11. October 2022

Christoph Keese: Level between daring and security is culture

Christoph Keese: Level between daring and security is culture

Christoph Keese is one of the leading digitalisation experts, a sought-after speaker and one of the co-founders of the Financial Times Deutschland. He was also editor-in-chief of WELT am Sonntag and WELT Online. Christoph Keese recently published his new book „Life Changer – Future made in Germany: How modern inventiveness is changing our lives and saving the planet“ and is a partner and co-CEO of hy. In doing so, he accompanies renowned companies and government institutions on issues of digital transformation and technological innovation.

On 20. October 2022 he is guest keynote speaker at Amagno.Connect and shows in his talk why we need modern inventiveness and a new start-up culture to move Germany forward. In conversation with Amagno’s CEO Jens Büscher, the two talk about their Silicon Valley experiences, the new generation of employees and decision-makers, but also about agile companies and increasing mobility.

Jens Büscher: What I find very exciting is also related to this: traditional companies are dying because they think they are completely unassailable. A few years ago, I gave a series of lectures at smaller events on the topic of disruption. At the beginning, I showed the audience a picture I took at the beginning of my Silicon Valley tour. It showed a shop in San Francisco with modern technologies. In focus: a table on which a soap dispenser and a toilet paper holder stand – and are full of sensors. “The toilet paper holder logs, among other things, how much toilet paper is left on it, when it is empty and when it is used,” I said, turning to my viewers, and continued: “In Silicon Valley, founders are thinking about developing a smart toilet paper roll holder. Just think what projects start-ups in the Bay Area in Shenzhen or Tel Aviv are working on right now, if these companies are already thinking about the toilet roll holder. Don’t you think that at least one of them will be thinking about your business then? They’ve already prepared the business models to destroy their business.” With this I wanted to raise awareness that these companies are not untouchable, but through their arrogance run the risk of being out of the window at some point because they have not created their own competition.

Christoph Keese: Yes, that’s right.

Jens Büscher: The new generation of employees claims a high degree of self-determination, attention and the demand for co-determination. This could be the result of the carefree generation with a modern new upbringing and contrasts with the former top-down hierarchy with clear KPIs. Thus, there is currently a flight of young employees from traditional companies. How can modern and young companies, some with massive staff scaling as start-ups, manage themselves or have themselves managed in a structured way at all, while also meeting the demands of shareholders and investors? Have you been able to discover new leadership methods from visiting the numerous impressive young and older companies? Are there perhaps successful holocracies?

Christoph Keese: Companies that scale quickly in terms of staff numbers are not automatically the most successful. This is now also becoming clear in the market correction. For example, delivery services certainly belong to the strongly scaling companies: Flink, Getir, Gorillas. In the recent past, they have scaled extremely strongly, but they have also got themselves into cultural problems with the scaling. A company cannot double in size and export its culture at the same time, because in order to maintain its own culture, there must always be enough culture bearers to integrate other people – that is like any other social process. The question is how many new people can an organisation culturally integrate per year? Ten per cent? Twenty per cent? That’s already on the edge of being too much. But a doubling or tripling is not possible at all. If you look at the delivery services, for example, they scale above all in their delivery services. That is, where people ride their bicycles alone; and less so in the central offices. Where they scale in the head offices, they have to endure enormous tensions because the people who come into the company do not automatically go along with the culture – perhaps also because it is not one hundred percent clear what the culture actually is. In my current book, the super-fast scalpers appear in a chapter. There, too, my thesis is that after twenty or thirty years of the World Wide Web, in an effort to improve our urban lives, we are gradually reaching the point where we should start addressing the real problems of the world. When we look at Marvel Fusion, this is a manageable company with less than fifty employees and an employee growth rate of perhaps ten to twenty percent per year. At Volocopter and Lilium it’s not much different. If one tries to have new types of electric vertical take-off aircraft certified by the authorities in order – as in the case of Volocopter – to start commercial series operation as early as the 2024 Olympic Games in Paris, there are inevitably relevant certification processes behind it. After all, the aircraft must not crash under any circumstances. This simply cannot be combined with extremely high staff turnover or growth. That’s why “Culture Eats Strategy For Breakfast” applies – and in my observation, companies are particularly successful when they succeed in creating cultural coherence. Every employee who joins is a positive contribution to the company because the culture can change with him or her. Good bosses pick up on this and integrate it. However, this can only happen within certain growth boundaries. If we look at modern space companies like Aerospace or Rocket Factory Augsburg, that is also culture. Finding the right level of daring and safety – that is culture.

Jens Büscher: In this context, the question of leadership and management in companies remains for me. For the previous generation, these issues were very patriarchal and clearly characterised by stringent management and top-down structures in which the opinions of the employees were hardly ever taken into account. What was done was what was dictated from above. Fortunately, we now have employees who feel empowered and whose opinions want to be heard. Of course, this is part of the culture, but they also want to be involved in processes and take responsibility. In your opinion, has the type of leadership or new leadership methods been implemented? Do you see any particularities? There is of course the concept of OKRs, although it only works in part. Have you come across any special forms of companies or organisations in which the new generation of employees can be involved in a good and mature way?

Christoph Keese: I think it is good to first look at where this new kind of leadership actually comes from. According to my personal observation, the smartest comment came from Reed Hastings, who once visited here in Berlin at a World event just over a year ago. The founder and CEO of Netflix said: “Most of you won’t know this, but Netflix is my third company. My first two companies were chip companies.” And indeed, he is a chip engineer. In the chip industry, the motto is “It is all about reducing variance.” So it’s all about reducing variance. To produce a chip, light beams etch nanometre-sized structures onto silicon wafers in a vacuum chamber – the basis for transistors that ultimately form a microchip. Any speck of dust that gets in could disrupt this process and render the chips useless. The failure rate on the wafer is so high that the goal is to minimise it to 0.1 per cent. Because up to that point, you have produced nothing but rejects.

Hastings went on to say that the entire culture of a chip company is about reducing variance and added that the creative economy works the other way around. The creative economy is about increasing variance. Netflix is so successful because it thrives on variance: Bridgerton is something completely different from Squid Game. Starting with the target group to the way it was produced, productions ultimately aim to maximise variance. Hastings predicts that the creative industries will grow to around 5 to 6 per cent of global GDP in the next ten years – instead of stagnating at just one per cent, as has been the case. My personal opinion is that it will probably be more: 10 to 15 per cent; but I would have no evidence for that. This means that the global share of complexity- or variance-reducing industry is changing to a complexity- or variance-maximising industry and is increasing about tenfold. This is also where the trend of agile companies comes from. The variance-reducing industries – such as the automotive industry – are now realising how successful the variance-maximising industries are and that their approach cannot be so wrong. They are therefore beginning to ask themselves what would happen if they were to import agility into their own companies.

Athy For example, we are working intensively with Signal Iduna – an insurance company that can serve as a pioneer in the industry when it comes to the conversion to agile teams. Suddenly, even classic industries – such as insurance companies – are in some way becoming a creative industry with variance maximisation in certain parts of their economic creation. Not in claims processing, of course, because that is where variance is to be reduced – but in other parts.

That is why the cultural technique of maximising variance suddenly permeates the entire economy. For successful implementation, a relevant set of tools will emerge, whose toolbox will become more and more refined. But I think you can only really understand the trend when you see what is actually happening at the macro level: A fundamental shift. We all know the expressions primary, secondary and tertiary Industry. We are currently in the age of services and it could be that a kind of post-tertiary industry will emerge in the near future. Services are and will remain a complexity or variance reducer. I could imagine that after the tertiary industry, a fourth generation of industry will emerge with the creative industry: the Creative Age. It could be that we are just crossing the threshold of that.

Jens Büscher: I agree, and it’s a great segue to the next question. From the numerous demands of the new generation of employees to workation, 4-day weeks, goal-oriented work instead of fixed working hours and much more: these privileges are not available to employees in production. Are we facing a two-class society in manufacturing companies for the first time? In other words, administration vs. production? If so, what possibilities do you see for fairness?

Christoph Keese: I am a member of the BDA Digitalrat, who, among other things, deals intensively with the topic of New Work. We recently had a very exciting discussion on this very topic. The first dividing line that comes to mind and that is traditionally used is Blue-Collar, White-Collar. A colleague pointed out that in the meantime one could speak of operative und nonoperative – and that is more than euphemism. I like the distinction very much because we have two types of production: carbon production and electron production, to break it down. When you manipulate carbon, you’re standing at the workbench welding iron together. When you manipulate electrons, you’re just manipulating information. That is also work. The dividing line operative and nonoperative worker I like it so much because in the end, if you think in a non-discriminatory and technology-open way, it makes no difference whether you manipulate mass or massless particles. But if you manipulate massless particles, i.e. if you do information work, in the end it doesn’t matter where you work. I also think that we agree that the part of the national economy that manipulates massless particles will be much larger in perspective than the part that manipulates mass particles. That is why the basis of the work relationship today is “exchange work for time”. What the employee owes on his side is time. This is a sharing of risk between the employee and the employer, because the employer takes the risk of the time. So I buy an hour from you. Whether you are productive for an hour or not is my risk as the employer.

If we now move into a world where this distribution of risk is changed and the worker no longer sells the hour but the success, the risk moves to the worker. This is not new. We are all familiar with the contract for work and labour and know how freelancers work. Very few freelancers charge by the hour. German white-collar work is defined as “I owe time, not success.” However, there are already huge parts of the economy that owe success instead of time. We will see in the next few years whether the classic white-collar contract migrates in this direction, the rigid boundary is maintained, hybrid models emerge, people have multiple employment relationships or whether the exclusivity agreement gives way to softer forms.

My personal prediction is that the previous form of contract will remain, but will lose its claim to exclusivity. Most employees do not want to take the risk of success on their side. Conversely, most employers don’t want it to move to the employee’s side either, because that’s how they make their money. The employer has the downside of productivity, but also the upside. And this entrepreneurial upside, that you may perform more in an hour than you think you can perform, is something the employer does not want to be taken away in the long run. But what will happen: The first clause that will fall into employment contracts is that you owe the employer your full working hours. We are already seeing that: people want to work two, three, four days. What do they do with the rest of the time? Not just surf and read books. They go after other Zeithussles. Maybe other commercial activities. I think that’s what we’ll see. In the end, there will be a hybrid.

Jens Büscher: Yes, I see that too. But what makes me think about this is the issue of the employee who is classically on the assembly line. I wonder if this type of work is even applicable to this model.

Christoph Keese: No, it’s not. That would be carbon manipulation. We also have to make a basic distinction here. You remember the days when the closing time in Germany was 6:30 pm. The trade unions’ argument was: “We can’t expect our employees to keep the shops open longer because they also need their closing time.” The retailers’ counter-argument was: “There is no contradiction at all. Then we’ll just do two or three shifts.” Today we all know that if the shops are open from 7 a.m. to midnight, the individual employee does not have to work so long, but the shifts are shared.

It will be the same with your example. The factory worker on the assembly line may no longer work five days a week, but only two. The other three days he does something else. It will not be possible to replace his work on the assembly line in the near future. But automation is advancing and more and more robots are moving in. That’s why in the future he might only stand there for two days or even one day. The rest of the time it will be doing something else. That’s why I think we have to take two views – as in the supermarket example: What is the factory like and what is the life of the individual worker like? And: we have to get rid of the equal sign in between.

Eine Fortsetzung des Gesprächs gibt es in der kommenden Woche.

Jana Treptow
Jana loves writing and communication. That's why she is responsible for the editorial contributions and the maintenance of the blog. She is also the contact person for all press issues.

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