Innovation Management 2020 – Metrics and Success Factors

Join me for my guest lecture on “Innovation Management – Metrics and Success Factors” as part of the Innovation and Entrepreneurship track in the MBA International Business Management and Leadership curriculum at the Hochschule Kempten, University of Applied Sciences, in Germany on June 01, 2019.

Join me for my upcoming guest lecture on “Innovation Management – Metrics and Success Factors” as part of the Innovation and Entrepreneurship track in the MBA International Business Management and Leadership curriculum at the Hochschule Kempten, University of Applied Sciences, in Germany on July 26, 2020.

In this track, we also discuss the teaching case study Boehringer Ingelheim: Leading Innovation (available at Harvard Business Review) featuring Stephan Klaschka’s corporate career as an innovator and intrapreneur at Boehringer Ingelheim.
This case study was written by the Ivey Business School, University of Western Ontario, Canada, and is used for education by universities and colleges across Europe, America, and Asia.

Join me at the Automotive & Mobility Forum, NYC, 24. March 2020

Join me at the Automotive & Mobility Forum, NYC, 24.Mar.2020

Automotive & Mobility Forum
The German-American Chamber of Commerce in New York (GACCNY), invites you to join the Automotive & Mobility Forum on March 24, 2020. An expert panel from the automotive industry will give you insights on major trends that are currently reshaping the automotive industry: electric vehicles, autonomous vehicles, connected vehicles, and mobility as a service.
Based on feedback from past events, GACCNY welcomes back Gary Silberg, Partner & National Automotive Leader at KPMG. In his keynote speech, he will examine the trends stated in his latest publication and report on the increasing importance of semiconductors in the innovation process.
This event sold out in the past, early registration is encouraged. GACC members will get registration priority. Register here.
This event is free for members and $45 for non-members.

Innovation Management – Metrics and Success Factors

Join me for my guest lecture on “Innovation Management – Metrics and Success Factors” as part of the Innovation and Entrepreneurship track in the MBA International Business Management and Leadership curriculum at the Hochschule Kempten, University of Applied Sciences, in Germany on June 01, 2019.

Join me for my upcoming guest lecture on “Innovation Management – Metrics and Success Factors” as part of the Innovation and Entrepreneurship track in the MBA International Business Management and Leadership curriculum at the Hochschule Kempten, University of Applied Sciences, in Germany on June 01, 2019.

In this track, we also discuss the teaching case study Boehringer Ingelheim: Leading Innovation (available at Harvard Business Review) featuring Stephan Klaschka’s corporate career as an innovator and intrapreneur at Boehringer Ingelheim.
This case study was written by the Ivey Business School, University of Western Ontario, Canada, and is used for education by universities and colleges across Europe, America, and Asia.

Intrapreneurship Case Study at the Foreign Trade University (FTU), Vietnam

Students of the Creativity, Innovation and New Value course at Colorado State University discuss the popular teaching case study “Boehringer Ingelheim: Leading Innovation” (available at Harvard Business Review (HBR) and the Ivey Business School) with intrapreneur Stephan Klaschka.

Intrapreneurship Case Study at the Foreign Trade University (FTU), 

As a cooperation between Colorado State University (CSU) and the Foreign Trade University (FTU) in Hanoi, Vietnam, FTU students are tasked to develop an opportunity in a team and conduct a feasibility analysis on the opportunity that they present to the class on June 4, 2018.

I will join the students and visiting CSU professor Robert Mitchell for a live discussion of the teaching case study Boehringer Ingelheim: Leading Innovation, which is available at Harvard Business Review (HBR) and the Ivey Business School,

In this teaching case study, the case writers Professor J. Robert Mitchell, Ph.D., and Ramasastry Chandrasekhar, of Ivey Business School, follow the footsteps of Stephan Klaschka’s intrapreneurial approach to innovation within a global pharmaceutical company (FORTUNE Global 500, Top 20 Pharma).

This intrapreneurship teaching case study is used by staff and students of Intrapreneurship and Innovation in business schools around the world. and features my career as an Intrapreneur at a major pharmaceutical company.

HBR-logoIvey-logo

Discussing HBR Intrapreneuring Case Study “Leading Innovation” at CSU

Students of the Creativity, Innovation and New Value course at Colorado State University discuss the popular teaching case study “Boehringer Ingelheim: Leading Innovation” (available at Harvard Business Review (HBR) and the Ivey Business School) with intrapreneur Stephan Klaschka.

HBR-logo 150x150

On April 26, 2018, students of the Creativity, Innovation and New Value course at Colorado State University discuss the popular teaching case study “Boehringer Ingelheim: Leading Innovation” (available at Harvard Business Review (HBR) and the Ivey Business School) with intrapreneur Stephan Klaschka.


The case writers Professor J. Robert Mitchell, Ph.D., and Ramasastry Ivey-logoChandrasekhar, of Ivey Business School, follow the footsteps of Stephan’s intrapreneurial approach to innovation from within a global pharmaceutical company (FORTUNE Global 500, Top 20 Pharma).  This intrapreneurship teaching case study is used by staff and students of Intrapreneurship and Innovation in business schools around the world.  It is available for download at

Intrapreneurship: Designing sustainable innovation ecosystems! – Executive Webinars in Oct/Nov 2017

Intrapreneurship: Designing sustainable innovation ecosystems! – New Executive Webinar Series in Oct/Nov 2017

Register now for my new Intrapreneurship series of Executive Webinars starting in October 2017 and powered by Ijona Skills:

  1. The Power of Intrapreneurship – an Introduction
    Online only October 18, 2017 – recording available
  2. “Where to start?” – Designing a sustainable innovation ecosystem in a large company for exponential returns
    Online only – October 31, 2017 – coming up
  3. “Against all Odds” – Implementing a sustainable innovation ecosystem in a large company
    Online only – November 15, 2017

The three webinars build upon each other and provided maximum value when attended in this sequence (they are being recorded, so no you can catch up if you missed one)

Join the Circle of Young Intrapreneurs NYC Chapter: Launch Event May 3, 2017

Circle of Young Intrapreneurs NYC Chapter

SIGN UP HERE for free tickets!

A movement designed to inspire, guide, develop & deliver purpose-driven business ideas from young social intrapreneurs inside corporate organizations globally.

We drive positive social change through business by creating a community of changemakers, supporting them with mentoring and advice from leading intrapreneurs, encouraging pan-industry collaboration to solve shared societal challenges and promote advocacy of social intrapreneurship.

Join us and make the business a force for good.

Event: Global Growth – Next Practice Strategies In Customer Experience, Talent & Transformation, Apr.6, NYC

Global CEOs, Top HR and Key Influencers share strategies

Global Growth – Next Practice Strategies In Customer Experience, Talent & Transformation (Event)

Register (at the bottom of the webpage) to join Global CEOs, Top HR and Key Influencers share strategies at the
Cheung Kong Graduate School of Business 601 Lexington Ave. 26th Fl. New York, NY 10022

‘Leading in an Ambiguous World’

How to stay ahead and aligned in today’s fast changing markets, talent compression, regulatory shifts and technology disruptions. A fast paced, highly interactive collaboration among global leaders on emerging trends.

Featured presentations:

  • How to build a Global Customer & Client Centric Organization- the 8 key behavioral and operational dimensions
  • How to create a Culture that supports Innovation and Intrapreneurship
  • 2020 – The Next Practices in Global Talent Development and Mobility
  • Staying ahead of Regulatory Shifts and leveraging Technology for Operational and Market Advantage

 

Visit GACCNY’s Health Tech Insight Panel, Mar.29, NYC

The panel will cover innovations and trends in the health tech space and will feature Alex Fair, CEO of Medstartr, a leading medtech fund, accelerator and crowdfunding platform, Loren Busby, angel investor with Mid Atlantic Bio Angels, and Mette Dyhrberg, Founder of MyMee, a successful big data symptom management startup. It is an event you won’t want to miss!Wednesday, March 29, 2017 from 6:00 PM to 9:00 PM (EDT)

GACCNY’s Health Tech Insight Panel

We are excited to partner on a new collaboration with the German American Chamber of Commerce (GACC): an expert panel event focused on innovations in health-tech.GACC

The panel will cover innovations and trends in the health tech space and will feature Alex Fair, CEO of Medstartr, a leading medtech fund, accelerator and crowdfunding platform, Loren Busby, angel investor with Mid Atlantic Bio Angels, and Mette Dyhrberg, Founder of MyMee, a successful big data symptom management startup. It is an event you won’t want to miss!

Wednesday, March 29, 2017 from 6:00 PM to 9:00 PM (EDT)

REGISTER HERE!

Add to my calendar

Spark Labs (Bryant Park)
25 West 39th St.
14th Floor
New York, NY 10018


Agenda
6:00pm     Registration, Networking & Snacks
6:30pm     Panel Discussion: Life Science
7:45pm     More Networking & Snacks

About VentureOutventureout_logo700x700

VentureOut, the event organizer, is focused on enabling the world’s most promising technology organizations to launch into new markets, raise capital, and scale. Based on the philosophy that talent is evenly distributed but opportunity is not, VentureOut’s mission is to bridge that gap between the entrepreneurial talent around the world and the vast opportunities available to them in New York City & San Francisco. Through short-form strategy development and capital raising programs, VentureOut immerses the world’s most talented entrepreneurs into the US technology ecosystem, fast tracking their growth by establishing relationships with top tech influencers, investors, and new prospective clients. To date, VentureOut has supported the growth of over 500 companies (700+ entrepreneurs) from 20 different countries. VentureOut was founded by Brian Frumberg in 2012. (www.ventureoutny.com)

Apply for ASHOKA Social Intrapreneurship for Innovation in Health and Wellness 2017

Sign up for this unique professional development opportunity, where health and wellness professionals and social innovators from organizations around the world will come together to innovate in this online course.

Four years ago, I helped to launch the “Social Intrapreneurship for Innovation in Health and Wellness” program of ASHOKA in cooperation with Boehringer Ingelheim.  With overwhelming success, the program was repeated every year since 2014 and is being offered again this year from April 24 thru June 2, 2017!

Who should sign up?

Sign up for this unique professional development opportunity, where health and wellness professionals and social innovators from organizations around the world will come together to innovate in this online course.

What is Social Intrapreneuring?

Social Intrapreneurship is a methodology for cultivating and advancing social innovation within institutions by adopting agile, strategies while building essential skills such as leadership, empathy, teamwork and change-making. This 5th edition of the course is sponsored by the Making More Health initiative – creating a healthier world for individuals, families and their communities through social entrepreneurship and intrapreneurial thinking.

Where do I sign up?

Check out the course sign-up page: http://bit.ly/socintspring2017
Space is limited and based on a first-come, first-served basis. Participants will also be vetted based on criteria and fit for the course. We strongly encourage Boehringer Ingelheim employees, as well as health and wellness social entrepreneurs and professionals to apply.

Course Details
Application Opens: NOW
Application Deadline: April 13th
Course start date: April 24th
Course end date: June 2nd

Expected Time Commitment: 2-3 hr/week time-flexible, self-paced and interactive.

Questions?

If you have any questions about the course, please feel free to email the organizaers at courses@ashoka.org

Meet me at 2017 ISPIM Innovation Forum XXVII- Fostering Innovation Ecosystems

Join my session on “Building a Sustainable Innovation Ecosystem in a Global Corporation” in the Innovation Culture & Ecosystems track on March 21.

Meet me at the International Society for Professional Innovation Management (ISPIM) Conference 2017 ISPIM Innovation Forum XXVII- Fostering Innovation Ecosystems in Toronto, Canada on March 19-22, 2017!

Join my session on “Building a Sustainable Innovation Ecosystem in a Global Corporation” in the Innovation Culture & Ecosystems track on March 21.

Blog ISPIM Toronto event picture

 

What my session is about?

Large pharmaceutical (and other) organizations struggle with the tectonic shifts and fundamental changes across the landscapes worldwide. The traditional mindset and business models are failing. A rejuvenating and holistic transformation effort is needed to get nimble again and adapt to the new reality.
How do you change a stagnant innovation culture and create a sustainable ecosystem within a global organization that stands the challenges of real life?
As an example, this case study discusses the comprehensive yet practical approach that mobilized hidden talent and resources transforming Boehringer Ingelheim, a Global FORTUNE 500 pharmaceutical company, from within on a global scale. It generated exponential returns and fundamentally changed the culture of the organization from leadership training and managerial decision-making down to bringing grass-root ideas to a break-through and new career paths for employees.

What is the Problem?

The issue is universal and not limited to a pharmaceutical or healthcare company: There is no lack of great ideas aiming beyond incremental improvement at the grassroots of large organizations. There is also no lack of funds or support for break-through ideas on the top of the hierarchy; in fact, leadership is constantly seeking for good ideas. However, there are many obstacles bringing them together.
One problem is how to connect the people with great, disruptive ideas with the ones that have the authority and resources to making them happen in the organization?
A second problem is how to find and vet the ideas that have a game-changing potential and develop them with limited risk?
The third problem is that even with executive support it can be hard to implement a new idea against the resistance of the organization, which rejects them as disrupting the equilibrium of the status quo.
The proposed session illustrates and discusses the real-life experiences of building and operating a holistic and sustainable framework that successfully addressed the issue, overcame resistance on many levels, and yielded an exponential return-of-investment. It resulted in a visible and measurable way changed innovation mindset and changed behaviors throughout the organization to bring disruptive ideas and projects to life.

Where do I find more Information on the Topic?

Visit my blog OrgChanger.com to read more about intrapreneuring with case studies and real-life success stories!

Rethink Healthcare – Workshop – Berlin, Germany – April 11, 2017 #rethinkhealthcare17

Sign up for RETH!NK HEALTHCARE! – Big Data, Augmented Reality, Wearables
and visit my workshop “Digitale Disruption im Gesundheitssystem: Was sind die Risiken und Chancen für Pharmaunternehmen?” in the heart of Berlin, Germany, on April 11, 2017! – Follow the event on Twitter #rethinkhealthcare17

speaker

 

How to become a “Partner of Choice”? (Article)

Expert advice on open innovation from executives with experience at Bayer, Lilly and Boehringer Ingelheim published in the December/January 2017 issue of the Healthcare Sales & Marketing Magazine (HS&M) e-magazine:

How to become a Partner of Choice (.pdf)

Join Executive Round Table event: “The innovation and technology convergence in Life Science and Healthcare industry”

With improved technology, especially, Artificial Intelligence, what physicians will be needed in the future?
Join the Executive Round Table event on Nov. 22, 2016 featuring “The innovation and technology convergence in Life Science and Healthcare industry”

Life Science Quest and the Sino-American Pharmaceutical Professionals Association, Connecticut (SAPA-CT) work together bringing a series of high-level professional and business development events to Life Science and Health Care industry in the TriState Metropolitan area, providing high level business networking, round tables discussions and business seminars. 

This joint event of Life Science Quest and SAPA-CT in the Life Science & Healthcare series is to be held 22 November 2016 6:00 PM at Mount Saint Mary College  (330 Powell Avenue, Newburgh, NY. Aquinas Hall room 163).

Eyeforpharma on Open Innovation – How to become a ‘Partner of Choice’?

The Art of Innovation: How to Become a “Partner of Choice” is an insightful interview with seasoned innovation professionals discussing what it takes to build a Partner-of Choice-relationship with Open Innovation in the pharmaceutical industry.

The Art of Innovation: How to Become a “Partner of Choice” is an insightful interview with seasoned innovation professionals discussing what it takes to build a Partner-of Choice-relationship with Open Innovation in the pharmaceutical industry.

No need for doctors in the future?

Technological advances like Star Trek’s “Tricorder” affect healthcare faster and deeper than we seem to be aware of. It poses the legitimate (and serious) question whether we will need physicians anymore in the future!

This post is inspired by recent events, when I was approached to moderate a controversial discussion with an expert panel at an international health innovation event in Europe.  The topic featured:  “Disruptive Innovation in Medicine:  Will physicians soon be obsolete?”

Science Fiction – for real?

50 years ago the original TV series “Star Trek” introduced a most fascinating and visionary healthcare device, the ‘Tricorder.’  Remember how Doctor McCoy (and his successors in more recent Start Trek versions) perform comprehensive medical examinations by simply moving the device over the patient’s body to diagnose their condition?

This technology is now becoming reality, user test are scheduled to start in September 2016. – The question is, how will it influence the medical profession?  Will we need physicians in the future and if so, will their work be different for what they do today?

Stuck in today’s medical factory model

Let’s take a quick step back to look at why the Tricorder changes the paradigm of the past centuries as well as our current healthcare system, where the physician plays a key role to diagnose and treat our illnesses.

The internet led to a decline of our reliance on the medical experts around us (at least for the bulk of non-emergency care).  Patients and caregivers discovered the abundance of online content to gain broader and deeper insights into health topics, to find up-to-date research information or to explore new treatment options.  Global online communities of patients and caregivers form around numerous illnesses to share and exchange information and individual experiences across disciplines and borders.

Nowadays patients often enter a doctor’s office armed with research results and specific therapy options as well as a keen awareness of their own economic power pushing the physician towards delivering on the patient’s specific requests.  From a patient’s perspective, in many cases, the physician degraded from a consulting health professional to a dispenser for prescriptions.

The physician on the other hand is limited by what diagnosis and treatment options the payers allow, i.e. are willing to pay for, and remains trapped spending much time to navigate a bureaucracy established by the various insurers and payers.  Not being able to focus on practicing medicine but distracted by administration is frustrating also for physicians, who have stepped up to improve the patients’ health to the best of their abilities.

Frustration with today’s health factory model (image: whatsnext.nuance.com)

 

It does not surprise that a typical medical practice -from a patient’s perspective- looks like a factory: the patients get lined-up while the doctor hops from one to another in an efficient flow spending minimum time on each individual.

Overall, we already know our healthcare system being not overly efficient and way too expensive.  From a patient’s perspective, it’s focus feels far off their individual health and care.

Beyond the limits of human capability

Even the best trained physician remains a human being with biases and limitation just as everyone else.  We can also not realistically expect a physician to keep up with the 5,000 latest research articles on heart disease alone, to digest and interpret them as well as translating them swiftly into their medical practice.

At the same time, computers with artificial intelligence (AI) and deep learning algorithms are already becoming capable of providing better and more treatment options with fewer errors with quick access to the internet’s vast sources of medical data and the most recent healthcare information for all kinds of user groups.

The picture is not much different for the “self-informed patient.”  It is in the nature of the (online) beast that some information sources are more credible than others, which induces significant risk for layman consumers of this information.  Incomplete, cherry-picked and at times questionable, outright wrong or inapplicable medical information in untrained hands can do more ill than good for the patient.

It’s a race that humans cannot win anymore, neither patients nor doctors.

The next step: Fiction becoming reality

The Tricorder can be seen as a way as the next evolution of automation – scary as it might sound initially, freeing up the physician and medical staff for other tasks may not be a bad thing.

It is a big step towards ‘automating healthcare’ by building an affordable and mobile diagnostic device that can reliably detect the presence or absence of an array of common illnesses better than an individual physician.  This is what the ongoing Qualcomm ‘Tricorder’ X-Prize challenge is about.

What the final design will look like, we will see.  Here is a glimpse by two of the seven finalist teams.

Images: Scanadu (left), Dexter/Final Frontier (right)

It awards $10,000,000 for a mobile device that cover vital signs, consumer experience, and diagnostics across a set of 12 distinct diseases as well as their absence.  In fact, the winning device needs to cover indications from a variety of medical fields (see below table, source: X-Prize) with its results beating ten board-certified physicians.

Tricorder X-Prize requirements

The winner(s) are to be announced in just a few months out.  To my surprise, this groundbreaking innovation challenge goes widely unnoticed – at least in Europe, from my recent observation.

A new side of healthcare

The Tricorder will only be the first version of a new class of healthcare technology.  The first Tricorders may become available at the entrance to hospitals, medical practices, workplaces or in public health kiosks already in place at Walgreen, CVS and there alike over the coming years.  They may pop up everywhere you hang out and have a few minutes to spare.  Perhaps, you will have to undergo a quick screen of your health status to ensure the absence of contagious diseases before entering areas with many or vulnerable people such as nurseries, retirement homes or entertainment events.

Imagine how fast the second and third version will aim high with added features, miniaturization, better portability, user convenience, lowering cost, and so on.  Order your own Tricorder via Amazon or pick it up at BestBuy or the Apple store.  Some of its functionality may become available part of your next ever-smarter smartphone, smartwatch or other wearable device.

As a bottom-line, you will no longer need to see your doctor for a diagnosis.  You may even collect relevant vital signs or perform a laboratory test on your own device anytime and anywhere.

Medical doctors –  a dying profession?

With technology delivering affordable quality results, the key question remains: what happens to the physicians and their staff if key responsibilities such as a reliable diagnosis and selecting the most promising treatment may no longer be in their job description?

It seems obvious that most of what doctors and their administrative helpers do today may not be needed in the future.  We already see trends emerging that drive radiologists, for example, out of their diagnostics business:

  • Cancer Research UK crowd-sourced identifying cancer by asking citizens to participate and commissioning a Genes in Space game for mobile devices designed to actually map patterns that help scientists spot DNA faults.

 

  • In recent competitions artificial intelligence (AI) systems get “strikingly close” to humans in detecting breast cancer, for example.

Where did the medical doctors go?

Technology will take over triage, diagnosis and decision-making regarding treatment options.  Much of the administrative staff becomes obsolete.  Fewer doctors will be needed.  Their focus shifts to delivering the much-needed empathetic human care – and this may not be a bad thing, since this critical field of care seemed to have lost its place in the medical practices today.

It will open a new competition with nurses who already occupy much of this care space today and at a more affordable cost.  Where exactly the line will be drawn time will tell.

 My question to you

– How do you envision the future of medical professionals to change?
Please share your thoughts!

(image: pinterest.com)

Join me at Singularity University’s first Germany Summit, Berlin, 20-21.Apr.16

Join me at Singularity University’s first Germany Summit, Berlin, 20-21.Apr.16

On April 20-21, 2016, Singularity University, the most innovative and forward-looking institution, has chosen to host their SingularityU Germany Summit in Berlin—one of the most vibrant cities in the world. SingularityU Germany Summit is a local Chapter and community organization of Singularity University. It is one of the largest two-day events in Europe aimed at bringing awareness about exponential technologies and their impact on business and policy to thought leaders and executives from breakthrough companies.

What can you expect at SingularityU Germany Summit?

Leading experts from the global high-tech community will present the latest trends and cutting-edge developments in Mobility, Organization, Manufacturing, Artificial Intelligence, Computing, Robotics, 3D Printing, Machine Learning and Design Thinking. Together we strive to inspire and empower European leaders and influencers in using exponential technologies to solve today’s most pressing issues. SingularityU Germany Summit is an ideal platform to network for both alumni as well as first time attendees, leaders, government representatives, entrepreneurs, investors, NGOs.

500 attendees ranging from CEOs to young innovators from across the globe are expected to attend the event. Together we will explore issues such as: How can technological evolution be transformed into a sustainable and value-based growth for any industry? What ethical standards and responsibilities do global leaders have to account for?

 

 

 

 

Digital Transformation at ‘Life-Science meets Telco7’ on April 14, 2016

Meet me in Bonn, Germany on April 14, 2016 for the 7th installation of DeTeCon’s Life-Science meets Telco series.

This year‘s event focuses on a very special aspect of the Digital Transformation – the cross-industry collaboration and exchange.

How can digitalization be implemented to make a difference in every patient’s life? What best practices from other industries can be transferred to the pharmaceutical and healthcare industries? These and many more questions we will answer at this year’s event.

You can expect a great atmosphere for networking as well as exciting discussions on:

  • What is the role of the Digital Transformation for Pharma?
  • Importance of the collaboration between Life Sciences & ICT: current changes in ICT.

Don’t miss this opportunity! Save the date and stay tuned for more information!

 

German Innovation Insider: Catch-Up in Mobility Arena

After exploring German innovation barriers to digital transformation. As a follow-up, let’s look at an example of a successful industry already known for high-tech. And which example would be more moving than the iconic German automotive industry?

Automotive, a moving example

We explored German innovation barriers to digital transformation in German Innovation Insider: The Brakes on Digital Innovation previously.  As a follow-up, let’s look at an example of a successful industry already known for German high-tech innovation: the iconic German automotive industry.

Automotive is the largest industrial sector in Germany.  Vehicles and parts make up some 20% of total German industry revenue with auto sales and exports worth 368 billion euros ($411 billion) in 2014.  Car-making is a German strong suit with luxury cars being the most profitable segment.

Electric Vehicles? – “Nein, Danke!”

Disruptive players emerged with electric car concepts for years. They were generally ignored by the established car makers despite the high eco-consciousness of German society in general.  The new technology was not considered a threat nor as profitable as the existing businesses.  So electrical vehicles were disregarded so not to disrupt or cannibalize the traditional business with combustion engine vehicles.

The influence of the car industry remains strong and has an outspoken lobby also in Germany.  This contributes to failing the German government’s announced goal of leading the electric mobility market with “one million electric vehicles on the road by 2020” since only 8,522 new electrical vehicles were registered in German in 2014 (up from under 3,000 in 2012).

2015Q1 ihs-automotive-electric-vehicles-ranked-by-country(businessinsider_com)
Germany ranks 6th in electric vehicle (EV) registrations by country in Q1/2015. EV registrations in percent of all vehicle registrations displayed.  (image: countrybusinessinsider.com)

Innovation Catch-up by the Automotive Industry

The game changed when disruptive niche player Tesla Motors started cutting into the highly profitable luxury car segment with its high-end and high-tech electric vehicles.  Tesla also receives outstanding customer service reviews in key markets such as the United States.  Suddenly German car builders scramble to catch up to protect their stakes: everyone wants to offer at least one electric vehicle in their luxury car portfolio as a ‘Tesla Killer.’ Finally, negligent or halfhearted governmental support of the program just changed course by offering temporary tax breaks and other incentives.

Growing out of the Niche

Now, disruptive innovation may not make cars obsolete.  We still want to get from A to B, so incrementally improved cars (better safety, quality components, etc.) will remain in demand and customers will continue to pay a premium for luxury models. Take a closer look at Tesla though to see the difference of their bigger and bolder view: the Model S versions, for example, are constructed all the same except for the model sticker on the back.

The true battlefield is no longer the physical car alone.  From the steering unit to the breaking-system Tesla’s are built from pre-assembled, tried-and-tested components from quality manufacturers; including parts from some German hidden champions such as Stabilus (liftgate gas spring) and ZF Lenksysteme (steering mechanism).

tesla-suppliers-2013(insideevs_com)
Model S relies on quality parts by suppliers  (image: insideevs.com)

Software is Pivotal

Nonetheless, it’s the software configuration in the Model S that makes the difference from regulating the available battery capacity (extended range) to other features (acceleration) that become available to its passengers.  Tesla added ‘Autopilot’ functionality and a self-parking feature to its fleet just recently – simply via remote software update. Voila!

Reaching beyond the individual vehicle the software running the car became the key to future mobility.  The question becomes who will own the car operating system of the future?  Chances are it’s the exponential silicon players from sunny California who are best positioned, experienced and deeply understand both, digital integration and exponential innovation.

Mercedes meets the software threat and opportunity by aiming to control this pivotal technology, which may otherwise be seized by more avid digital players such as Google, Microsoft or even Tesla.  Mercedes made some progress when it just announced its new E-class vehicles connecting and sharing relevant information with each other.

Out for the kill?

German luxury car-makers proudly announce their future ‘Tesla Killers’ playing catch-up with high-end electric cars of their own, such as Audi’s Q7 E-TRON Quattro, BMW’s i5 or Porsche’s performance vehicle Mission E (the latter two not available before 2019).  Tesla hardware is even coming under attack with future competition getting ready; among them  Silicon Valley’ Atieva and Tesla clones from China.

In true sports car fashion, Porsche’s marketing highlights 600hp for 0-to-60mph acceleration in under 3.5 seconds. Tesla already achieves this mark today. So where is the actual ‘kill’?

Porsche unvels Tesla Killer
Porsche unveils ‘Tesla Killer’  (image: CNBC)

The Mobility Arena

The real question aims at the next step: where will the drivers of the new Audi’s, BMW’s and Porsche’s charge their batteries on the road?

Looking at future mobility as an arena rather than just vehicles, Tesla’s venture also crossed other industries such as the critical battery business in partnership with Panasonic.  In addition, Tesla offers a wide-cast net of ‘SuperCharger’ power-stations free of charge for its customers at many highway rest-stops and gas-stations positioned to allow Tesla drivers to reach most areas of the continental U.S. already today.

Tesla Supercharger ranges (reddit_com)
Tesla Supercharger station with vehicle range  (reddit.com)

Fueling the Future

Here, Tesla secured the first-mover advantage in securing the precious real-estate needed at busy rest-stops.  In the long run, it appears doubtful that rest-stops will grant additional dedicated slots with proprietary pumps to every car-maker to recharge their line of vehicles.

Tesla SuperChargers
Tesla SuperChargers  (image: teslamotors.com)

So the German car manufacturers may be forced to cut a deal with Tesla adopting the Tesla technology and paying for using Tesla’s high-speed pump space on-the-go in the future.  Tesla even announced it will not enforce patent protection for anyone who, in good faith, wants to use the Tesla technology, which may smoothen over the adoption by other car-makers.

Outlook

Looking into the crystal ball, the automotive industry is not just about introducing more electric vehicles but is morphs to become a new mobility arena as Tesla is demonstrating.  Being still at the early stage of an exponential growth curve, Teslas are certainly not cheap to buy – yet.

Looking at electric vehicles simply as sophisticated hardware components, however, we may just enter a scenario in the not-too-distant future that reminds of Amazon’s successful strategy: giving the Kindle eReader (hardware) devices away cheap. Amazon is not interested in hardware but the content, the vast library of eBooks (software) fueling the customers’ demand, which makes all the difference and holds the keys to a proprietary, digital kingdom with recurring high revenues.

kindle-fire(michaelhyatt.com)
Amazon’s Kindle hardware is fueled by eBooks  (image: michaelhyatt.com)

German Innovation Insider: Holding the Brakes on Digital Innovation

German innovation gets trapped in the very mentality focusing on building quality products ‘Made in Germany’ that the country got well known for. Holding on to vertical product improvement, however, obstructs crossing industry barriers, convergence, developing game-changing business models, and coming up with breakthrough innovations with potential for exponential growth and returns.

Germany – Land of the ‘Hidden Champions’

A recent research study of the Centre for European Economic Research confirmed Germany leading by far with 1,550 hidden champions.  Companies are commonly considered a hidden champion if they are no. 1 or 2 on the world market, make less than EUR 1.5b revenue and their name is not overly well unknown to the general public.

Note that mid-size companies comprise 80%(!) of German industry and resemble the backbone of the German economy altogether. According to the Berlin School of Economics and Law, 90% are focused on B2B.

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Champions not only in world football (image: latintimes.com)

See if you recognize a few examples of hidden champions that are leading global players:

  • Dixi / ToiToi (portable toilets)
  • Sennheiser (headphones)
  • EBM-Papst (motor and fan manufacturer)
  • Enercon (wind energy)
  • Krones (bottling machines)
  • Recaro (car and airplane seats)
  • Trumpf (laser cutters)

Inside the Vertical Tunnel View

Among the 1.500+ market leaders, only two German companies are leading software companies (Software AG and SAP).  The vast majority focuses on more tangible product innovation leaving this digital industry somewhat isolated, underdeveloped and vulnerable like an economy’s Achilles’ Heel.

You get a good sense of a vertical bias in product innovation, when you read German open job postings for innovation lead position of sorts:  As an innovator in an automotive company, you require a solid background in engine engineering, for example, or as an innovation leader in a chemical consumer goods company, you will not be hired without in-depth knowledge of adhesives, for example.  It becomes painfully obvious how the vertical product innovation fosters a mindset of inbred solutions and can miss out on transformative opportunities beyond the own domain, bridging and converging industries.

3D-printed-German-car(partsolutions.com)
3D-printed car (image: carpartsolutions.com)

Point being: Innovators are usually hired from within a vertical industry. This leaves little room for a creative influx from the outside.  Since meaningful innovation ‘happens’ at the crossroads of disciplines in a horizontal cross-pollination of different industries and domains. This inflexible German practice lends itself to incremental improvement of products rather than disruptive transformation of businesses, entire industries or even across industry arenas.  Within a vertical mindset, ecosystem cross-pollination withers and innovators are less suited, prepared, capable, or enabled to disrupt.

Digital Transformation “Made in Silicon Valley”

When it comes to digital transformation, German companies got disrupted and steamrolled mostly by large-scale digital disruptors coming out of the United States from either California or the East coast technology ecosystems with huge global impact and a different approach:

  • The world’s largest taxi service owns no taxis (Uber)
  • The most popular media owner creates no content (Facebook)
  • The largest movie house owns no cinemas (Netflix)
  • The largest accommodation provider owns no real-estate (Airbnb)
  • The largest software vendors don’t write apps (Apple, Google) and so on.

The above examples differ from traditional products not only by bold out-of-the-box thinking but also by paying close attention to the customer.  Their business models rest firmly in the digital world with a software business and an internet backbone.

Uber and Airbnb offer digital platforms – that’s it, no tangible goods.  Nonetheless, they shake up the established industries of transportation and hospitality in ways unheard of.  They also reap exponential returns by creating new digital arenas that generate highest recurring revenue in the digital space.

Digital Industry (telecitygroup.com)
Digital business has arrived (image: telecitygroup.com)

Missing the Digital Train?

Back in Germany, its 1,500+ hidden champions flourish in a robust economy, so Germany must be doing something right overall with a vertical focus set on tangible quality products within industries.  Good money is still made in Germany by holding a steady course of vertical product improvement.

This practice also goes hand-in-hand in hand with protecting and not challenging enough the traditional sales-driven business models to avoid cannibalizing the status quo for next-generation innovations.  It reminds of the Kodak-Eastman story having invented the first digital camera but rejecting the technology in order to protect the business around the existing analog film products – and we all know what happened to Kodak.

A Digital Transformation Divide

Truly putting the customer in the center and embracing digital business requires a radical transformation of the existing business and its operations.  The critical interface between IT and Marketing, for example, often is not well developed in Germany, where traditional companies lack understanding of the digital potential and struggle with developing new, digital business models in time.

It is not a question but painfully obvious that -with the current mindset and strategy- Germany misses the train on digital transformation.  While the world moves online, many companies in Germany failed or simply ignored the emerging technological opportunities to develop digital business models consequently, in a structured fashion and timely.

Failure_to_Innovate(bobmaconbusiness_com)
Germany is missing the digital innovation train. (image: bobmaconbusiness.com)

In fact, German companies practically ‘gave up’ across entire industries including media, travel, and retail.  In a recent wake-up call, the German government asked companies and industries to focus on digital transformation in a widely proclaimed initiative called “Industrie 4.0” ‑ a race to catch up internationally.  And catching up is much needed: the narrow German ‘inside focus’ presents a vulnerability to be exploited by foreign disruptive players.  The gap widens steadily as the competitors advance fast, build up huge resources and become increasingly experienced to develop and apply digital transformation with new business models.

pessimism_quote(notable-quotes.com)
(image: notable-quotes.com)

Pessimism with an Insurance Mindset

The high level of disruption and uncertainty does not come easily to a less flexible German mindset:  Having experienced hardship many times during the not-all-that-distant history, Germans tend to seek and value predictability and safety.  Anxiety and fear of the unknown forms an undercurrent in the mindset of German society, which is expressed by seeking refuge in insurance policies to prepare for unknown future events.

As an example, not only do Germans over-insure their daily lives with a myriad of insurances, Germany also holds on to one of the largest amounts of hospital beds and bunkers per capita. You find more hospital capacity in the Berlin-area alone than in all of their neighboring country, The Netherlands!

In general, start-up funding is not as easy to come by as in the U.S., for example, where venture funding is a more common practice.  When I arrived in Germany a year ago, I came across a serious government program that ‘supported’ a new start-up or entrepreneurs with grants tied to a projected positive return-on-investment (ROI) within the first year.  Now, building a profitable business from scratch within in year is an unrealistic goal.  Consequently, the desperate entrepreneur in need of funding would have to submit a bogus business plan right off the bat, which is a set-up for disappointment down the road.  So, either the government program is not meant serious (unlikely) or is designed by people not knowing the first thing about starting a business (likely).

senior-woman-confused-by-tablet-computer(sheknows.com)
Reluctance to embrace technology? (image: sheknows.com)

Techno-Fear and Over-regulation

Overall, the German mindset tends to be more critical regarding new and unfamiliar technology.  Seeking to avoid risk comes with a tendency to ‘over-regulate’ in the sense of applying regulations just because it is possible to regulate rather than because it is necessary to come up with regulation.

Since a long time, Germany has the strictest data privacy laws (that recently translated into GDPR, Europe’s new General Data Protection Regulation).  The domestic law protects the individual by granting them the right to control their personal data online and offline.  These regulations are rooted in the country’s dark experiences during its Nazi-past but are also is a reflection of the outspoken suspicion among the broader population towards digital data technologies and their application.  Thus, Germans tend to be more reluctant to share personal data on social media out of fear of exposure and losing control.

The protective (domestic) legislation means well but can only be effective in a closed system, which the (global) internet is not.  In a digital world, international boundaries are artificial.  Given the nature and proliferation of digital technology and interconnectivity of people around the globe, keeping up the aspired high standards proves increasingly cumbersome if not impossible.

The German island can hardly be defended effectively over time.  It may protect the citizens from some harm locally but in return also isolates them and denies them access to the benefits of a technology that ever progresses globally.

Losing the Entrepreneurial Spirit

Given a rather pessimistic Germany mindset that is reluctant to fully immerse in the digital world, digital-resistant citizens appear poorly prepared for ‘moonshot’ visions, embracing the opportunities of Big Data Analytics or the vast potential of the Internet-of-Things (IoT).

German innovation death(deskmag_com)
Reluctant to start up a business (image: deskmag.com)

The present German ‘generation of heirs’ inherits the wealth created by their parents’ generation during the famous post-WWII decades known as the economic “Wirtschaftswunder” boom.  Very much in contrast to the U.S. or Asia, many Germans do not share the venturing spirit anymore.  They show reluctance to trying out something new such as building a business as an entrepreneur for several reasons:

  • Firstly, Germans tend to prefer a detailed plan before actively exploring an opportunity and strictly sticking to the plan during implementation. Besides the favorable element of thorough planning, this approach also reflects a deeper fear of failure and seeking a sense of security and predictability.  Deviating from the plan is often interpreted as a failure.
    But then, which plan ever is perfect and stands the test of a dynamic reality? Sadly, the debate then quickly tends to turn to finding a culprit when things go sour rather than making adjustments to keep moving on.
  • Secondly, German hesitation and even a good amount of pessimism roots in the stigma of a business failure, which seems to stick more in German society than in the United States. More than 9 out of 10 start-ups fail, but when a startup fails in the U.S this does not automatically translate into a personal failure of the leader.  It is much more seen as a learning experience, while a German CEO gets easily branded a loser.
    Surrounded by the ‘insurance thinking’ mentioned earlier it will be hard for the former CEO finding support for a future business or even employment in Germany after a venture failed. In consequence, the German CEO is more motivated to beat a dead horse rather than cutting the losses and move on.

Summary – Brakes on Digital Innovation in Germany

For all these reasons, visions tend to be smaller in Germany.  They are more designed to control risk than seizing exponential business opportunities.  Thinking too small, not disruptive enough and too focused within an industry prohibits to compete with the digital global players that emerged with exponential business models, such as the Googles, Apples, Amazons, Airbnbs, Ubers, and so on out there.

Brake-damage(dba.com.au)
Brake damage ahead! (image: dba.com.au)

What keeps the brakes on the German innovation machine is the inbred mindset and vertical tunnel vision with a focus more on products instead of customers, and the risk-avoidance and fear of applying digital technology to its full potential.  It traps many German companies in a self-limiting disadvantage compared to American or Asian competitors, which prove more venturous, flexible and generally optimistic.

The U.S., in particular, entrepreneurs come not only with a more flexible and optimistic mindset but can also tap into unique startup eco-systems in place (Silicon Valley, Boston, and NYC areas primarily) with easy access to bright minds, cross-pollination and venture capital.

Outlook

There remains a demand for physical, quality products in the future, such as the machinery, tools or cars we value today as Made in Germany, so the 1,500+ hidden champions look into a bright future.  Their reluctance to embrace the digital age, however, and transform to embrace new digital business models, however, may steadily push them to the sidelines as industries and arenas change beyond their input or control.