Digitization: How radical do the changes have to be?

Norderstedt, February 22, 2018 – Christian H. Graszt is CIO and responsible for IT strategy and the IT and TK operations at Knüppel Verpackung GmbH & Co. KG. A law graduate, he moderated Lufthansa Industry Solutions’ user roundtable at the Hamburg IT Strategietage on the subject of “Digital Transformation and Corporate Culture: Change or Die?”

We asked Christian Graszt what changes are taking place in companies as a result of digital transformation.

Mr. Graszt, as CIO you have a good insight into the German corporate world. How has the digital transformation changed businesses?

This is not an easy question to answer. At present, I rather have the feeling that only a few companies really have a concrete idea of what “digital transformation” means. Obviously, there are various projects ongoing all over, but a not inconsiderable number of these activities appear to be aimed at digitalizing in a hectic, “somehow” sort of way. Then they pay too little attention to where and how digitalization can truly advance their existing business. We also see the opposite case: where there are groundbreaking new ideas that are not pursued to their logical conclusion because they seem to be disruptive, even though they have an exorbitant potential. So there is plenty of initiative and energy, but not always efficiently implemented.

How radical do the changes have to be?

That depends on the specific case. There are times when digital supplementation is just the ingredient that is lacking to take genuine leaps in development (MP3, GPS, Bluetooth). In other cases, especially when explosive growth is the desired goal, “changes” in the actual sense of the term are not enough. A total rethinking of approaches to product and solutions is required, with all that this may involve. And this sort of “truly disruptive” method corresponds more to a “destroy and create” approach with all its very dire consequences (Uber, Airbnb).

Is it even possible for established companies to keep up with digitalization? Startups are quicker, have no ballast and can courageously take over new fields.

They can, by all means, albeit not without effort and in a different way. Startups emerge rapidly and have no ballast, but they die just as rapidly or enjoy only moderate success. At any rate, only a tiny minority of them are able to write new success stories, like Amazon, Facebook or Uber. Even established companies can act in a similar way, assuming they have the courage. However, this only works if the starting conditions are similar: innovative idea(s), people who can and want to implement them, money to burn and a lack of pressure to show immediate success. Startups are often admired for their lack of ballast and rapid processes, but this can also be expressed in another way: startups begin at a very low level and simply have little or nothing to lose.