Understanding transformation as an opportunity

With 208,000 direct employees, Bavaria's automotive, commercial vehicle and supplier industries form the core structure of the Bavarian economy and have been writing success stories for decades. Nevertheless, it is currently facing a major transformation. In the future, the world of mobility will be multimodal, environmentally friendly and highly digitalized. What skills, resources and support services will be needed in the future to successfully master this challenging transformation process? In the following interview, our colleague Dirk Maaß talks about this in his function as transformation pilot at Bayern Innovativ.

Dirk, has transformation already arrived in companies and what do they understand by it?

Dirk Maaß: Basically, you have to say that the term transformation is not defined. Every company understands it to mean something different. Some see it as the change from combustion technology to electromobility , others understand it more as the digitization of production ; a change in user behavior certainly also plays a role here, for example with regard to autonomous driving. Sustainability is a very big topic that is becoming increasingly important, as are car-sharing models. All of this plays a role in the topic of transformation.
This means that we will not get a classic Wikipedia definition for transformation. Large companies have this understanding, smaller companies that and they also have completely different challenges that they are currently facing. There are companies that have been dealing with transformation for years, whether in the technological area or in terms of social development. There are also companies that are not yet ready. For these companies, this means they have to be careful not to be overtaken or get into turbulence. You can see, especially in the case of the big companies, that they have already done a lot of work on this topic, invested a lot of money in new production facilities or initiated new business models, partnerships and networks. Just everything you need to set yourself up really well in the transformation and also be able to successfully shape your market in the future.

Are there examples of companies that are not driven by competitive pressure, but proactively tackle the transformation on their own initiative?

Dirk Maaß: Yes, there are. Here I like to divide the companies or enterprises into three divisions: the transformation drivers, the transformation driven and the transformation willing. Transformation drivers are those who move forward. These can be large companies that open up completely new divisions, but they can also be start-ups that come to the market with completely new ideas and also help influence the market. And then we have the transformers , those who would also like to change and help shape the change process, but don't know exactly how to do it. Here we as Bayern Innovativ are then, among other things, also a good contact partner to give appropriate impulses. The term "transformation-driven" actually says it all: I do not move voluntarily from A to B, but am partially kicked or pushed away like a cue ball. I have to look at what I can do, how can I adapt my product portfolio? How can I myself also access new business models? I need new partnerships, new networks, probably also new supply chains. These are all huge tasks, especially for SMEs or small companies.

How do you make companies fit for the future and where are the potential stumbling blocks?

Dirk Maaß: Often it is the lack of mindset. After all, a transformation also means change. Changes in turn cause fear in many employees. What's in store for me in the future? Maybe it even means danger for me. If I have worked 20, 30 years in a supply chain as a Tier 1 or Tier 2, I have built up relevant competencies and my networks and supply chains. I know the materials and production processes . If I then go down a completely different path and adopt a different business model, for example not only being responsible for product manufacturing but also offering digital services, then that is new territory for me. But that also means, above all, that I need additional competencies.

So leaving your own comfort zone - Is that transformation?

Dirk Maaß: Yes, I would agree with that. That is certainly part of the transformation .

The management and the management level may have the certain mindset, but is that enough? Is not rather the whole company affected by changes?

Dirk Maaß: Yes, that is correct. The changes affect the entire organization. Change in mindset also means change in responsibility. Going new ways, really also times old braids to cut off - that means change. Now you may be asking yourself how to implement the many tasks that are coming your way. It is helpful to divide them into transformation projects. In other words, projects that affect the company and intervene in the corporate strategy, or transformation projects that only address individual departments or business units. But the fact is, you have to question everything: Where do I stand? Where do I want to go? What can I do myself? Where do I possibly need knowledge, competencies or even resources from external sources in order to tackle these projects at all?

The topic of training or education and further training of employees probably plays a major role here?

Dirk Maaß: Yes, definitely. This concerns the topic of competencies, which I had already addressed. If you look at how many competencies are necessary or what a skilled worker on a machine must be able to do today, it can no longer be compared with what, for example, a lathe operator or a miller had to be able to do 20, 30 or 40 years ago. Rather, a completely different training is required. Some skills I can acquire myself, others only to a limited extent. Then other partners can support in training and further education to accompany my skilled workers accordingly in the transformation and also prepare for it.

So a network is absolutely necessary, where I find exactly these competencies and where I can perhaps also contribute myself?

Dirk Maaß: Yes, there are different approaches. Of course, there are large companies that are very well positioned there, for example, in the form of in-house academies, or competencies from different areas can merge. So here it's a matter of internal knowledge transfer. The situation is a bit different for SMEs, as they are very dependent on external input. And that brings us to the shortage of skilled workers, which is often mentioned. However, this is not only taking place at the academic level, but also affects production in particular: machines have to be operated, some of which are much more complex today than in the past, but also offer more opportunities.

Is transformation ultimately not a purely technological issue, but aren't a whole lot of social components and qualifications also affected?

Dirk Maaß: Indeed, technology plays an essential role and is an important component, since innovations or even transformation are only possible at all through new technologies. But it is important not to forget people in the process. Because in the end, he is the driver and the one who must implement the transformation in the company and also in the sense of the customers

Is it true that SMEs in particular are more affected by the transformation than others?

Dirk Maaß: So an entire industry is affected by the transformation, both the large and the smaller companies. However, some projects are easier for the large companies, because they have more manpower and greater financial resources and perhaps also have better access to funding or to funding programs . After all, large companies sometimes even afford departments that can purely take care of the topic of funding programs, subsidies as well as promotion of projects, investments, etc.. That runs with many KMU besides and therefore do themselves there some KMU probably also a little more heavily than large enterprises. The challenge is the same for both, but the effects are more challenging for smaller and medium-sized companies in my opinion.

So SMEs in particular lack all the resources, both financial and human, to proactively address the process?

Dirk Maaß: Yes, it lacks resources but also knowledge. I would like to take up again the topic of funding: To whom can I turn? Which funding programs are there at all? Which ones are suitable for me? Which topics can and may I access at all? On the one hand, this is of course a resource problem, because there is often no dedicated position in the small or medium-sized company. On the other hand, it's also a financial issue, because every change - especially when I'm talking about new technologies - also means investment. And that doesn't just mean investing in new skills and specialists, but also in machinery, digitization and production. All money that small and midsize companies may not necessarily have on hand.

How can I specifically imagine the support offered by our transformation pilot team?

Dirk Maaß: We hold bilateral talks with the companies, often at management and executive level. Through this, we try to find out where the company is now in the transformation and whether it has already begun. If so, how far has it progressed? Where does it want to go in the first place? We also use a so-called transformation check for this, so that we can really look at the company level, i.e., the management level, but also the project level. Where does the company currently stand and where are there starting points? Where can we as Bayern Innovativ provide impetus within the framework of our Bayern Innovativ ecosystem? Here, we provide support, for example, with funding and networking opportunities, e.g. via our clusters or also through a direct referral of companies that we believe could be a very good match. In addition, access to incubators or to start-ups plays an essential role, especially with regard to new business models. These are the topics we address in an orientation meeting. This can then lead in the next step to funding advice or also to a partnership in our clusters. And there the companies are then also further accompanied and supported by Bayern Innovativ. Many companies also use the participation in a trade fair joint stand , in order to present their competencies and skills via this route at large and international trade fairs.

Do you only help the automotive sector or also companies from other sectors?

Dirk Maaß: Of course, we can also do this for other sectors. That's where our Bayern Innovativ ecosystem comes in handy with its various topics, such as health , n new materials , mobility , digitization , energy etc. It is precisely here that potential new areas of application for products and services can arise if sales can no longer be generated exclusively in the automotive sector. And that is the transformation that we are supporting and accompanying, including into other sectors. Access to medical technology could then take place via our Forum MedTech Pharma . Also, lightweighting does not always have to be in the automotive sector, but can also be applied in the construction sector. As I said at the beginning, the term transformation is very versatile and not necessarily defined. And in the same way, we now don't just have a template that we ll put over at the end of the conversation, but rather a really flexible and individual offer.

Transformation is also an important contribution to the topic of a company's resilience, isn't it?

Dirk Maaß: This is a diversification that most companies are now also pursuing. As I said, many have made 70, 80 or even 90 percent of their sales in the automotive sector in the past, but are now also going into other sectors, such as mechanical engineering, medical technology, aerospace, where they are then again also talking to new target groups. They also need a new argumentation for their products and services. There, too, we have a completely different supply chain - that means I have new customers and may have to install new production processes myself or adapt production and supply chains. All of this is transformation. Certainly a huge project for many companies, but indispensable. And what you mustn't forget: It's also a huge opportunity to gain a foothold somewhere else and lead the company healthily into the future.