Transformation: Why new habits determine success

Herding Filtertechnik: The primacy of value creation and the art of omission

So how are VDMA members tackling these challenges? What does transformation mean to them? For the managing directors of Herding Filtertechnik, Dr Urs Herding and Fabian Schünke, creating value for the customer is the top priority. In doing so, the two do not place the technology or a transformation driven by tools at the centre of their approach. Rather, their focus lies on how they, as managers, think about their company.

For them, the art of letting things go comes first. “Every day, managing directors hear about all the things they’re supposed to do: the next tool, the next initiative, the next programme. What we actually need to do is to build really good filtration systems for our customers,” says Urs Herding. Fabian Schünke adds: “Focusing on creating value for customers must be the starting point – in day-to-day business, but also when it comes to innovation, that is, creating value for the future.” The role of management, he says, is to establish that focus for the organisation and to define what does not form part of it. “We call this the primacy of value creation,” emphasises Herding.

In this context, the managing directors have identified two pitfalls:

1. The pitfall of process illusion: there is not always a causal link between input and output where work can be mapped out according to fixed rules, as is the case in mass production. A good engineering idea, for example, tends to emerge rather through debate and discussion. “We must legitimise this world too,” says Herding, “by bringing the right people together and giving them the freedom to operate, rather than squeezing them into rigid milestones and reporting loops.”
2. The mindset pitfall: Sometimes one gets the impression that an employee is not acting logically. Schünke describes a pattern familiar to many companies: “A sales representative fails to coordinate with the design team, even though both want to produce something good. People are quick to say: ‘He doesn’t think like an entrepreneur; we need to tackle his mindset.’” Yet it is the context above all that shapes behaviour: targets, incentive schemes or areas of responsibility that cause everyone to focus solely on their own remit. “If cooperation is a prerequisite for innovation, then it is management’s job to legitimise and organise collaboration, rather than tinkering with the attitudes of individuals,” says Schünke.

At the end of their presentation, both noted that transformation is never complete. However, they found it helpful to discuss the issues outlined at management level.

Lukas Zimmermann also emphasises the concept of ambidexterity – mastering two conflicting demands simultaneously. Exploitation – such as optimising existing processes and ensuring stability – and exploration – such as innovation and responding flexibly to change – must coexist. “For us, this means working as efficiently and effectively as possible in our day-to-day operations, in line with tried-and-tested methods, whilst at the same time strategically developing the company through transformation projects.”

AZO has already completed numerous projects, such as the development of a management toolkit designed to help develop skilled staff into managers. A comprehensive IoT strategy has been drawn up and a service concept for raw material analysis has been developed. Lukas Zimmermann describes the latter as “a major initiative aimed at offering customers even greater benefits. “We identify the optimal raw materials for the end product specified by the customer.”

AZO would have had to tackle all of this even within a traditional organisational structure. Now, however, those directly affected have taken matters into their own hands because they have become active participants. Lukas Zimmermann concludes by summarising: “Transformation is not embedded through new terminology, but through new habits. And that is precisely where we see how ambidexterity is truly put into practice.”