Debit and credit - or: what you can learn from a 160-year-old book about digitization
Soll und haben is a long-forgotten book from the genre of professorial novels from 1855.
One of the storylines describes a noble landowner who fails intellectually and organizationally - and then also financially - as a result of industrialization.
However, the caricature of a stubborn Junker is not drawn: the Herr Baron just does what barons used to do: military service, administration of property, social obligations.
But the centuries-old imprint of the family on property overwhelmed the nobleman in a time of rapid change.
He couldn't think his way into a new world of stocks, factories and futures - this world was so foreign to him that he lacked the motivation to deal with it.
This is how the decline of the baron and his family takes its course and he loses almost everything to market participants who already carry this new era in their DNA.
Consequently, the baron only manages to save his last belongings with the help of a friend from this new era.
It is worth looking at the problems.
They result from the fact that a successful family with centuries-old traditions has to assert itself in a world that no longer understands it.
This case is therefore also suitable as a metaphor for the digitization of our time:
There is no individual failure here in the true sense of the word: there is a lack of understanding for a new era and a strategy to meet it.
Emotional rejection of industrialization
The Baron feels just as great a social distance towards merchants with their shares and share certificates as perhaps a few years ago some corporate bosses felt towards any startup CEOs.
Here property with hundreds of years of tradition, with agriculture and stables - there, dubious papers that did not exist 10 years ago and are now said to be worth more than house and yard.
This inner rejection of the new age is the real nucleus of the misfortune.
One tends not to engage in things one dislikes. So does the baron.
This results in a dangerous competence deficit for the baron.
He is not in a position to assess opportunities and risks, but hears one thing here and another there – a real assessment is impossible for him.
This continues in the selection of his advisors: without the possibility of professional consideration, the Braon ultimately trusts a dubious whisperer.
In addition, the overall process remains closed to the Beron: He only hears and experiences fragments that do not form any image for him.
He also has no understanding for the parties and interests involved.
Delegation to people with opposing interests
The baron fails to provide his advisors with an incentive that is aligned with his own interests. He relies on a traditional presumption of loyalty. So he soon finds himself in a situation where merchants are pursuing their own interests with his money - and the baron remains in the dark for far too long.
The basic strategy of the baron - securing and increasing the family fortune - played no role in the actions of his advisors, since they could achieve greater benefits for themselves in other ways.
Old processes in a new time
And so the baron sits in his castle as his ancestors did for centuries:
He waited for messengers or sent them out, ordered his advisors to report, and cursed if it took longer than desired.
He was unaware that while he waited at the castle and did what he always did, the world outside was moving fast. Letters rushed back and forth there, contracts were signed, promissory notes changed hands - but since the baron was not part of the process, all this remained closed to him.
So fate takes its course and in the end the baron has to exchange his family castle for half a ruin in the province and can only keep it with great difficulty.
At the beginning of the evil was an emotional rejection of the fact that the world was changing.
That something that didn't exist 10 years ago had reached an enormous relevance that eclipsed all the belongings he had - he couldn't and didn't want to see that - Nokia sends its regards.
In addition, his own social self-confidence meant that he expected respect and loyalty from business partners, when only his own interests prevailed.
Many entrepreneurs were and are in a similar starting position as the Baron:
One would love to continue to exist as before, but one constantly hears something about the new digital world that one shouldn't ignore.
But what's the best way to go about it? How do you assess risks and opportunities? Who do you rely on?
The baron and his time have long since disappeared. Nevertheless, a lot can be learned from his story:
Where change happens, it must be accepted and understood.
Even more so than the Baron, we live in a time that is characterized more by change than by consistency. You have to accept change as a constant in entrepreneurial thinking and acting.
Relevant topics cannot be delegated without being understood. The top management must really understand these developments and forces.
A strategy must therefore be fully thought out and understood at the top in order to be able to incentivize those responsible for implementation congruently - without this, the strategy will not be successfully implemented.
The internal processes must be measured against the number of beats in the "world out there". If the internal organization and the processes do not reflect the speed of the market in which you operate, you will not be able to hold your ground.
And the speed of the market today is determined in many areas by the speed of technological progress:
Optimizations are conceived here, new solutions to old problems are developed and things are designed that seemed unthinkable 5 years ago.
This also makes passivity the mortal enemy of the organization:
The mantra "don't do anything, don't do anything wrong" that has become a culture in many organizations must be broken through by means of suitable targets, a new error culture and a greater willingness to experiment.
In a world of consistency and linearity, experimentation and tolerance for error are potentially harmful.
In a world of constant change, these two characteristics are necessary prerequisites for the continued existence of a company.