Germany’s Digital Business Transformation By Design: Philip Beil, Tom Schaafs, Christian Waitzinger
Interview by John Maeda @ Publicis Sapient
We bridge strategy and engineering.
JM: The world sees Germany recovering faster than many other countries in the C-19 era.
First of all, how have you seen conditions changing in the last month on a personal level, and for businesses over there in Germany?
From a health perspective, Germany has not been hit as hard as certain regions in Italy, Spain, or France.
This is most probably related to a better control of “super-spreading events,” a strong healthcare system and the population’s acceptance of measures such as social distancing. Nevertheless, the German economy has been and will be massively impacted by the crisis.
Personally, my work-life balance has gotten better. I have much more time with my daughter, which is great.
Only caveat is that she lives in the Netherlands with her mom. But during these extraordinary times we teamed up and co-parented more. It meant that I had to cross the border between the countries a couple of times. I found the effects of COVID-19 to be quite similar in both countries, with slightly more emphasis on “intelligent distancing” in the Netherlands — meaning it is left to the individual to take protective measures but it´s not mandated. I got jealous though when I saw how quickly, effortlessly and pragmatically the Netherlands takes to digital, e.g. my daughter’s school work continued in Google Classroom as of the beginning of the quarantine.
Designers are expert observers — so I quickly noticed how people moved very cautiously and creating interestingly awkward situations. For example, when walking down supermarket aisles, passing each other by on the street, or weirdly jerking in reverse direction out of a hug half-way. Everybody has a safety space and avoids intruding other´s safety spaces. Like invisible cocoons. Over time, this has become more relaxed, or simply feels more relaxed since it became common.
We still have many organizations that rely on conventional, analog processes. I’ve just read a story about how the public health department faxes their stats to other institutions. I mean, really?
And now as we are slowly opening the schools again, officials are realizing that our schools don’t have hot water in the restrooms because the buildings are so old. I’m not even talking about broadband access or sufficient digital devices for students to learn. We have a lot of catching up to do.
That said, we have a fantastic healthcare system here in Germany. Health-wise we seem to have things under control. For now. But like everywhere else in the world the pandemic is a huge burden — especially for families with children. Many people are on furlough, reduced work hours or even lost their job. Despite a very good social safety net, people are suffering. And they are starting to voice their discontent.
“Business transformation requires the fusion of many capabilities and not just design. That fusion, however, can — and often is — greatly orchestrated and guided by design. Because design is invaluable in the creation of desirable alternatives.” — Tom Schaafs
JM: What does the economic impact look like currently and in the near term for Germany?
Philip Beil: With industries like Automotive or manufacturing and the world’s highest export ratio, Germany is not only depending on the domestic economy but also heavily impacted by demand changes in the global market place.
In addition to this, many supply chains such as in the automotive industry are international ones and therefore are massively impacted by shut downs around the globe. With regard to domestic demand: we already see today that the unemployment rate has increased at unparalleled speed and the number of government subsidized short working authorizations (Kurzarbeit) is at more than 10 million already. In the aftermath of the financial crisis this number had peaked at around 3 million. The direct impact is less money available, as well as the fear of potentially losing one’s job or to take pay cuts as the German economy slows down significantly.
After the recent reopening of smaller retail stores, the number of shoppers was way lower than expected. Also many online retailers especially in the fashion industry are struggling with the low demand. So, overall the situation is extremely challenging in Germany and it clearly illustrates how interwoven today’s global economy has become.
Christian Waitzinger: Our economy is largely dependent on exports — a global pandemic like C19 leaves deep marks. The “price-to-book” ration of DAX firms´ market capitalization to the book value of their assets is hovering barely above one — which is not good.
Germany has taken massive measures to support businesses. So far they pumped over 460 billion Euros into the system. We will see how effective these measures will become — it’s too early to tell at this point. I personally anticipate a long and hard road ahead of us.
Personally, I’m doing fine. In a weird way I’m enjoying aspects of this crisis — that’s just how creatives tend to take in the world. Change is good. I’m living a more conscious and healthy lifestyle. There is time for reflection. Everything goes at a slower pace. You come back to the things that really matter in life.
Tom Schaafs: Germany made some good and timely decisions for our safety and for our economy. But there are so many variables at play. It is difficult to predict how the crisis will manifest. I’m an eternal optimist so I see things are starting to look up. And I’ve admired how some of the smaller countries have stewarded the crisis remarkably well, like Sweden, Singapore, and New Zealand.
Our local business challenges are significant because much of our industries are centered around manufacturing for the global economy. And the pinches were, and continue to be, felt instantly. However, everyone is making their effort to continue forward and to live as normal a life as possible.
There’s two silver linings that I’ve noticed emerge from within myself and also in my colleagues:
- We’re all in this together. There’s a comforting parity for everyone to be stuck in the same situation. We are all a bit more connected, not just digitally, but by shared circumstances. Remote working levels authority, softens hierarchies, and creates a more conducive culture of collaboration.
- The crisis is like an incubator. It introduced a new set of parameters under which “old” habits are being squeezed out while new ones are being nurtured. That is a much-needed nudge for a country that adopts digital rather slowly.
JM: Design is an important aspect of European cultures — especially Germany with its revolutionary history of the Bauhaus. But there’s still a kind of attitude in the business world that design is only about aesthetic gymnastics or the likes. How do you think that the perception for design might be changing right now due to the need to digitally transform businesses?
Christian Waitzinger: I’m not sure I agree with this statement. Is there this kind of attitude towards design? I think in particular the Germans broadened the definition of design early on. The Bauhaus philosophy was to combine beauty with everyday function and to unify the principles of mass production. We understood back then that good design must bring value to the user and to the business. You can see that in German Engineering also, where design plays a much larger role than making things just look good.
And as much as I admire the Bauhaus philosophy I’d say we maybe overdid it a little bit on the functional and systematic side of things. A lot of designs, from architecture to physical product design to digital experiences aren’t very differentiating these days. In many cases I find they lack a certain soul and are maybe a bit too utilitarian.
I’m not saying we should go back to traditionalism — but a little bit more beauty, playfulness, wonder and surprise would do us good. I appreciate systems design quite a bit, but it still needs to be differentiating and emotionally captivating. My hope is that computational design and AI will allow us to come up with more interesting solutions beyond the norm.
Philip Beil: With the increasing speed and degree of digitization, we see and feel significant changes in the way we interact today and tomorrow. Many physical touchpoints will be replaced by indirect or digital ones. To avoid negative impacts in customer satisfaction and exhausting situations, experience design has to be front and center in all digitization efforts and focusing on both external and internal customers.
With customer experience as the key differentiator in many important industries and Customer Lifetime Value as the overarching KPI, experience design is more important than ever. The German design history is full of great examples of combining highest quality engineering with a highly functional and usability driven design approach. What has been valid for the physical world’s architecture, product design, and the communications sector will now be equally important in the digital space.
“I love to see that our planet is healing a little. The air is cleaner. Everybody is eager to get back to ‘normal’ but I personally wouldn’t want that. We need a ‘new normal’ for our planet and work both collectively and as individuals to make that happen.” — Christian Waitzinger
JM: What are your hopes and aspirations for the way that Experience Design can make a greater impact for clients’ specific needs in the DACH (Germany, Austria, Switzerland) region?
Philip Beil: I’d love to showcase our unique ability to solve our clients’ problems around digitization by combining our strategy, technology, and experience design capabilities.
That is what lets us create tailor-made and impactful solutions in a very short timeframe. It’s the best time ever to bridge strategy and engineering with experience design.
Tom Schaafs: This is simple: by leading us to a future of fully fused capabilities. That´s when we are unparalleled and undefeated. No one does what we do, when we all “mind meld” over a business challenge.
Designers naturally fuse disparate ideas. Combining things comes easy to them. And a good designer comes with a “customer centric” attitude straight out-of-the-box. That qualifies us to bring together the various perspectives of our capabilities, and connect them towards the creation of value.
Christian Waitzinger: Now that digital transformation is on the top of everyone’s mind my hope is that design as a bridge between strategy and engineering will be understood as an integral part of the whole transformation process.
We should be involved in the process from the get-go because we can help to shape new opportunities. Design delivers tangible value. And we can measure it and prove the return on investment (with the help of our data people :-). We can help our clients to design the right things and design things right. Craft is only one aspect of it.
We’re seeing our clients quickly learning how digital experiences need to evolve over time. It’s not just about creating a “finished” experience; it’s about the continuous iteration over time — leveraging data and generating new data.
All too often we think of good Experience Design as the ability to just “attract” or “convert” potential new customers. I think we can create much greater impact when focusing on existing customers and how to improve their product or brand experience over time. Good customer experience is rocket fuel for customer lifetime value.
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