The Munich Security Conference (MSC) has become the major global forum for the discussion of security policy and - according to the participants - Wolfgang Ischinger, the CEO of MSC, even topped last year's event.
This February, he brought together more than 600 senior decision-makers from around the world, including heads-of-state, ministers, leading personalities of international and non-governmental organizations, as well as high ranking representatives of industry, media, academia, and civil society, to engage in an intensive debate on current and future security challenges.
My take-aways from participating in this year's MSC:
1. On Russia. Russian Prime Minister Dmitry Medvedev said, "We are back in the Cold War." His country's bombing of Aleppo and other parts of Syria has gotten the Russians back on the global stage through brutality that has caused new waves of refugees to emerge, which have the effect of destabilizing Europe, particularly Germany. It is unlikely that sanctions will be loosened. Moreover, Russia was seen as another destructive force alongside the Islamic State. Russia was also denounced for actively supporting right wing movements in Europe, with Pegida and Front National getting financial support and training from Russian foundations. In addition, the Russians were allegedly behind a large number of cyber-attacks targeting EU governments, agencies and companies. (According to Timotheus Höttges, the CEO of Telekom, there were reportedly one million attacks in 2015.)
2. On the risk of war. Russia and the US are supporting the Syrian Kurds in the fight against IS, but the expectation was that Turkey would intervene in Syria to stop the Kurds from using their new powers to establish an autonomous region. This raises the possibility of Turkish troops directly facing Russian soldiers within 30 kilometers of the border – prompting NATO representatives to expect an "Article 5" or Collective Defense scenario.
3. On Europe. Europe's foreign and security policy is viewed as a total failure – and the disparity between Eastern and Western Europe is seen as a real threat to the European Union.
4. On the United States. The US was less prominent at this year's MSC than in recent years. US State Secretary John Kerry did not provide leadership on any of the topics. Senator John McCain confronted the Russians openly but appeared to lack ideas on the way forward himself. The entire American delegation boycotted the gala dinner hosted by Bavarian Minister-President Horst Seehofer to protest his recent meeting with Russian President Vladimir Putin, as did the overwhelming number of German parliamentarians. Business leaders were pleased by the announcement that the Obama government will definitely bring in a draft of the Transatlantic Trade and Investment Partnership by fall 2016, which would make it mandatory for the new American president to ratify the contract.
5. On the refugee crisis. The widely shared view seemed to be that the current wave of refugees is not the peak but rather only the start of a migration trend that will persist for decades. Interestingly, experts and politicians agreed that there would be no effective way of shutting the external borders of EU – neither on land nor at sea – and that the EU would need to intervene in those countries receiving an overwhelming number of refugees. At the same time, many appeared to believe that the EU will unable to meet these needs in the short- and medium-terms.
6. On potential health crises. A panel dealt with other security threats, highlighting health as an issue. Pandemics are expected to increase, with UN experts estimating new kinds of illnesses with the potential to kill between ten to 20 million people in a span of eight to ten weeks, thereby destabilizing entire regions and causing further waves of refugees, spreading the illnesses to Europe rapidly.
Follow Torsten Oltmanns on Twitter: @TorstenOltmanns.
Thought Leadership
Wednesday 17 February 2016
Monday 16 November 2015
Eine Frage der Wahrnehmung
Es hat sich etwas
grundlegend verändert im Verhältnis zwischen Unternehmen und ihren
Stakeholdern: Aus einem Gleichgewicht der Kräfte ist eine Situation geworden,
in der einige wenige Akteure mit entschlossenem Handeln, unorthodoxen Methoden
und breiter Mobilisierung der Öffentlichkeit den Lauf der Dinge nachhaltig
verändern können – und Führungskräfte, die dieser neuen Dynamik nicht Herr
werden, um ihren Job fürchten müssen. Wer auf asymmetrische Konfliktstrategien
und Regenbogenkoalitionen kritischer Stakeholder keine Antwort findet, droht an
„Social Power“ zu verlieren.
Die gerade erschienene
THINK ACT-Publikation „Eine Frage der Wahrnehmung“ leitet nun auf Basis eines
neuen konzeptionellen Ansatzes konkrete Handlungsempfehlungen ab, wie
Unternehmen und ihre CEOs den neuen Herausforderungen der Netz- und
Mediengesellschaft begegnen und ihre Wahrnehmung aktiv steuern können.
ManagementRadio sprach mit Torsten Oltmanns, Partner & Chairman Global Marketing bei
Roland Berger über die neue Practice Group „Executive Communications“ und deren
“Perception Value Management“-Ansatz.
Um das Interview mit Prof.
Dr. Oltmanns hören zu können, bitte diesem Link folgen.
Zum Download der THINK ACT -Publikation "Eine Frage der Wahrnehmung", hier klicken.
Wednesday 1 July 2015
Perception matters – CEOs in the public eye
Some six months ago, I wrote about how CEOs
can keep their jobs with five new rules of perception that were the result of a
study conducted by Roland Berger Strategy Consultants. Since the turn of the
millennium, company performance is not any longer the most important indicator of
a CEO's success. Nowadays the CEOs public perception and its effective
management decide the CEO's future and often the company's market value too.
The case of the CEOs Anshu Jain and Juergen Fitschen shows that good performance does not necessarily leads to a fair and positive perception too. Both have resigned, after losing the stakeholders' general trust and in the fallout of the financial crisis.
Nowadays the perception of a CEO is either
a liability or an asset to the company. CEOs have to provide orientation and
guide the company and its employees. Poor perception does not only leave an impact on
the CEO's career but also on the company's reputation and image too. Moral compass
and integrity are becoming more and more important for all
stakeholders and the general public. Due to the increasing participation of
stakeholders, executives must persuade not only the supervisory board and the
administration but also the public and mass media in general.
Executives should be able to determine weak points in their perception and develop personal plans tailored to situational use to avoid the discrepancy between CEO's vision (strategy) on the one hand, and the reality on the other. Today CEOs not only have to persuade the stakeholders but also mass media and the public in general. That’s what makes CEOs perception so important and valuable for companies and executives.
Perception
needs to be managed professionally
This example shows that companies and CEOs
need to manage their perception effectively. Roland Berger Strategy Consultants
developed an analysis tool that enables companies and its executives to
identify a CEO's current perception and develop measures to be taken as well as
strategies using three different media channels for the improvement of a CEO's
perception. This tool enables executives and decision- makers to compile
pre-emptive as well as ad-hoc strategies to steer the perception in the
direction needed.
To learn more about Roland Berger's new business unit "Executive Communications", with experts in professional perception management, see this recent article in PR Magazin and watch this video.
Tuesday 19 May 2015
Investing in the digital future
Third of a three-part series on policy recommendations for the digital agenda in Europe
To date, Europe has invested far too little in the digital future. In the USA, venture capital equivalent to about EUR 17.5 billion is channeled into this field every year – compared to a meager EUR 3.5 billion for the whole of Europe. Nor is this figure linked to a shortage of capital: Around the globe, EUR 170 trillion of free capital is in search of sound investment opportunities. To reinforce our digital future, we must therefore create necessary conditions that make private investment in infrastructure and start-ups worthwhile. Suitable levers could be to stagger the licensing of internet services based on performance and security or to grant tax breaks on venture capital.
Creating access
Big data, cloud computing and e-commerce: These and other digital technologies are influencing the whole of Europe's economy and society. Access to them must be advanced, while damage and abuse must be prevented. It might sound tempting to cultivate a harmonized digital industry in Europe with subsidies, as was once done in aircraft construction. The cost would, however, be astronomical – and many times more complex than the successful example of Airbus. On top of these considerations, too much state intervention could stifle innovative capabilities in this rapidly-changing technological environment. It follows that the EU should, first and foremost, adjust conditions such that a European digital industry can develop itself, and that businesses are also free to source critical ICT skills with transatlantic and Asian partners, without this putting them at a disadvantage. In particular, these conditions must include a single European market, a legal framework for partnerships with the USA and with Asian countries, and a strict procurement law.
To learn more about the digital transformation of industry, click here.
To date, Europe has invested far too little in the digital future. In the USA, venture capital equivalent to about EUR 17.5 billion is channeled into this field every year – compared to a meager EUR 3.5 billion for the whole of Europe. Nor is this figure linked to a shortage of capital: Around the globe, EUR 170 trillion of free capital is in search of sound investment opportunities. To reinforce our digital future, we must therefore create necessary conditions that make private investment in infrastructure and start-ups worthwhile. Suitable levers could be to stagger the licensing of internet services based on performance and security or to grant tax breaks on venture capital.
Governments and industry also need to
engage in a structured discussion about sharing the burden of investment within
the framework of digital transformation. All relevant players should be
involved in finding out how huge pent-up demand for investment can be spread
across providers, consumers and governments.
The public sector itself must likewise
take action to work off the existing investment backlog in Europe's economy.
Funds from investment programs should be used primarily to promote the digital
transformation and exploit the resulting opportunities. For instance, it is urgent for more funds from the Juncker plan to be channeled
into investments in digitization. This money could be used to
achieve progress in many important areas, including:
·
The production of technical
infrastructure for the digital economy (Europe-wide expansion of broadband
networks)
·
The promotion of digital
start-ups
·
The development of new
instruments to mobilize private investment in the digital economy
·
Research into and development
of a European cloud with high security standards
·
Changes to the educational
offerings available to schoolchildren and students and for employee
development, with the aim of acquiring, improving and updating core
capabilities for the digital future
·
The promotion of flagship
projects within the framework of the putative European economic alliance
·
The promotion of big data
applications by the scientific and corporate communities
Creating access
Big data, cloud computing and e-commerce: These and other digital technologies are influencing the whole of Europe's economy and society. Access to them must be advanced, while damage and abuse must be prevented. It might sound tempting to cultivate a harmonized digital industry in Europe with subsidies, as was once done in aircraft construction. The cost would, however, be astronomical – and many times more complex than the successful example of Airbus. On top of these considerations, too much state intervention could stifle innovative capabilities in this rapidly-changing technological environment. It follows that the EU should, first and foremost, adjust conditions such that a European digital industry can develop itself, and that businesses are also free to source critical ICT skills with transatlantic and Asian partners, without this putting them at a disadvantage. In particular, these conditions must include a single European market, a legal framework for partnerships with the USA and with Asian countries, and a strict procurement law.
There is much at stake. Digital
transformation presents huge opportunities for European industry. That means
that policy has to speed up – as companies have to do, too. As Daimler CEO
Dieter Zetsche put it: "Basically, the political and business communities
must give clear visibility to digital transformation as a key future topic
in Germany and Europe. Closer cooperation is urgently needed. Only then can political
goals and business planning be reconciled with each other; and only then can a
divergence between political statements of intent and the reality on the
markets be prevented." That's exactly what the US and Apple did.
To learn more about the digital transformation of industry, click here.
Monday 4 May 2015
Aligning European response and regulations in the digital age
Second of a three-part series on policy recommendations for the digital agenda
Europe's strengths lie in the diversity of
its players and solutions and its outstanding industrial skills. Standards that
make too little provision for these strengths and that make it more difficult
to apply production expertise in the form of embedded software, for example,
would undermine the competitive strength of European industrial companies and
threaten the future prospects of the entire economic area. The interests of
European industry must therefore be spelled out clearly, and regulations that have
a bearing on competition must be formulated in such a way that the
opportunities arising from the digital transformation can be exploited.
Europe's political arena should support
this process. The National Platform for Electromobility in Germany is one
example of how umbrella organizations, research institutes, companies and
unions could bundle their interests. It would thus be welcomed if the EU
Commission for the Digital Economy and Society were to set up a European
alliance for digital transformation. For example, companies and governments
could define a coordinated, joint approach to dealing with the American
Industrial Internet Consortium. European interests will only be protected
in the long run if Europe presents a unified response to America's current
dominance.
Implementing a balanced regulatory
framework. Aside from general standards, the regulatory framework too must be
aligned with the digital age throughout Europe.
First, a harmonized, balanced and genuinely
pan-European single digital market is needed in order to overcome current
fragmentation. Such a market could slash costs and realize synergies through
improved access to information, lower transaction costs, dematerialized
consumption, a smaller environmental footprint and superior business and
administrative models. Huge gains in efficiency could, for example, be realized
by consolidating the telecommunications market. By way of comparison, Europe
has 55 separate mobile networks, while the US has just five.
Second, the EU's future legal framework
must guarantee technology neutrality and support the use of the most efficient
technologies. One aspect of this is to provide harmonized mobile broadband
spectrums in line with European demand. To place investment on a secure footing,
stable rules governing the use of frequencies must be established throughout
Europe. It is also important to give due account to the peculiarities of
internet companies in market analyses and competition procedures. The aim must
be to give a greater weighting to dynamic competitive effects (innovation).
Third, data protection for the EU has to be
harmonized. The current European Data Protection Directive dates back to 1995
and is in need of reform. It must be brought into line with conditions in the
digital world, quite apart from the issue of considerable differences in
national data protection laws. Any provider who sells cloud computing services
throughout Europe, for example, has to know and comply with all these different
regulations. Instead, a new EU-wide data protection law is needed that should
also apply to global players that operate in the single European market. It is
therefore important to ratify the General Data Protection Regulation as
quickly as possible. This legal framework must then also ensure that law
enforcement no longer runs aground in the way it does today due to the lack of
clearly defined competencies. The protection afforded to sensitive data must be
aligned with different risks, albeit without causing innovation to grind to a
standstill. Otherwise, the opportunities afforded by big data will be wasted.
Fourth, laws that are of relevance to the
digital transformation must be reviewed. The majority of all current laws and
standards were drafted at a time when many digital technology applications were
still inconceivable. That explains why highly automated driving, for example,
is incompatible with prevailing laws. The legislator must keep up with
technological progress and review all valid laws to determine whether they are
suitable for the digital transformation.
Fifth, antitrust laws must have a global
orientation. The market for IT and electronic communications is global, so
network effects play a crucial role. Other regions of the world are much more
given to ex-post regulation than Europe is. In those regions, global IT and
internet firms emerge that are not regulated until such time as they have
reached a critical mass. Yet it is virtually impossible to build this kind of
dominant market position from a European base. Although native European
companies play in the same global market, they are bound by national antitrust
laws. Thus, it is very difficult to achieve genuine economies of scale if large
platforms are prohibited ex ante, instead of being reined in ex post where
appropriate. On this score, the EU is vulnerable to players from other regions
– witness the example of US video-on-demand provider Netflix in its competitive
battle with Germany's TV channels. The latter were recently banned from
creating their own platforms – the most recent of which was Germany's Gold, a
streaming portal planned by public broadcasters ARD and ZDF – due to antitrust
concerns.
Sixth, setting up a strict procurement law
is mandatory. When security-related public contracts are awarded, all providers
should be obliged to declare in advance that they are not bound by law or
contract to disclose confidential data to third parties (in a "no
spy" clause). Just how important this criterion should be to public
procurement processes is evident not only from the recent NSA affair, but from
as far back as the Patriot Act in 2001.
Seventh, creating a secure space for data
transmission is a must. Telephone and internet traffic within the Schengen area
should not leave this area. A secure space for routing could curb the
third-party surveillance of communications and strengthen Europe as a location
for data. As things stand, it is almost impossible for telecommunications
players in Europe to know what route their e-mails and data packets take as they
circumnavigate the globe, nor whether transit countries mirror or store their
communications.
Eighth, the service quality in networks has
to be guaranteed. Industry 4.0, cloud services, innovations in the internet of
things and in machine-to-machine (M2M) communications are not feasible without
fast and secure data networks. Critical applications in plant and machinery
need a guarantee of high-quality network connections at all times. Accordingly,
it is vital to be able to continue offering a high quality of service. Net
neutrality should be regulated at the European level and defined in such a way
that network operators have adequate freedom and incentives, and that
innovation is not hindered. The competitive opportunities for connected
manufacturing and products in the future are huge. Europe must take advantage
of them.
Stay tuned for one more post on policy recommendations for the digital agenda.
To learn more about the digital transformation of industry, click here.
To learn more about the digital transformation of industry, click here.
Wednesday 22 April 2015
Speed up! How German and European policy can foster the digitization of industry
First of a three-part series on policy recommendations for the digital agenda
You don't need to belittle the accomplishments
of Steve Jobs to be able to agree with Buchanan on one thing: From the internet
through to satellite communications, some of the essential enabling
technologies for digitization would never have come into being without
government funding. But the direct subsidization of technological projects is
not the only way for the state to seed innovation. The way governments set up a
regulatory framework gives them a huge amount of influence on what future technologies
will be developed where and how fast they will become established. Look no
further than the energy transition for proof of that.
The same goes for the digital transformation:
Governments and policymakers can be instrumental in pushing the development of enabling
technologies and enhancing the innovation capacity of companies. Owing to the substantially
more favorable financial, legal and institutional conditions in the US and also
in China, Europe's firms are at risk of falling behind in the digital race of
the regions, in spite of the strength of the continent's industrial base. For
the moment, at least, not one European internet firm has made it into the
global top 20.
To these ends, governments should help
Europe to pool its strengths and resources, improve the digital maturity of its
companies, prevent a form of standardization that undermines manufacturing
skills, encourage investment in the digital economy, and create points of
access and platforms that can be shared by companies, research institutions and
other organizations.
Pooling
strengths and resources. Germany and Europe have no
lack of associations and platforms to discuss the digital transformation. The Federal
Government of Germany, for example, has come up with several industry-wide
strategies to promote digitization. A Smart Networking Strategy is currently
being drawn up for the Digital Agenda, the focal point of these efforts. The
aim is to integrate cross-industry activities in an overall concept, the
cornerstones of which were unveiled at the CeBIT trade show in spring 2014. Further
projects and initiatives encompass Die neue Hightech-Strategie (The New
High-Tech Strategy), Zukunftsprojekt Industrie 4.0 (Future Project Industry
4.0) or IKT 2020 (ICT 2020).
At the EU level, a whole range of
additional strategies and actions can be listed – first and foremost Horizon
2020, but also programs focused on specific areas. The latter include ITEA for
software innovations and Artemis for cyber-physical systems.
Systematically bundling these initiatives
and focusing them on a series of cross-industry objectives would appear
necessary to make them more efficient and effective. Two important steps would
be:
- To define a shared vision,
common objectives and the most important areas of action in a digital
transformation charter for industry- To coordinate all ongoing and planned initiatives via a single project office
The National IT Summit that the German government
is currently developing and refocusing in line with the seven areas of action
laid out in its Digital Agenda could play a pioneering role in bundling the
country's digital activities. Current efforts by the Fraunhofer Society,
industry and the German government to create an Industrial Data Consortium are
an important and proper approach to bundling and coordinating efforts and
resources at least at the national level. Further steps must nevertheless
follow.
Stay tuned for two more posts on policy recommendations for the digital agenda.
To learn more about the digital transformation of industry, click here.Stay tuned for two more posts on policy recommendations for the digital agenda.
Wednesday 25 March 2015
Digitization of Industry now in full force
The digital transformation of industry will
cause fundamental structural changes for whole industrial branches. This
process will take place in waves, which will hit the different branches in
various ways and intensities and may change them from the ground up. Following
the first wave, the automotive and logistics industries are already in a
far-reaching shifting process. The second, marginally weaker wave will trigger
upheavals in the medical technology, electrical engineering, mechanical and
plant engineering and energy systems industries. The third wave of digitization
will hit the chemicals and aerospace industries, albeit more gently. European
companies therefore have to act fast and develop a more profound understanding
of what the digital transformation means and come up with new and sustainable
business models.
The study "The
digital transformation of industry" produced by Roland Berger Strategy
Consultants in collaboration with the Bundesverband der Deutschen Industrie (BDI),
examines the changes to value chains caused by new data, interconnectedness,
automation and digital customer interfaces based on the example of German
market leaders. The study represents the first extensive examination of the
causes of digitization and quantifies the overall effect.
Key
findings of the study
Among the key findings, the study presents
both positive and negative scenarios. In a positive scenario Europe has the
potential to create an additional value of EUR 1.25 trillion until 2025. If digital
transformation will not be turned to Europe's advantage, the continent stands
to lose as much as EUR 605 billion in the same period. The European
Commission's goals under the Europe 2020 strategy to raise the share of
industry in Europe from 16% to 20% by 2020 would clearly not be achievable in
the negative scenario.
These radical changes open up new
opportunities for the existing market players as well as for non-industry
players such as those in the information technology sector. Established firms and
industry leaders could quickly fall behind as a result. Market players from
outside the industry who possess a high level of digitization expertise could
come in and replace them in lucrative parts of the value chain.
Recommendations
for Europe's future industry
Companies need a comprehensive
understanding of the new value-added potential afforded by digitization and how
it can be utilized. Not only efficiency and costs have to be improved; and
optimized new business models will also have to be created.
Europe needs a counterweight to the
industrial Internet Consortium dominated by the United States. Therefore
businesses and European governments must commit themselves and define common
standards that accommodate the strengths of the German and the European
industries.
The success of digital transformation depends
on the installation of no-gaps broadband networks. Simultaneously, regulatory steps
must enable the high- quality of service for mission-critical applications.
Europe needs an effective and powerful infrastructure as a backbone if the
companies want to stay competitive in the long run.
If Europe wants to implement the digital
transformation of industry, successful collaborative action is needed. It must
rigorously focus its investment programs on digital transformation,
re-establish its own information and communications technology competence and
foster a virtual digital valley as a counterpart to existing digital centers in
the US and in Asia. Initiatives such as Terra
Numerata™ from Roland Berger Strategy Consultants can help to improve the way
the digital transformation is coordinated in Europe.
To learn more about the digital
transformation of industry, click here.
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