Klaus-Hardy Mühdeck, current CIO of ThyssenKrupp and former CIO of Volkswagen, is considered Germany’s Prozesspapst – literally process-pope. He is the first CIO to change his title to Chief Process Officer.

In an interview with Computerwoche – Computer Week – in 2006 Mühdeck described his fascination with process management: 

“Processes network functions, no more and no less. Throughout my entire career I have been involved in processes. In most companies it is under the board member responsible for strategy. But the trend is clear. CIO’s are defining processes and systems.”

It is the CIO, says Mühdeck, who is the bridge between the demands of the company and the systems platforms and company-internal processes. CIOs need to be able to communicate with and understand the areas of development and manufacturing. 

You can only truly understand a company’s processes if you understand how the various functions and departments actually work.

The Fractal Factory

In 1995 Hans-Jürgen Warnecke, Head of the Fraunhofer Insititute in Munich from 1993 until 2002, published the anthology Aufbruch zum Fraktalen Unternehmen: Praxisbeispiele für neues Denken und Handeln – loosely translated as Breaking out into the Fractal Company: Concrete Examples of New Thinking and Acting. 

Warnecke instantly became known in the production world both in Europe and internationally. The book takes a deeper look at manufacturing processes addressing questions such as: On what principle are production processes based? How does change best occur in material flow processes? How can the quality of processes be improved?

Prof. Thomas Bauernhansl from the Institute of Industrial Manufacturing at the University of Stuttgart underscores the ongoing importance of Warnecke’s work:

“The concept of the fractal factory, which Hans-Jürgen Warnecke proposed in the 1990s, remains highly relevant and meaningful today for manufacturing companies. The visionary power of his organizational model can be seen at work in agile and flexible production structures.”

Klaus-Hardy Mühleck, considered one of the top experts among CIOs, stresses time and again the influences of Warnecke on his work.

Rules of the Game

Those who write the rules of the game, have the best chance of winning the game. Processes – how the work is done – make up the rules of the game. Within companies. Where the product is critical to success. Where “a better mousetrap” really can, for the most part, sell itself.

Let’s march it backwards. Customer. Product. Manufacturing. Product development. Science and engineering. German. The core is science and engineering. In Germany scientists and engineers are king. They enjoy the prestige. Herr Dr. Soandso. Even better, Herr Professor Dr. Soandso.

Let’s march it backwards. Customer. Solution and profitability. Problem and pain. Relationship management. Sales. Marketing. American. The core is understanding the market, maintaining a constant close relationship with the customer, understanding and meeting needs. The customer is king. Those close to the royal court are king-too. They enjoy the prestige. The insider. The trusted.

Germans want to have the say about process, about how the work is done. For them it is make or break, success or failure. It’s the name of the game. Americans are happy to concede it, as long as the Germans concede to them the customer.

Mistaken thinking, or at most half-thinking. On both sides.

New media – New political parties

Before the Internet offered new ways to communicate, small political parties in Germany had barely a chance to make it into the Bundestag, or parliament. By law they have to receive at least 5% of the vote.

Each and every political party receives government subsidies to finance their election campaigns, but based on how many votes they get. The more votes received, the more money to run campaigns. The problem for new parties is that they have to first finance their campaigns out of their own pocket in order to gain any degree of name recognition.

Traditional modes of political advertising are simply too expensive for start-up parties. They can never get enough voter momentum to receive significant amounts of money from the government. A catch-22 situation, or chicken and egg situation.

The rules of the game have changed, however, with the Internet: Facebook, Twitter, and other kinds of social media. Now small, unknown parties like the Piratenpartei, literally Pirate Party, are able to compete with the major, long-established political parties: Christian Democrats, Social Democrats, Free Democrats, Green Party.

Like in the Middle Ages

The discussions and debates about processes and their integration almost inevitably lead to power struggles: between corporate central functions, and with these as proxies for line management. 

Americans view these as the German tendancy towards navel-gazing, even though the real battle is taking place externally, in the market. Too much time and energy is devoted to organizational structure and internal rules of engagement. It distracts the company from the real work. Employees become frustrated.

2010. A German Dax30 company with a large operation in the U.S. A high-level American manager said: „It‘s like in the Middle Ages. German top management is constantly fighting over turf. The one stands in his castle high up on the hill looking across the river at the land of his rival thinking how he can get a piece of it. His rival is looking back thinking the same.“

And it really is so in many German companies. Prestige, influence and power are directly related to size, of organization, of revenues, of areas of responsibility. Compensation, too, is linked to the size of one‘s organization, literally to the number of employees.

So not only do Germans fight about organizational structure – whose team gets bigger, whose smaller – but also, and equally as important, about processes – how the work is done. Who does what and how.

East meets West

In October 1990 the two Germanies were reunited. East Germany became a part of West Germany. Most of what the East Germans were familiar with disappeared overnight.

Social rules, attitudes and opinions, cultural life, recreational habits, all of these began to change. East Germans had to adapt to a German spoken differently. People greeted each other with a „Hi!“. They ate chicken wings instead of broilers. Pepsi and Coca Cola was substituted for the East German Club-Cola. Colleagues worked in teams instead of in collectives.

East Germans had to quickly adjust. They had to become wary of shifty West German „deal-makers.“ Appliances, machines, automobiles, telephones, etc. worked differently, were confusing. An entire society of over 17 million people had to suddenly adjust to the rules of another society.

The change was difficult and confusing for the East Germans. In every sense of the word they were at a disadvantage over and against their new fellow German citizens. The rules – the processes – were not theirs, not East German. They were West German.