#149 - the day after tomorrow instead of tomorrow: how to future-proof your company for 15 years

Joubin Rahimi

Great you're back for new episode of Insights. My name's Joubin, Joubin Rahimi, straight from Insights - The Conference, and next to me sits Dirk, Dirk Herrmann. You had opening keynote this morning. First, thanks for taking time to give us those insights, and it's already stated: day after tomorrow. We already said it in kitchen video, talking about day after tomorrow, and after you we also had great panel talk. Want to dive into that with you right away. But maybe you'd like to say two, three sentences about yourself again and about topic day after tomorrow, before we get into it, for everyone who wasn't here today.

Dirk Herrmann

Yeah, so I'm Dirk Herrmann, futurist for many years, and my topic Day After Tomorrow deals with time after tomorrow. In world out there our perception, meaning what we read in media right now, what we hear, what's happening, is in timeframe 0 to 5 years. That's this tomorrow we can still sketch out. Day After Tomorrow is timeframe that for me starts around 12, 13, 14, 15 years, more like 15 years plus, and that's what we don't have on radar at all. If we think back 15 years and ask ourselves: Could we 15 years ago even have imagined how world looks today? Artificial intelligence, autonomous driving, all technological revolutions out there. But also geopolitical tensions like we experience today, then we probably have to say: No. And if we go to next period, if we're 15 years from now looking back at today, we'll also say: No, we couldn't imagine today how world will look day after tomorrow.

Joubin Rahimi

What I also thought was great today in your presentation and Felix's, there was a certain parallel. Felix, founder of TIMETOACT GROUP, said: well, in the past there was asbestos, which turned out to be a pretty bad idea. Nobody knew back then. And then there was Domino, for anyone who remembers Lotus Domino. You could quickly build lots of applications with it. Then you had 100 of them, it was like a plague and you couldn't get rid of it either. We still have customers who have Domino, and it hasn't really been actively used for a long time now, let's say. Let's put it that way. And these are big cycles, time cycles. That was one thing. And then you nicely had two mirrors, I think it was Spiegel or Stern. Spiegel with fear, job loss. So if I have innovation, Germans are afraid of losing their jobs.

Dirk Herrmann

Yes, those were two Spiegel issues, 38 years apart, that ultimately had the same cover story. Will the future be jobless? Each with two robots. And because of this time gap, they looked different from one another.

Joubin Rahimi

And they didn't do that. So computers haven't made us unemployed either. That was also—

Dirk Herrmann

I believe that what's currently happening — we naturally have the effect that we're rationalising, and we're currently also seeing a large rise in unemployment, which, however, isn't caused by us automating more, but is primarily caused by the fact that globally, as an export nation, we're currently not selling our flagship products the way we used to sell them. And I believe that this phenomenon happening now, in the next 10 years 15 million people will leave the labour market. And that's actually also quite good in a way, because the parallel to that is, if we look at the year 1990, quite fascinating. The car market in Germany was completely flooded with used cars. Nobody wanted to buy new cars anymore. And then came the phenomenon, we had reunification, and all our used vehicles naturally flowed into our new federal states. That emptied the market and things got going again. If you transfer that parallel, or that analogy, currently towards robotics: yes, in future we'll be getting work done through artificial intelligence and through physical artificial intelligence in the form of robots. But we also have to, because the people who are now essentially giving up their jobs, because they're going into retirement, into pension, they'll be missing from the market.

Dirk Herrmann

We need to compensate for that, and as a result we'll probably see this effect again, that we get it compensated a bit.

Joubin Rahimi

And that's of course totally exciting, because it doesn't affect all countries. It's more of a German phenomenon really. Yes. Or is it Is it more German, not European.

Dirk Herrmann

That so many people are retiring?

Joubin Rahimi

Yes, exactly. Austria too, I think. But Italy, for example, I don't think so. They're not the same size.

Dirk Herrmann

Different pension system. And then people also retire earlier. And in Italy this self-made self-employment rate in rural regions is also much, much higher. Due to this decline in birth rates, this baby boomer generation, we have such a notch coming up now in demographic development.

Joubin Rahimi

That's a good way to look at it too. We just still need to fix the pension system. But the labour market won't be flooded with too many unemployed people if things go the way they're heading. But we're talking about the day after tomorrow and the changes that come with it. How would you, as managing director of a hidden champion, approach positioning yourself for the next years — 10, 15 years is difficult, but at least roughly hitting a corridor — so the company is heading in the right direction, at least in terms of general direction?

Dirk Herrmann

I mean, hidden champions exist in different disciplines, and we have to look at what the hidden champion actually does. Is it a technology leader? Does it manufacture a product? Is it in industry? We have different areas. What I notice out there, when I'm travelling around the world, is that our "Made in Germany" image is losing a bit of its shine worldwide. And that's naturally because we haven't really nurtured this "Made in Germany" brand. And I talked about it with Olaf Hartmann over lunch, who also gave a great masterclass here today. If a foreign tourist, let's say a tourist from Asia, comes to Germany and takes the train from Hamburg to Munich, then they don't actually experience this "Made in Germany" excellence the way they still have it in their mindset. I mean, that's bad, but there are just so many things that come together in this Germany brand. And we're still naturally benefiting worldwide from the high esteem we have. But this brand is losing its shine, and I think we need to work on that. And so I don't think it's currently a topic of robots and artificial intelligence yet, that we have the labour market we have.

Dirk Herrmann

The effect is still to come. It's just that we're currently selling little.

Joubin Rahimi

So, doesn't help now if we make nice posters, because touchpoints are everywhere when someone comes here. And you said, someone arrives at airport and let's take Düsseldorf or Frankfurt airport, Munich starting too, but already toilets simply aren't that clean. And then you're in Vietnam and think: Amazing. Dubai is exceptional case, right?

Dirk Herrmann

But you're touching on something there. I mean, you were just in Vietnam, and even in Thailand — if you go to a shopping centre in Bangkok, right where the Apple Shop is, on the other side, and use a toilet there, you'd think you were in a 5-star superior-plus-plus hotel.

Joubin Rahimi

Yes, totally.

Dirk Herrmann

In a shopping centre. And you arrive here in Düsseldorf at the airport, and if managers from Düsseldorf are watching, you should really look into this, because it's a real issue.

Joubin Rahimi

That's just how it is. That's why Olaf Hartmann, he's a brand experience pro, so to speak.

Dirk Herrmann

The market maker.

Joubin Rahimi

That's the market maker, exactly. And where are the touchpoints? What are the relevant touchpoints? And the toilet is a touchpoint, because pretty much everyone needs one after a long flight.

Dirk Herrmann

I think it's these small things, and it's the sum of these small things, that make up the whole. And that's exactly where we're currently losing out. And the day after tomorrow won't be better, I think, if we don't start really improving these small points. The sum of the small things, because that's our topic.

Joubin Rahimi

And we're getting a bit lost in the discussion, because my question was actually a completely different one.

Dirk Herrmann

Okay, show that again.

Joubin Rahimi

What would you say as managing director What? Data?

Dirk Herrmann

What do you do?

Joubin Rahimi

What would you do as CEO of a hidden champion to make that happen—

Dirk Herrmann

Yes, I think if he has a competitive advantage and is a hidden champion, then he has to consolidate it. He has to expand this competitive advantage and then, in the next step, push the communication, the brand forward, there with his product, which only he can do, or which he does best worldwide.

Joubin Rahimi

Yeah, so this morning we had Patricija here, yeah, who's racing driver. And in that discussion, and that's so great when you can just talk with so many smart people, especially today too, so training for me, I'd say, motorsport is something that also carries over lot into automotive industry, right. So ever smaller engines, more power, now with electric too, tons of innovations coming out of that. You gotta set up company differently then too. And that was logic where I said, we've built team here that did something for client we hadn't done before. So really did research work too. Things where we didn't know, does this work or not. And it works. That was great and it's proper fun. And then we realised: well, what did we actually do? We were like racing team. And now that goes broader. Racing teams weren't all same either. So really as entrepreneur you gotta then start different racing teams.

Dirk Herrmann

I was at your talk and I thought it was quite good that you said: everything has to work. Even the catering has to work, because if she doesn't eat properly as a racing driver, she has no performance.

Joubin Rahimi

And the team. If the team's in a bad mood, they say things like: ugh. Exactly, then, oh, forgot a screw.

Dirk Herrmann

But that's how it is when you look at these hidden champions again. Why did the hidden champions become hidden champions? Of course, there are companies with a brilliant product or a patent, which perhaps gives them an additional edge. But then there are those with a good product, and they also need an excellent team, good management, to actually play out that competitive advantage.

Joubin Rahimi

And Pip said, we obviously have super smart people here in Germany. Now the question is, are they hungry enough to really go for it. Because it's not about everyone somehow being carried along, but I think a critical mass being as hot as frying fat to generate new things. And there, you know so many countries and regions.

Dirk Herrmann

I think that when we talk about this topic, I mean, in politics the younger generation, Gen Z and Alpha, are accused of no longer having that, that pep. I think that's been said about every generation. At the moment it's perhaps becoming noticeable due to social media and other forms of communication. But I think, well my generation, my grandparents already said we were lazy. And back then it was called hippie life, today it's called van life. So I think somewhere it's always existed. I mean, we obviously need to create incentives, or create incentives that this generation, the Gen Alpha and Gen Z, want to embrace. We can't just apply our values, we wanted, in our generation, to build up assets, we wanted advancement, career, and those are perhaps things from a generation that Gen Z no longer wants today. And then of course you have to focus on better work-life balance, no question, but we also need to create incentives so they're motivated to deliver peak performance.

Joubin Rahimi

And then the question is: can we manage that, or do we need to look outside Germany and towards Europe?

Dirk Herrmann

Bring employees to Germany who want that?

Joubin Rahimi

I don't even know if they need to be brought over to Germany, but this racing team. Let me give an example. My sister-in-law was at Toyota Racing, and twice a year they'd invite family and friends. And then you'd be at a race in the morning, this was Australia, really early. So of course you were also tired. And then they'd always applaud whenever Ferrari overtook. I'm at Toyota though. Yes, but they'd all come from Ferrari.

Dirk Herrmann

Okay.

Joubin Rahimi

That was quite exciting. Toyota was never the best team, but not too bad either. So they had good people, but they weren't all that motivated.

Dirk Herrmann

Okay.

Joubin Rahimi

And the question is, how do we get them fully motivated, or do we already have them and my assessment is wrong.

Dirk Herrmann

I think it's always a management issue too, isn't it? The fish rots from the head. So as a manager, of course, I have to shape my team and also motivate them. I come from the investment world, and I remember an investment meeting with one of the top fund managers back then. And I was young, it was my first time in a meeting like that. And the fund manager said: Is it more important to have good management with an average product, or a top product with poor management? And he said: No, I'd always prefer the average product with good management, because it's a people business. And if I can't motivate my employees and, as you say, put together my team like in motorsport, then I can't deliver that top performance over the long term.

Joubin Rahimi

And I'd say let's take that as the closing word for today. We get to hear from Pipp Klöckner again in a moment. Yes, and I have another idea, but we'll discuss that in a moment. And maybe you'll benefit from it. Thanks anyway for your time. Thanks for being here today. Thanks for the insights. Thanks for being here the whole time, having talked to so many people to talk about the day after tomorrow. I think that's part of what contributes to all of us getting better.

Dirk Herrmann

Thanks for the invitation.

Joubin Rahimi

Sure