Roland Dürre
Thursday May 31st, 2018

Modern Enterprises (Entrepreneur’s Diary #125)

 

This is my attempt at outlining a “modern enterprise”.

 

If you visit Antarctica, you will see the condition of our planet. We badly need change.

Because: The country needs new enterprises.

If we wish to improve our lives, perhaps even if we just want to survive, we will have to drastically change our individual behaviour and the fringe conditions of our society in politics, business, social and cultural areas.

🙁 In this article, I do not wish to write about social and cultural changes. In politics, I find the current tendencies towards demolition of the rule of law rather critical and dangerous. As far as business is concerned, I think we have now reached a perverse state of affairs that is really threatening. This is where we must start the process of change.

We managed to counter the destruction of our own bodies due to hard labour with the use of machines. Since the industrial revolution, we managed to drastically decrease the number of working hours per day.

Now the trend turns. Our growth ideology promotes an exploitation of both ourselves and others for stupid goals. The resulting burden is on our personal and social life (and on our families). By now, the process has reached a grotesque and fear-inspiring level (all-day care for small children, all-day schools for children and adolescents, several parallel jobs for grown-ups, full-time work for men and women, often in combination with hours of commuting that make the work day even longer, normal work on four or five days far away from home).

One would assume that it is the task of the state to change this situation. However, just like the unions, the state will not be able to do anything about it. Change is a task for all people who are concerned with the economy and who are responsible for enterprises – i.e. for many of us.

We must counterbalance the blind dogma of “productivity” with a new efficiency that promotes less waste (#nowaste) and more humanity. We must meet the wishes expressed by especially our young generation that say our work environments need some modification.

People are not here to serve the economy, but the economy is here to serve the people.

In this sense, our country needs new enterprises. There are quite a few communities and people who are concerned with the concept of #NewWork (#newwork) and who also try it out.

As early as in 1984, Wolf (Geldmacher) and yours truly, as the founders of InterFace Connection GmbH, aimed at establishing a really new and different enterprise. Unfortunately, we (and later I alone) only managed to do this during the first few years. Then the enterprise “grew up” and there were problems. Perhaps the time was not ripe, and/or I made too many mistakes.

Today, I at least feel competent to describe what such an enterprise would need to look like. I also know huge and small enterprises that show that modern enterprises, as described below, actually work quite well. This is true both for service providers (health, hotel, IT, mobility, care for the elderly and handicapped,… ) and the producing sector (bicycle technology, clothes, food, shoes, software, sports articles,…).

I would like to remind the reader that the following text describes many patterns that would be “ideal“ if realized. You will not find them too often in their purest form. It is already quite some progress if an enterprise leans towards the proposed direction.

I would also ask the kind reader to keep in mind that the following impulses are not supposed to be a textbook (which, with this topic, would have hundreds of pages). Instead, it is a lose document that wants to inspire a little bit and make you a little thoughtful!


 

Characteristics

Here are the outstanding characteristics of a modern enterprise

  • Common-good economy;
  • Networking idea;
  • Core competence and core business;
  • Customer and product centred;
  • Structure;
  • Processes;
  • Teams;
  • Infra-structure;
  • Requirements;
  • Culture and values;
  • Dynamics.

These are the important issues I would wish to discuss today!


 

Common-Good Economy

As demanded by the Bavarian Constitution, the priority of a modern enterprise must be to contribute towards the ” Gemeinwohl“. In other words, the products and services provided by an enterprise must, first and foremost, serve the people.

You will find something absolutely worth reading with Christian Felber, who is perhaps the most important protagonist of the common-good economy in the German-speaking world.


 

Common Good beats “Shareholder-Value“.

The common good principle limits entrepreneurial diversity and creativity.

Not everything that can be done is desired.

That is the price we have to pay for the common-good economy.

If you follow this principle, it is, for instance, hard to imagine how an enterprise that develops and produces weapons or mines can be common-good oriented. The service provided by private enterprises who “lease armies” or produce such things as “fighting robots“ – which is quite common today – cannot be in accordance with the common-good economy.

Less harmful examples for a clash between the common-good economy and products are the production of tobacco and e-cigarettes, or a farming concept that ruins the basis of its own existence (the soil and the country) in a predictable and sustainable way. I could make a long list of examples for existing misuse.

However, common-good economy not only takes the customers into consideration. It also considers other stakeholders, such as the employees and providers. The exploitation of employees violates the principle just as much as does the extortion of providers.

Also, in a common-good economy, the balance of “extremities” must be given. It contains and enumerates all the damage an enterprise does to its environment during the production process. The waste of water caused by a cheap production or the pollution of living space through wastewater are good examples.

However, damages caused by the products you make are also part of the extremity balance:
Example: If pre-defined threshold values for cars have been confirmed during examination but if they are then ignored and significantly higher when the cars are actually driving (exhaust scandal), then this is not simply fraud, but a huge damage in terms of the extremity balance by those enterprises that produce and are responsible for the cars.

Social damage caused by the enterprises (along with positive effects, if there are any) are also part of the extremity balance.

Examples: Damage done by enterprises if they grant credit to people although they know full well that those people cannot serve them. Manipulating people towards buying nonsense products (so-called marketing), making grown-ups addicts of gambling and children addicts of sweets, and much more of the same kind that happens every day.

Modern enterprises can follow the common-good principle!!!


 

The Idea of Networking

The networking idea means that an enterprise is willing and capable of promoting a special “added value“ to a number of cooperating enterprises, rather than wanting to develop highly complex system all by itself.

Partnership on the market beats dominating the market.

Example: The goal of a modern enterprise should not be to completely develop and produce an electronic car. Instead, it should provide an important part.

In general, you will want to say.
P (partnership) beats S (superiority)!

This is how, probably, dynamic alliances of small enterprises can make “better products“ that might well be complex and satisfy the basic needs of humans. Yet they can at the same time be sustainable and in harmony with the common good. In other words, they need not be detrimental to other people or, as is common today, to all of us.

Without – as is the practice of the huge concerns – manipulating the customers in advance and telling them what they have to need and then selling them those things.


 


Core competence and core business

There is a clear competence based on which a clearly defined service is offered or an actual product is developed or produced. In this business model, we need modern virtues such as self-restriction and the focus on your own strengths.

Example: An enterprise focuses on the development of electric motors (or perhaps even just an important sub-competence like the necessary software) or (rather than and) the efficient production of the entire motors.

Concentration and focussing beat “do-it-all-yourself“.


 

Customer centred and product centred

The customer and the product must be the centre of all entrepreneurial considerations. Consequently, all employees must work together towards one goal.

If you have a service enterprise, the person who receives the service must be the focal point of all creativity.

Examples: In an enterprise that offers home-care, the people you are assisting must get the optimal support and care. In a hospital or hotel, everything must be about the guests getting well soon or feeling absolutely comfortable. An enterprise that, for example, helps a medium-sized enterprise to cope with all the problems that can arise if you use IT, the service must give the customer time for his core business (the round-the-clock-worry-free solution).

Similarly, an enterprise that makes a product must make sure that all employees work towards making the product even more perfect on a permanent basis (functionality) and nicer (design) and easier on the eye (emotion), simpler, more efficient, less costly, etc.

Examples: You want to develop the electric motor for the low-volt sector, the best gear hub for the bicycle, the best e-velo for travelling, the best pair of shoes for making it easier to stand and walk in. Or to produce new e-cars by combining the simplest and best components available on the market.

If ALL employees in an enterprise are enthusiastic about a core competence and willing to work towards it – then true innovation will happen. The positive consequences are that the employees will identify with the enterprise in a healthy way and that being an active part of the enterprise (often simply called work) will give them courage and joy. That is what a modern enterprise needs in order to survive.

And this is how the customers can get so fascinated by a product that they recommend it in such a way that makes marketing (which basically should be banned) and sales promotion (the very word!) obsolete.

A shared enthusiasm for what you offer will move mountains.


 

Structure

I use the word “structure” as in “organizational structure”. I no longer use the word “organization“, because a modern enterprise organizes itself intuitively. They no longer need disciplinary bosses and an organigram that describes the organization.

A modern enterprise has no hierarchy. There are no panels such as directorate or work council. The legally binding positions of the enterprise (director or chairperson) are more representatives than decision makers.

All teams have a maximum size and are self-organized. They are well connected, interact directly and learn from each other. They are also responsible for their communication with stakeholders (customers, suppliers, …).

All decisions are team decisions. The teams are responsible for guaranteeing quality and time of delivery, as well as efficiency and further development.

Depending on the size of the enterprise, there might be a (small) back office. Possibly, some value adding teams are necessary in a direct or indirect way. Persons who mostly achieve the added value indirectly, however, will not give pre-defined requirements. Instead, they will give impulses and inspiration, or, in times of crises or problems, they help with actual moderation or support.

There are no main departments such as strategy, marketing, sales, human resources, product planning. The same is true for entrepreneurial processes and pre-defined methods. Neither are there any central services that get out of control and suddenly set their own standards. Simply because everyone uses their brains and actively participates. And because the services and products have a quality that sells by itself and because the promotion by those who bought it and tell the tale creates more demand than can be met.

Local & flexible beats central & inflexible, iteration beats planning!


 

Processes

I use the word “process” as in “process organization”. As before, I no longer use the term “organization“ because modern enterprises control themselves intuitively.

In a modern enterprise, you have no processes. Something that worked in practice and well-trained behaviour will always dynamically be adapted to change. Rules and regulations are not necessary, because the idea underlying every employee’s activities is their knowledge, their experience and their mental concepts. They all want to achieve the best goal – the best service for the customer or the best product. Social interaction is determined by values, rather than rules.

Common sense and intuition will beat processes and rules!


 

Teams

They realize the achievement of an enterprise, which means they render the service or make the products the enterprise thrives on. All employees in the teams must know and be competent in the core competences of the enterprise.

Example: There was a time when google only employed people who could actually program. That included administrative and managerial jobs.

Besides the explicit added value, all employees and team members also take responsibility for others

and for all the factors that make success possible.

Example: In a software team, everybody can program. Each team member takes responsibility for important fringe issues such as quality control, configuration, delivery on time, customer interaction,… on top of his original duties. This is how all competences and talents can be used for filling different roles that will contribute towards the success of the team either after mutual agreement or without even having had to talk about it.

Depending on the size of the enterprise and the challenges, it is possible that, apart from the teams that directly cause the added value, others will be necessary for the indirect achievement of added value.

Example: There might be service and moderation teams. The moderation teams are made up of particularly experienced employees with moderation competence. They can help if a team has problems or if a team becomes too big and cannot really cope with how to divide itself. However, their support should always be restricted to moderation and perhaps help towards finding solutions.

The teams are the central elements of the enterprise!


 

Infra structure

The entire enterprise is part of one intranet (software system). Said system provides a wiki or social media system. However, I would not call it “knowledge management“ (the term has been used up). Instead, I would call it a common basis of communication.

Example: A system such as Google+ is very mature and offers all you need. If you have a bigger enterprise, you might consider customizing or even develop your own system. If you have a small firm, I would recommend you take one of the many systems available.

All members and teams contribute towards the content.

Example: A team found potential for improvement at the tag and tells other teams about it.

Ideally, the system should be available to all stakeholders (customers, providers, sympathizers and the competition), usually with reading and comment enabled. Because transparent systems are an advantage for all parties concerned.

In addition to the system, you organize meetings (face2face) at regular intervals and with a reasonable format, for instance barcamps. Basically, the internet only makes sense if you also see each other once in a while.

For the infra structure, the following is true: It always has to be a means to an end, rather than its own end. It must be capable of adapting to changed needs quickly and be absolutely simple. So here is what we need:

No more than the amount we really need and as much as necessary!


 

Requirements

From the business point of view:
The only element we know from classic enterprises and that has to remain intact in a “modern enterprise“ is the strict adherence to business control principles. All teams must have positive balance sheets. If a team has problems, it has to either solve them or ask other teams for help. Budget deficits are only tolerated for short time intervals. If they do not disappear quickly, the team will be suspended.

Any surplus will be used for financing the (low) infra-structure costs. A considerable part of the profit

remains with the team, the team members decide the quota and extent to which profit is distributed among the team members. Dependent on the individual situation, a suitable part remains with the enterprise or/and with the shareholders.

Example: If a team has a problem, for instance with coming up with a decision or with dividing itself into smaller parts, they will contact the moderator. That is also true if a team notices that it has technological problems or quality deficits. The team will choose its own moderator.


 

Structure:

The size of a team will be mutually agreed upon. Depending on the task or challenge, I would say a team should be between seven and fifteen employees.

As the situation requires, a moderator should be able to work for between ten and twelve teams. If you have a small enterprise, for instance only one team, then members of the teams will also play the moderator role.

Example: The enterprise Buurtzorg (The Netherlands, Home Care) has 1,000 teams with ten employees in each team (i.e. 10,000 employees), for which fifty moderators are totally adequate. They have many teams that never need a moderator and some teams that often need a moderator.

If you have founders (which, naturally, is only relevant for a young enterprise, since after a few decades the problem solves itself biologically), then they can, of course, be moderators, impulse givers and inspiratory, as well as achievers.

Example: At InterFace Connection GmbH (which was the predecessor of InterFace AG), I did consultant work for other companies and at the same time contributed towards building up CLOU/HIT (”product owner“).


 

Knowledge:

All experience is shared. This should at least happen online and, if we are talking important experience, also in person (peer2peer or in a barcamp).

Example: Best Practice concepts discovered by one team will be published for all teams on a shared website.

Merkantile clarity, the willingness to support each other and the absolute readiness to share all knowledge are indespensable requirements!


 

Values and Culture

Similar to the entrepreneurial culture, values are also best described by stories. It makes sense to remember the culture onion  (Kulturzwiebel).

Example: There are enterprises where the employees share the belief that all they do and all their decisions should be agile, slim, transparent, pragmatic, professional, uncomplicated and similar things. They also believe that listening is just as important as – or maybe even more important than – talking. The values they live are eye-level and respect. Self-organization, self-responsibility, participation and error tolerance are normal behaviour. They all share the basic assumption that all form of indoctrination can be avoided if you use your common sense and emotional intelligence. And, last not least, they all believe that the “heroes” that every social system will inevitably create will turn exceptional employees into models.

In summary, one could say that a modern enterprise is a social system with a respectable goal that masters the art of not producing system agents. Because diversity beats simple-mindedness. Together, the employees know and understand more than the “boss“ alone can ever know or understand.

Thus, “corporate identity” will not be decreed from above, but instead develops mutually, just like the future is also shaped by mutual agreement. This is possible in a modern enterprise. Bureaucratic detours like holacracy, („Holokratie“ – in my opinion, the concept is crazy) must be avoided. Because the cooperation in teams and in an enterprise must not be dominated by bureaucrazy.

In a modern enterprise, it must be clear that there is no control through set goals and that nobody tries to motivate anybody by explicitly holding out a prospect of rewards by granting material favours (extrinsic motivation). Both measures will not work and in the end they will be more detrimental than beneficial.

The employees are motivated because they experience an environment where they can work with courage, joy and confidence in a self-organized and self-responsible way. This is how an intrinsic motivation will grow. And because they know that they can and will be successful together and that, at the end of the day, the success will be shared fairly and in a self-organized way wherever possible.

In former times, I often invoked the term “fear-free zone” as something an enterprise must realize. Today, I have progressed and now I demand a “zone that leaves room for unfolding“.

If you want to have it, you will, first and foremost, need absolute mutual appreciation of everybody’s value. It must be lived and shown by the models. Most likely, something else must be added to this element, for instance maybe that the expectations are not ”too trivial“.

Culture and values are the “operating system” of a modern enterprise.


 

Dynamics

Since the world changes at an enormous pace and is also perceived as more complex than in former times, there must be a high willingness to change in a modern enterprise. The wisdom of an enterprise should ideally consist of the wisdom of the masses. The right questions are asked before you start working on the solutions.

Nothing is as constant as change!


 

Utopia?

Some readers will probably not understand this article and judge it as utopian. Freedom makes them insecure because they know another world and feel comfortable with this other world. They prefer clear statements by third parties, instead of accepting responsibility.

That has also been my experience with some of the people who started out with me. They considered my ideas utopian. Regardless, my experience with self-organisation and self-responsibility were always excellent.

There is another argument that, sadly, I have to accept:
Huge success, exceptional growth and the thus achieved enormous dimensions will corrupt an enterprise and its culture.
It is perhaps some kind of entrepreneurial natural law.

Well, all I can do is provide a nice counter-argument and a solution:

I notice all the time that huge enterprises that had medium-sized beginnings work better than the concerns I know.

And perhaps there is a counter-measure: You could decree that companies that grow too fast have to divide into smaller ones according to their core competences and determined by the teams that were built inside the company?

Today, I know a number of firms that show that it really works and that you can be very, if not fear-inspiringly, successful with utopian ideas. You can really earn a lot of money with this kind of company for your employees and for your enterprise.

Thank you very much for living and having discussions with me.

RMD

P.S.
I often and gladly give presentations on this topic. I always defend my theories. Strangely enough, though, I seldom have to do a lot of defence work to do. Instead, I usually get a lot of consent and support.
🙂 To my surprise (or not), this support often comes from very conservative leadership personalities.

P.S.1
For more articles of my entrepreneurial diary, see: Drehscheibe!

RMD
(Translated by EG)

Roland Dürre
Sunday December 24th, 2017

Here are two short videos on DOAG.tv

Since I am currently often pointing you towards video recordings, here is a short interview with me at DOAG@Talk:

I already told you about this interview on DOAG.tv here (on IF-Blog.de). But so far it had not been linked.

Talking of which: there is another Management interview on DOAG.tv that Dietmar Neugebauer recorded with me. It was about 
“PROFIT, TURNOVER, PROFIT CAN BE MEASURED – BUT THAT IS NOT TRUE FOR IMMATERIAL VALUES“:

Here is the Video.

And there is also an IF-Blog article IF-Blog article.

RMD
(Translated by EG)

Today, you will read a wonderful metaphor for entrepreneurs on:

“How Creative Innovation Can Work“

I heard this story many years ago from Alain Neumann. I will retell it and modify it a little in the process.

You see a happy entrepreneur, because we did it.

Switzerland is famous for its chocolate. When I was a child, I was always craving very ordinary chocolate. My favourite was “full-milk”. But even when I was young, “just chocolate” was no longer a hit. Because the market of the economic miracle country wanted more.

In order to expand, the chocolate industry enterprises had to offer more. For instance chocolate with hazelnuts.

The story I am going to tell plays in Switzerland. A medium-sized enterprise produced chocolate with hazelnuts as their specialty. It was not easy, because the cracking of the nuts was sometimes a problem. More often than not, the nuts would break into many small pieces and, even worse, there would occasionally be splinters of nutshells in the bar of chocolate.

This was not only detrimental for the degree to which eaters enjoyed it, but also less than fortunate for the enterprise, because the nutshell can be rather hard and thus might well damage the occasional tooth when you bite into it. And selling the chocolate with whole hazelnuts was not at all an option, because when you cracked the nuts, they would regularly break into several parts, which made the pickings of whole nuts rather small.

Consequently, they gave a team of engineers the task of having to revolutionize the process of nut cracking. The nuts were to remain totally undamaged. Besides, it had to be avoided at all costs that nutshell splinters ever got into the chocolate. And, of course, the entire process had to be automated and done by unmanned machines.

The engineers worked day and night, but found no solution. It seemed to be a hopeless assignment and the engineers became more and more frustrated with each passing day.

The enterprise also had a porter. He came from what we would today call the “uneducated”, but everybody rather liked him. He felt pity for the engineers who left the building late at night and became more and more frustrated every day.

The porter really felt bad for these engineers. Consequently, he promised to think about the problem and later offer a solution. Of course, the reaction of the engineers was a pitying smile, rather than hope.

One morning, after he had worked the night shift, the porter told the engineers that he had now found the solution. In best Swizz-German (which I cannot pronounce), he said:

“You want to find your way into the nut like a worm and then open it from the inside“.

Initially, when the engineers heard this, they just laughed. But then one of them had the right idea. And then the engineers drilled a small hole into the nut-shell in order to implode the nut from the inside with pressure.

That was the breakthrough!

From then on, the number of split nuts dwindled to practically zero. Since that day, you can buy nut chocolate with whole nuts and with a guarantee that it contains no splinters!

It is quite possible that hazelnuts are still cracked in exactly the same way today. At least, this is how Alain Neumann told it ten years ago. That was the time when Alain was allocated a place of honour in my private collection of people I know in the “Hall of Fame” for great orators. Decades ago, he already made people understand in his unique way what it means to found an enterprise and mange it well. By just giving them enthusiasm and then let them do the job.

Whenever I find creative innovations in my own environment, I add a new story. On the other hand, as of now, I have never found a successful innovation that was created in the laboratory.

RMD
(Translated by EG)

P.S.
For more articles in my entrepreneur’s diary, click here: Drehscheibe!

Roland Dürre
Monday October 2nd, 2017

QUESTIONS (NOT JUST) FOR ENTREPRENEURS

A no more quite “green” but still young entrepreneur in his Unterhaching office (1993 ?).

On June, 7th,
I asked several human and general questions.

And I supplemented them on October, 1st by writing a few theses about what it means to “be human”.

The current social consensus – if such a thing still exists – is something I understand less and less.

Today, let me ask a few questions concerning our “social market economy”. If that is something we here still want at all – because, for a long time, it has now only existed to a limited extent.

The economy is supposed to serve the people. Rather than vice versa. The same must be true for enterprises. They, too, are supposed to serve the people – instead of people serving the enterprise.

The Definition:
An enterprise is a social system that has an economic goal.
The goal of an enterprise is to create products and/or to generate a service. They develop structures and organize themselves. Enterprises have a structure that should actually serve the interest of the people and not work against it.

The Rule:
Common good is more important than profit maximization!
In a social market economy, the enterprises must realize a shared common-good economy. Bowing to the influence of lobbyists in order to increase your own profit is just as forbidden as externality (Externalität – costs being externalized). The principle that profit is privatized but losses are socialized cannot prevail!

And there are more questions:

  • Why are enterprises allowed to offer things that nobody needs? And why can they then artificially create the demand for it?
  • Why do enterprises that produce in the sectors armament and tobacco have the highest margins by far?
  • Why do concerns so often act criminally?
  • Why are criminal enterprises then even subsidized or socially accepted?
  • Why is it permitted that, for enterprises that work in the health sector (medicine, pharmacy,…), the shareholder value is more important than the mandate to make humans more healthy?
  • Why have so many enterprises (social systems with an economic goal) shed their human-based concepts and become systemically independent?
  • Why do we still have disciplinary bosses?
  • Why is work still measured in time units?
  • Why do even high-tech enterprises have punch cards?
  • Why is there no transparency to incomes?
  • Why do we need human source departments?
  • Why do top managers often earn many hundred times more than their employees?
  • Why do you need marketing if you offer high quality products?
  • What is the duty of marketing, other than manipulate people towards consuming?
  • What kinds of enterprises do we have if – with the help of lobbyism – they change the rules to their advantage and thus generate no end of damage to the common good?
  • Why is the “fear to lose your job” (without further consideration) a free ticket if you want to keep useless economic and social structures and if you want to destroy the environment?
  • Why is “change and modification” not at all possible if it threatens economic interests?
  • Why do they always point out how great the economic risks are, but ignore or question  the chances in all the discussions?
  • Why does the interest of the shareholders always have priority over the needs of the other stakeholders (employees, customers, providers, … )?
  • Why do so many people believe that privatization is the magic medicine that solves all problems?
  • Why are communal and/or state-owned enterprises still frowned upon and considered second-class enterprises, although, for example, many local providers show that they actually know what they are doing?
  • What is the practical advantage of “ethical fig leaves” like “CSR“ (Corporate Social Responsibility) or “BGM“ (Betriebsgesundheits-Management)?
  • Why do we not understand that enterprises, as social systems, are closer to being biological units than machines where, by turning the right screws, you can control and increase the turnout and profit to your liking?
  • Why is the consumer in theory the “protected holy cow”, yet in practice he is always more the “disregarded and hunted animal that consumes”?
  • Why is the stakeholder value still the end-all-be-all?
  • Why is everything just about growth and maximization?
  • And many more questions …

Basically, we all know what should happen. Isn’t it terrible that everybody knows it yet nobody is interested? Perhaps because money is the only metric unit that counts and that everybody believes in.

The highest human right in the elderly FRG (Federal Republic of Germany) is no longer the “dignity of man“; it has become “the protection of acquired possession“.

RMD
(Translated by EG)

Roland Dürre
Wednesday September 13th, 2017

Entrepreneur’s Diary #123 – Appraisal Interviews

Evening Event BICCnight “it at media“ in the foyer of the Funkhaus Bayern. München, 22/07/2011 picture by Stephan Goerlich

For today’s entrepreneur’s diary, I chose a very banal topic: The Appraisal Interview.

Together with Wolf Geldmacher, I founded the InterFace Connection GmbH in 1984. Immediately, we had ten successful years as the producers of the software HIT-CLOU and quickly became the leaders on the market for text systems on UNIX in Europe. Because we were a great team. It was a true delight. In retrospective, those were the ten best years of my professional career.

Before we founded InterFace Connection, I had worked for Siemens and Softlab. I wanted to adopt all the things I found good in those enterprises in my own firm. It was quite a number of things. However, there were many more things that did not find my approval and I consequently wanted to handle them differently – those were the more important things.

Among other things, I am talking the chance to decide what tasks were delegated to whom and also of deciding what, when, how and where the work had to be done. At Siemens, the delegation of tasks was “from top to bottom”. That was not what I wanted. And during the first ten years, thanks to a high degree of self-organization and a huge amount of self-responsibility both of the team and the people at InterFace Connection, this worked (very) well.

Both Siemens and Softlab had things I liked. For instance the yearly appraisal interview. It gave you the chance to speak openly with the boss of a hierarchical system at least once every year. I found this a good idea and did the same at the Connection. Regardless of the fact that we always were an enterprise of “open doors” – which means that all employees could come and pour out their sorrows over me and Wolf at any time. Today, I still recommend the “open doors”. However, I no longer recommend the appraisal interviews. The reason is that you do not need them.

At InterFace Connection, this is what happened: after three months (shortly before your probation time ended), there was the first appraisal interview and then, always before a years was over, there was the next. Thus, depending on the time a new person was employed, the interviews took place all the year round. There was also a structure for the interviews. Looking back upon the last year was a considerable part of the interview, then came the exchange of feedback and eventually the negotiations of a new income. I always asked my employees to be well prepared and saw to it that I, too, was always well prepared.

Basically, it went quite well. Except that a few wise-cracks thought it was perhaps unfair. After all, the entrepreneurial context of one month might be totally different from another month. And this could mean that a rise in income based on the current situation might not be fair.

We reacted to this and re-scheduled all (!) the interviews to take place at the end of the year. This had considerable disadvantages and made the topic a sad one. The stress level in November and December climbed another notch. That caused lack of motivation and exhaustion. Nor did the direct comparison make things any easier. At the time, I did not yet understand that there is no such thing as justice (or: there are many definitions of justice).

Perhaps one could construct a “justice based on need”. But justice based on achievement is definitely nonsense.

Today, I believe you cannot set dates for interviews of any sort by following a rule. Let alone if the date is in the far-away future. No, you always have to have an interview close to the occasion, when you have a good reason or at least a current situation that allows or demands it.

Especially communication between humans always has to take place when the necessity arises. For instance, dissatisfaction must never be conserved until the yearly appointment in order to then open the frustration nozzle.

More money agreed upon in ritualized interviews is only the second-best thing. It is better to talk about distributing the success exactly at the time the success happened. And it would be best to let those decide who actually were the ones who made the success possible. At team level.

Wages are a difficult topic. I already wrote about it quite a few times and probably will soon again write about it. Because it is not really goal-oriented that, in Germany, you get more money every year until you are quite old – up to retirement – and, on the other hand, decreasing wages are not really possible during the active time of a work contract. Simply because the achievement curve, even of a programmer, cannot point upward all your life long. But I will write about this at another time.

RMD
(Translated by EG)

P.S.
For more articles of my entrepreneur’s diary, click here: Drehscheibe!


I learned much from Rupert – also how to build syllogisms and vexilla (I took the picture before 2010).

My first introduction to building vexilla was through my teacher and friend Rupert Lay. He closely accompanied my learning and my development for far more than ten years.

Through him, I made the acquaintance of quite a number of the important managers and entrepreneurs who were active in the German economy in the 1970s and 1980s. I also learned to appreciate them and they taught me a lot.

It was also where I learned how many fundamentally important things were achieved in his seminars. In these seminars, you practice the ancient Greek dialectics based on the construction and analysis of syllogisms (Syllogismen) and on the dialectic technology of building vexilla (Fahnenbildung).

In the Projektmagazin – which, incidentally, I find quite a stroke of genius – there is also an article (one of them by Elisabeth Wagner) that is very much worth reading. It describes how, through building vexilla, you can develop ideas and solve problems in a very baffling way and very efficiently.

Basically, building vexilla is just a dialectic philosophical method and has been used in this discipline for thousands of years. As we know, philosophy tries to analyse, understand and give meaning to the world  and the human existence . In a nutshell, I would say it tries to answer the questions: why, for what reason, to what end, how? And that will also help you when you are looking for new ideas and solutions.

The combination of “agile” and “classic dialectics” is a stroke of genius – in almost all cases, it will render excellent results. This is how you can actually achieve “empowering of the people“.

Again and again, that was my experience when moderating start-ups. Especially for an agile team where the individuals work at eye-level, building vexilla is a fantastic tool for gaining new insights in a creative way. Once on a while, you will even mange to get rid of wrong (and often deeply rooted) prejudices.

Here is how you want to proceed in eight steps if you build a vexillum. I like applying them.

  • Formulate the desired theory and define the central terms of the theory.
  • Collect requirements that need to be met at first sight if you want agreement with a certain and exactly defined event or project. You want a list that is as finite as possible.
  • Definition of the terms you used and common agreement.
  • Evaluation of the requirements following the criteria: useful, necessary, sufficient.
  • In case of different opinions with respect to the quality or applicability of requirements, you need to look for alternatives until all the requirements get a consensus. It is permitted to delete requirements that turn out to be unnecessary.
  • Test if all requirements belong to one language game and determine the end function. 
Example for an enterprise: 
regulative – keep the common good out of danger; 
ethically – realize biophily, 
economical – improve the results
  • Test if all the requirements are met or if they can be met with acceptable cost. 
You want to keep in mind that only the actual realization of a project will show if your assumptions have been correct. Consequently, the vexillum can also contain requirements that make a later correction or omission of an earlier decision necessary.
  • In the ideal case, you will find a sufficient requirement as the result of building a vexillum. You will not always manage that. But the sum of necessary requirements that, taken together, will qualify as “sufficient” is also a satisfactory result.

If you wish to try the technology of building vexilla and need assistance, I will gladly help you.

RMD
(Translated by EG)

P.S.
For more articles of my entrepreneur’s diary, click here: Drehscheibe!

AGILE and yet LEAN on the MS EUROPA – a while back.

It is not quite so easy, because there are no patent recipes for founding a company. But there are criteria that can provide orientation. Let me write a few of my ideas, especially on business plans as they are expected by banks and investors, as well as by the competition. Here is what you should keep in mind when writing one.

The text is based on my own experiences, but also on what I learned as a juror at business plan competitions and from the more or less intense dialogue with all kinds of start-ups.

I recommend you proceed in three steps. Many founders use the wrong sequence by, for instance, first wondering what the best legal status of an enterprise might be. However, this will initially play only a minor role. It is more important to get all the necessary invoices written in time.


Necessary requirements for establishing a company are:

  • The team – 
I believe you should be at least two persons and three is probably the best number.
  • The idea – 
well, if you do not have an idea (or even better: several ideas), you can forget about it 
and
  • A great story – 
that supports the entire concept and is allowed to live.
    Part of the story is a (working) title and an (initial) logo of the enterprise that is to be established or the project you want to start. The team and the idea are also parts of the story.

The description of your special expertise and the competence of the partners is also part of the story. The founders need to relate where they are really unbeatable and whom they know around their field of expertise. You definitely should be able to name a few good friends (or acquaintances) that you can name as customers, partners or supporters of some sort or other. If the founders already have a small network that helps them towards reaching their goals, then that is even better.

Thus, the story should shed light on the “yesterday, today, tomorrow” and on the “what, how, why, to what end” in a narrative form.

Basically, you have to use the story to make clear why the entire affair is going to be a success. Only after you can present a nice story does it make sense to start writing the Business Plan. In fact, the business plan will draw from the story. There is no other way to do it successfully.

Here is a list of the usual criteria for a good business plan., along with advice on when which steps should be taken. And why the sequence actually matters.

According to what I recommend, a business plan should be developed in (three) steps. The following points can help founders to better structure their activities. They also help the juror and/or the investor when it comes to understanding the content of the plan and its quality. Which means to better judge the chances of success.

However, these criteria will also help the founder to examine his idea and his plan, looking for weak points quasi as a “self-control mechanism”. It also helps him to realize what special strength his idea or his plan has. More often than not, the founder will only intuitively be aware of them. However, he will have to be able to formulate them!

The procedure I describe is rather advanced and will help you to gain clarity about the business model you describe – and thus to increase the probability that your project will be a success.

However, this does not give a founder free reign such that he can ignore the implementation of his business model in a very “agile”, “slim” and “pragmatic” way and to seek rapid success.

In other words:

Regardless of very intense thinking, the process must be lean for every founding project and trying things out must have a high priority.
So here comes the “business plan” with its three stages:

In its first step, the business plan should contain:

A precise conclusion that clearly states why the business idea is attractive and that outlines its relevant aspects.

A comprehensible description of the expected gain for the customer and how the product/service differs from what the competition offers.

The evaluation of the market and of the competition has to be absolutely consistent in the business plan.

The measures absolutely necessary for successful marketing and sales have to be described in detail. Principles such as

aida = attention, interest, desire, action (marketing) 
or
4 ps = product, price, place, promotion (product offer/service offer)
are helpful.

The expected business structure and the future organisation (structure and processes) must be described in fair detail and must be realistic.
There will always be chances and risks. There must be a thorough judgement and evaluation of both.

Even the first step of such a business plan should look presentable – but it should also transport the competence and enthusiasm of the founders. This document must not be a theoretical work – it should not talk about certainties and not use too many numbers. It should also create room for testing ideas.

If all this has been done successfully, a lot has been achieved.

No earlier than in the second step, you will need the following:

The economical planning and the description of the “operative agenda”. Both will not make sense before the first step has been successfully managed. The same is true for the actual organization, e.g. the structure of the planned enterprise and your idea about how processes in the enterprise should run.

No earlier than in the third step, the following things will be relevant:

After the results of stages one and two are clear, the founders should start thinking about the legal status and the statutes of the enterprise to be founded. Mostly, this is quite trivial and not really all that important from the perspective of a true entrepreneur. However, what becomes rather important now are the actual financial plans, both with respect the question of initial capital and for the actual financing. Basically, they are more like a simulation that answers the question under what conditions/assumptions a successful start will be possible, rather than a “business plan paper”.

Incidentally, the famous “pitch“ will then be nothing other than an extract of “story” and “business plan”. And it should be as short as possible.


I would advise all the founders who already wrote a business plan to look and see if it meets all the above criteria. As I see it, there are many cases where there is huge potential for improvement. And I would recommend that would-be founders either do without a business plan or else use their “common sense”. Or else, if circumstances make it necessary, they might wish to stick to my steps and criteria when writing their document.

RMD
(Translated by EG)

Eugenie Wirz with Christian Mendoza (young entrepreneurs from Poland) at the UTUM-Hackathon (2016)

During my work – or should I say hobby – as a mentor for UTUM (unternehmerTUM) and TUM, I had the privilege to accompany a number of young persons for a time out of their life. I also met many nice people who are very active, both professionally and socially and who promote young persons (some of whom have fallen upon dire times) and start-ups with a huge amount of idealism.

I particularly enjoyed working with Eugenie Wirz (her friends call her Jenna). I first met Jenna several years ago, when she was still in charge of the UTUM mentoring program and worked particularly hard for “her” mentees.

Now, she has a new task at unternehmerTUM in the European context: the program “Erasmus for Young Entrepreneurs“. It brings many ideas and fresh perspectives (Ideen und frische Perspektiven) to the UTUM world. In the magazine TUMcampus 4 | 16, on page 12 , you can find a “special” under the title “Learning from Successful Enterprises“. The Exist-Founders’ Program (Exist-Gründerprogramm) is also among those who promote it.

In the Wirtschaftswoche, you will find an article that describes how “you can learn abroad how to be a founder”. For examples of successful projects, click here.

In my role as the one who accompanied quite a few start-ups, especially with very young founders, I now understand that, more often than not, it is exactly this program that is an important chapter when it comes to writing your own entrepreneurial script. Consequently, it was my pleasure to write this article for Jenna and her program “Erasmus for Young Entrepreneurs”. So if you know young founders, why don’t you give them this information?

And if there are questions about the project, do not hesitate to contact Jenna via email.

RMD

How not to practice innovations management.

It is quite possible that I still believed in institutions and administration when this picture was taken.

Bureaucracy and administration paralyze concerns and medium-sized enterprises. Agility gets lost, Taylorism flourishes. This is how all systems will, sooner or later, make their survival the central goal of their thinking, functioning and behaviour. The interests of the important stake-holders “customer” and “employee” will be suppressed, the enterprise will become inflexible and fragile.

Then the determining factors and environment will change, once in a while even disruptively. The “management” is totally surprised by what happens. A business model that used to be very reliable and beloved is suddenly questioned. There is no better one on the horizon. More and more helplessness grows. Everybody expects a miracle. Innovation and agility are praised as the saviour. Everything must get better.

As a consequence, nothing happens. Except that new programs that follow old patterns are created. The administration gets one or several additional staff departments. They will then be responsible for “change” or innovative management. The new world is now communicated by the central administration with lots of noise. The propaganda machine starts running. On a slide used by the director, you will, for example, see:

„The board identified priority areas to improve in 20xx to become the company we want to be.“

Then comes a list of innovations. As a general rule, you will find CSR (corporate social responsibility) and similar nonsense. Mostly, you also get something about performance or profitability. Once in a while, the customers are also mentioned: you want to become customer centred. Occasionally, they will also sing the praise of “new values” and a different “culture”. But above all, you will always find lots of buzzwords in these works. And that makes you wonder why expensive counsellors get so much money for such weak formulations.

The best case is if things that have been looked down upon for years suddenly become epiphany. I mean terms such as taking responsibility, eye-level, respect and appreciation. Agile and lean, openness and transparency are repeated in mantra fashion. Modern methods and informal communication are propagated. Except that nobody tells you how this is supposed to work. Neither is anybody keen on actually installing these concepts, because the system does not really want any of them. In fact, the system wants to establish and improve its own power. No matter what it costs.

I have come to that stage where I can relate numerous stories about how enterprises have become more and more bureaucratic and administratively complicated. On the other hand, I do not know a single instance where they successfully returned to the simple, agile and open enterprise.

That is the reason why, in social systems – be it enterprises or societies -, I no longer believe in transition or transformation towards less bureaucracy and more life. Basically, it cannot be done from the top, anyway – and they will not allow it from the bottom. Consequently, I will no longer waste my time and energy in old structures. Instead, I will only support concepts where something new is created. Innovation is creative destruction. As in evolution, new things will only happen when an old generation dies out and a new one evolves. That is just how it is.

Please understand my article as an optimistic message. All you have to do is have a little patience, then everything will work out just fine.

RMD
(Translated by EG)

P.S.
For more articles of my entrepreneur’s diary, click here: Drehscheibe!

Roland Dürre
Saturday March 11th, 2017

Kässpatzen, Allgäu, Founders’ Scene and Digitalization.

Night is coming (Founders’ Villa in Kempten).

Yesterday, life again threw me towards the Allgäu. Thanks to Alexa, I was invited to see the “Kempten Founders’ Villa“ (Gründer-Villa Kempten), where I met young activists of all sexes and age groups. I met founders, entrepreneurs, persons looking for their own way in life and “world improvers” I very much liked. The feeling was a little like: “act local, think global“:

It was a beautiful experience that made me optimistic towards the future.

Because on March, 10, they had another one of their monthly meet-ups at the founders’ villa. On those occasions, what they do at the Founders’ Village is “networking”. You also get home-made Kässpatzn – and the invitations were issued by the two initiators and founders of the Founders’ Villa Simon Schnetzer (youth researcher) and Thomas Herzhoff (agency boss). Consequently, the Kässpatzen had been made by the two bosses Simon and Thomas personally in the comfortable Founders’ Villa kitchen.

Simon Schnetzer (right) and Thomas Herzhoff (founder of the Founders’ Villa).

And I can truly confirm: the Kässpatzen were excellent. They were just as tasty as in the “Oberen Mühle“ a little deeper in the Allgäu, in Bad Oberdorf (part of Bad Hindelang). And that is definitely some achievement!

And the many nice discussions were just as good as the food. Among the people were truly great types. They had very diverse interests and exciting dreams for their future.

Besides myself, there was another guest for whom it was also the first time. He introduced himself and his new role and told us that he is now supposed to found the “Kempten Digitalization Centre”. It is an activity sponsored by the Swabian Government in Augsburg and also subsidized by the Free State of Bavaria. The opening ceremony for the “digital office” or whatever is to be established is scheduled for June, 19th. However, he said he does not know if he can actually open on that day. Too many issues are still unclear.

The Kempten Founders’ Village lives.

Well, his words made me smile. So many things happen in the Allgäu. They have innovative enterprises and companies with a world-wide reputation. A founders’ scene starts to come to life.
The people are creative, looking for and finding alternatives and changing the world. They try things and do things. And then the people in Augsburg, the capital of Swabia, sends them a “digitalization centre” that is supposed to teach them digitalization. Probably “Digitalization for the Allgäu” as a gift from the Bavarian State Government.

The very term “digitalization”! From the times when watches and tachometers became digital. Years later, ISDN was introduced. But that, too, was a long time ago and those technologies have been archived in the Deutsches Museum long ago. Digitalization is ancient. Young persons have progressed way beyond that.

And in the Allgäu, the “Founders’ Villa” is a much better metaphor for forming the future than a centre that now wants to start digitalizing the Allgäu.

So let me, again, express my gratitude for the kind invitation to all and in particular to Simon and Thomas for their hospitality in the Kempten Founders’ Villa.

RMD
(Translated by EG)

P.S.
I took the pictures from the Kempten Gründer-Villa Kempten website.

P.S.1
In this article, I tried to describe how activities sponsored by the central administration reach in the “provinces”.