean of the faculty of mechanical engineering of RWTH Aachen University

Ingo Leisten M.A.

Research Assistant

ZLW/IMA

Esther Wingens M.A.

Research Assistant

ZLW/IMA and IfU


Aixcore Group

Aachen Consulting and Research

Excellence in...

Knowledge

Management

Information

Management

www.aixcore.com

www.osto.de

Change Consultancy

Facilitating Accompaniment

www.zlw-ima.com

Implementation Realization

Benefits Profitability

www.ifu.rwth-aachen.de


The World in 2020

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


The world in 2008
The World in 2008

…and what will the world be like in 2020?


Economic areas of the future
Economic Areas of the Future

2020

North/South

America

2012

2008

Russia

Europe

Japan

China

India

Source: following Henning et. al (1999); Horizons 2020


tumultuous and complex economic dynamics

demography trap: young people will become scarce, particularly engineers

knowledge as the 4th factor of production – Europe‘s chance

Starting Scenario

accelerated innovation due to global information and communication technologies – the new ‚aeon‘ of the mind

the energy and climate bombs are ticking

innovative fusion of technology will be of increasing importance

sustainability

China and Indiaare growing, Russiawill be strong again

- scenarios 2020

global operating military services


The World in 2020

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


Spaces of Perception

world of increasing turbulences

positive

developments

+

-

negative

capacity to act

space of perception

developments

perceptual capacity

timeline of world history

Source: following Henning et al (1999)


Organization as a machine…

Idea of Man:

„Gear in a gear mechanism“,

People need regulations,

pressure and

control,

primary manpower.

…task specialization,

…work standardization,

…central decisions,

…standardized regulations,

…no task overlapping,

…disjuncture of manual and mental work,

…disjuncture of accomplishment and monitoring,

…environment = „disturbance“.

Company Suggestion

Plan

six sigma

Attitude to work:

Do my job…

…get to the objective and

no further!

ERP,

DIN ISO,

PPS

„connecting

data“


Organization as an Organic System…

Attitude to work:

Advance my

organization

and myself.

…contains people with their life and work processes,

Dynamism

…who has a part autonomous decision making process,

…recognizes and proactively uses the exchange processes of the environment,

…recognizes „organic“ feedback and backlashes and processes them proactively,

…has creative redundancies!

Warning!

„Complexity

trap“!

Idea of Man:

„Micro-

Entrepreneur“!

Doing interesting

work, people are

motivated

intrinsically and

don‘t need

pressure.

Holistic

advancement

& individual

organizations

Trend towards

networking

and matrix

organization

Special role of

communi-

cation


A learning organization…

…learns on 3 x 3 levels.


Organization/Company…

…as a machine

…as an organic system

Example: Knowledge Management

connecting data

connecting people

Example: Management of Processes

guide, norm, standard

agile (vital) processes

Example: Change Management

„throw the lever“ (i.e. SAP-introduction)

culture change

Not „either … or“,not „first this, then that“but

„both … and“,

from the outset!


The World in 2020

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


„All organizations are perfectly designed to get the results they get.“

Source: D. P. Hanna (1988)


dynaxity results they get.“

customer requirements

companies in a company

fractalism

working in teams

flat hierarchies

decentralization

networks

international competition

single

organizations

from a salesman to

a customer market

globalized companies

buy/sell

Between Complexity and Dynamics…

complexity

zone 4

chaotic

zone 3

turbulent

zone 2

dynamic

zone 1

statically

traditional

small businesses

dynamics

low

medium

high


Contentment and success on highly complex problems
Contentment and Success on Highly results they get.“Complex Problems

high

Mission impossible

Kami-kaze

happiness

proceeding

ugly

suicide

low

high

chance of success

Source: following Yourdon (1997)


customer requirements results they get.“

Agility as a Capability…

…of dealing with increasing

complexity.

complexity

zone 4

chaotic

zone 3

turbulent

zone 2

dynamic

zone 1

statically

dynaxity

networks

tools human

documen- current

tation software

internationalcompetition

contract customer

plan changeability

single

organizations

from a salesman to

a customer market

globalized companies

buy/sell

traditional

small businesses

dynamics

low

medium

high


The agile manifest of process design
The Agile Manifest of Process Design results they get.“

Appreciation of values of the Agile Manifest:

  • We consider individuals and interactions to be more important than processes and tools

  • We consider executable processes to be more important than comprehensive documentation.

  • We consider collaboration with our customers to be more important than contract negotiation.

  • We consider the ability to react to changes to be more important than pursuing a plan.

    We therefore attach more importance to the former respectively values, but do not forget the importance of the latter.

The agile manifest spotlights the human being and its interactions – with focus on running processes.

Source: following Das Agile Manifest der Software Entwicklung www.agilemanifesto.org


Twelve agile principles
Twelve Agile Principles results they get.“

  • highest priority = customer requirements

  • changeable requirements – using changes in favor of the competitive advantage of the customers

  • frequent delivery

  • co-operation of customers and manufactures

  • motivation of the personnel and trust

  • direct communication

  • working processes as benchmark

  • endlessly consistent tempo

  • excellent quality

  • simplicity

  • self organizing teams

  • continuous self-reflection

Source: following Das Agile Manifest der Software Entwicklung www.agilemanifesto.org


The World in 2020 results they get.“

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


Mission results they get.“

Purpose

Transformation process

Task/Core process

Group core process

Individual core process

Ultimate

anchor

Input

Cognition feedback (CFB)

OSTO Model

Environment

System border

G

O

A

L

S

Output/

Outcome

Quality feedback (QFB)

Innovation feedback (IFB)

Responsibility feedback (RFB)


Synergy Focusing yes – but how? results they get.“

others (persons or

companies) don‘t know

others (persons or companies) know

Concealing knowledge?

„secret“ personalarea

Sharing knowledge?

„public“

I and my

company know

„unawareness“

I and my

company don‘t

know

„blind spot“

Source: following Luft/Ingham (1955)


Strategy: Sharing Knowledge results they get.“

others (persons or companies) know

others (persons or

companies) don‘t know

I and my

company know

Concealing knowledge?

„secret“ personalarea

Sharing knowledge?

„public“

I and my

company don't

know

„unawareness“

„blind spot“

Source: following Luft/Ingham (1955)


Strategy: Covering Knowledge results they get.“

others (persons or

companies) don‘t know

others (persons or companies) know

I and my

company know

Concealing knowledge?

„secret“ personal area

„public“

I and my

company don't

know

“blind spot“

„unawareness“

Source: following Luft/Ingham (1955)


Our Approach results they get.“

others (persons or companies) know

others (persons or

companies) don‘t know

I and my

company know

How can we

accomplish the

right balance

between the

two areas

„secret“

personal area

“public“

?

I and my

company don't

know

„unawareness“

„blind spot“

business-oriented familiarity


innovation results they get.“

information

+ networking

data

+ semantics

signs

+ syntax

Process of Innovation…

„We are drowning in information, but we starved for knowledge.“

John Naisbitt

competitiveness

competence

+ uniqueness

process-oriented

high portion in implicit

knowledge

acting

+ acting appropriately

ability

+ wanting

knowledge

+ reference to application

high portion in

explicit knowledge

structure-centred

Source: following North (1998)


The World in 2020 results they get.“

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


Germany s greatest strength
Germany‘s greatest Strength results they get.“

What are the main strengths of Germany as a location for investment?

%

Interviewing foreign trader Data in Percent

Source: following Ernst & Young (2007)


German schizophrenia
German Schizophrenia results they get.“

  • Export champion in 2007,

  • low growth, high unemployment,

  • depressed mood,

  • resistance to change,

  • German companies are competitive and growing.


What do the middle class the hidden champions mean to germany
What do the Middle Class/ the results they get.“Hidden Champions mean to Germany?

total 74,6%

  • Owner-managed companies(Hidden Champions) provide approx. 75% of the jobs.

  • Owner-managed companies are the job generator in Germany.

Source: IfM Bonn, Statistisches Bundesamt (2004)


Germanys position as export champion is in danger
Germanys Position as Export Champion results they get.“ is in Danger

Comparison of German and Chinese export

Exports Germany

Exports China

Prognosis of the SIHK/AHK show: China will overtake Germany‘s position

as top exporter for the first time!

Source: DIHK/AHK (Juli 2007)


Germanys strength the hidden champions
Germanys Strength: results they get.“The Hidden Champions

One of the biggest strengths of German companies is largely unknown: The Hidden Champions!

They show how with the aid of people performance and high potential customer benefit worldwide competition can be beaten, and thereby how to experience huge growth.


Brita gmbh
Brita GmbH results they get.“

„Being the No. 1 in the area of water improvement at the point of

receipt."

  • founded in 1966,

  • manufacturer of water filtration products for private and commercial use,

  • has 750 employees,

  • turnover amounts to approx. 190,9 mil. € (2005),

  • world market position 1st.

Source: http://www.brita.net


Enercon grown with the wind
Enercon: Grown with the Wind results they get.“

„Progression through innovation.“

  • founded in 1984,

  • manufacturer of wind energy plants,

  • has more than 10,000 employees,

  • turnover amounts to 2.4 bn. €,

  • number 3 in the world,

  • owns 40% of the patents worldwide,

  • 20% more expensive than other companies.

Source: http://www.enercon.de


Tetra gmbh
Tetra GmbH results they get.“

"Tetra at the forefront underwater."

  • founded in 1949,

  • manufacturer of aquarium, garden pond and vivarium material,

  • has more than 800 employees world wide and more than 410 in Germany,

  • turnover amounts to 200 mil. € each year,

  • world market position 1st.

Source: http://www.tetra.de


Hauni maschinenbau ag
Hauni Maschinenbau AG results they get.“

„Our priority is our customer service based on partnership.“

  • founded in 1946,

  • manufacturer of technologies and solutions for tobacco processing, filter and cigarette production,

  • has more than 3,600 employees,

  • turnover amounts to 629 mil. € (2007),

  • world market position 1st.

Source: http://www.hauni.com


D rr ecoclean
Dürr Ecoclean results they get.“

„We place emphasis on our strength: Innovation and competence, global presence (especially in the growth markets), as well as the experience and the know-how of our circa 6.000 employees.“

  • founded in 1974,

  • manufacturer of high-tech systems for the cleaning of work pieces in the automotive industry,

  • has 6000 employees,

  • turnover amounts to 1,476,6 bn €,

  • world market position 1st.

Source: http://www.durr-ecoclean.com


Haribo gmbh co kg
Haribo GmbH & Co. KG results they get.“

„Haribo signifies a colorful variety of products and an international network of distribution and production.“

  • founded in 1920,

  • manufacturer of sweets,

  • has 6.000 employees,

  • distribution in more than 100 countries,

  • turnover amounts to approx. 1,5 mil. €,

  • market position number 1 in Europe.

Source: http://www.haribo.com


Rosskopf partner
Rosskopf & Partner results they get.“

„From the beginning we focused on the advancement of our profile: the potential and the motivation of our staff.“

  • founded in 1984,

  • manufacturer of solid surface materials and quartz materials,

  • has 120 employees,

  • export quota of turnover amounts to 50%,

  • turnover amounts to approx. 16 mil. €,

  • world market position number 1.

Source: http://www.rosskopf-partner.com


Knorr bremse ag
Knorr Bremse AG results they get.“

„Knorr-Bremse will nevertheless be maintaining its strategy for growth based on better penetration of mature markets, selective expansion of the company's fields of activity, investment in innovations and human resources, and accessing new markets.“

  • founded in 1905,

  • manufacturer of brake systems for rail and commercial vehicles,

  • has 13.035 employees,

  • turnover amounts to 3,1 mil. €,

  • world market position number 1.

Source: http://www.knorr-bremse.com


What puts out the success of knorr bremse
What puts out the success of results they get.“Knorr-Bremse?

Independency

Powerful Organisation

  • autonomous industry concern

  • owner and chairman as one person

  • fast decisions and high flexibility

  • interest of the entrepreneur prior to interest of the stock owners

  • explicit focus on two business areas

  • peripheral organization: management of the regions and local responsibility for products, service, customers

  • leading by explicit target settings (MBO)

  • international leadership team

  • process orientation, „Business Excellence“

Market, Costs and Technological Leadership

Staffs and HR-Strategy

  • high expectations of personnel regarding accomplishment and entrepreneurial mindset

  • target-oriented personnel development (junior executive team, trainee programs, training courses, workshops, ...)

  • „Knorr-Bremse Spirit“: high identification of the employees with the company

  • worldwide market leader, represented in all kind of markets

  • explicit overvalue for customers concerning security, function and LCC by systems integration

  • high R&D-effort to develop innovative systems solutions in the fields of brakes and on-board


The span succeeds
…the span succeeds! results they get.“

O

Organisation

long lasting strategies

-

short-term proceed expectation

increasing dynamics of change

-

insecurity

social stability

-

economic flexibility

target group company

-

target group person

?

?

customer focus

-

innovation

capacity for innovation

-

rising cost pressure

?

?

competition

-

cooperation

work intensification

-

employees reduction

?

?

?

?

?

?

?

?

?

T

Techniques

H

Human


Hidden champions creating the future
Hidden Champions: Creating the Future results they get.“

dimension of life

global networking

T

R

E

N

D

S

2020

process virtualizations

conquest of smallest structures

2012

?

H

?

H

opening of work

limitation of growth

O

?

?

2008

?

?

?

?

?

?

M

T

H


The World in 2020 results they get.“

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


From either or to both and
From „either… or" results they get.“to „both… and"


The three circles of the hidden champions
The three Circles of the Hidden Champions results they get.“

outer circle external chances

tight market focus

inner circle internal skills

powerful leadership

belief in own strength

continued innovation

clear competi-tive advan-tage

global orien- tation

core

ambitious targets

selected and motivated employees

customer proximity

Source: Simon (1996)


Formula for success hidden champions
Formula For Success „Hidden Champions“ results they get.“

  • objective: market leadership – no less!

  • concentration on markets and competences

  • global presence in target markets

  • customer proximity; value based, not price based

  • high innovation in product and process

  • integration of market und technique as motive force

  • local concentration of competitors, competitive advantages in quality and service

  • believe in own strength

  • more work than people, strict selection

  • committed leadership, authoritarian und participative, continuity

Source: following Simon (1996)


Conclusion
Conclusion results they get.“

"Hidden Champions" find their own way.

They differ in nearly everything from other companies and do not follow the ideas of the modern management-gurus.

Perhaps this is the most important lesson…


The World in 2020 results they get.“

  • starting scenario

  • spaces of perception

  • between complexity and dynamics…

  • design processes of innovation

  • …and how companies implement them

  • formula for success: „Hidden Champion“

  • conclusion & recommendations


Conclusion & Recommendation results they get.“

  • Don't reduce complexity – just love it!

  • All organizations are designed to get the results they get.

  • To get better results you need to improve the design of the organization.

  • To get different results you need to change the goals of the organization.

  • If you change the design, be careful not to disturb what's working well.

  • Agility is the way in which to handle increasing complexity.


Conclusion & Recommendation results they get.“

  • Every organization is its own patient.

  • People do not change their behavior quickly.

  • Process before structure.

  • Processes have to be exemplified –

  • instructions alone do not work.


Thank You for Your Attention! results they get.“

Prof. Dr.-Ing. Klaus Henning

0049 171 860 75 75

[email protected]

Ingo Leisten, M.A.

[email protected]

Esther Wingens, M.A.

[email protected]

Aixcore Group

Aachen Consulting and Research

www.aixcore.com

Consultance www.osto.de

Monitoring & Execution www.zlw-ima.com

Economic Efficiencywww.ifu-kybenetik.de


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