Digital change is already impacting daily life in a variety of ways. People are using increasingly sophisticated smartphones and taking them everywhere they go. As a manufacturer of liquid crystals, which made the flat displays and brilliant images of smartphones possible in the first place, Merck KGaA, Darmstadt, Germany has played a defining role in this trend.
Nearly everyone in the industrialized world today (and not only there) is connected to mobile networks, using social media, and making purchases online. Today, I would like to discuss some strategies that help managers and employees as well as their companies to be successful.
“Industry 4.0” and “Work 4.0”
In the working world, digitalization also became a reality a long time ago. In companies today, employees communicate with their colleagues and clients by instant messaging, e-mail, intranet, video conferences, and social media. A tremendous flow of data – around the world, around the clock. And in many areas of production, fully automated processes have been the standard for years. Digitalization has thus already permeated many areas of our lives, so it’s really no wonder that “Industry 4.0” has become a topic everyone is talking about. Yet it polarizes people – particularly when it comes to the effects it has on people, their work and work environments, defined as “Work 4.0”. Some complain that German companies are failing to wake up to the massive changes of the digital revolution. Others fear that human beings may become superfluous as a source of labor.
Even though we have not arrived at a uniform definition yet, this much is clear: Digital transformation will continue to change the working world in many areas within companies – from procurement to production, logistics, human resources and finance, all the way to marketing and customer service – at an even faster pace and more profoundly than it has so far. Together with their employees, companies must tackle this challenge. Merck KGaA, Darmstadt, Germany has begun the process with enthusiasm and optimism.
“With our unique combination of highly specialized bio-pharmaceuticals, life science and materials businesses, Merck KGaA, Darmstadt, Germany is in a position today to offer solutions to support global mega-trends such as healthcare and digitalization.”
A digital strategy that fits the company
To develop and implement a sophisticated digitalization strategy, it is vital to take the company’s unique structure and culture into account. From the very beginning, we have combined tradition with innovation: We are the world’s oldest pharmaceutical and chemical company. In 2018, Merck KGaA, Darmstadt, Germany will be celebrating its 350th anniversary. The founding family remains the majority owner of the publicly listed corporate group. At the same time, we are a leading global science and technology company today.
More than 50,000 employees in 66 countries work on advanced technologies that improve quality of life in numerous ways. We operate in healthcare, life science and performance materials. Healthcare offers prescription medicines for diseases such as cancer, fertility treatments, and over-the-counter pharmaceuticals to treat colds, alleviate pain, and promote health and wellness. The Life Science business sector carries out research for researchers: Merck KGaA, Darmstadt, Germany equips scientists with the numerous laboratory materials, technologies and services that they need for their work. This support allows the global scientific community to master substantial challenges and improve access to healthcare solutions. And Performance Materials develops specialty chemicals for specialty needs – from liquid crystals for displays, to effect pigments for coatings and cosmetics, to high-tech materials for the production of integrated circuits. With our unique combination of highly specialized bio-pharmaceuticals, life science and materials businesses, Merck KGaA, Darmstadt, Germany is in a position today to offer solutions to support global mega-trends such as healthcare and digitalization.
Employees as problem-solvers
And as a result of a sound strategy with a long-term orientation, we are achieving sustainable profitable growth. In 2016, we generated sales of € 15 billion and earnings before interest, taxes, depreciation and amortization of € 4.5 billion As a highly innovative company, Merck KGaA, Darmstadt, Germany continually invests in research and development – a total of € 2 billion in 2016 alone. Offering fascinating tasks and creative scope for new ideas, Merck KGaA, Darmstadt, Germany enjoys a reputation as an attractive employer. Together with our employees and social partners, we are assessing and exploiting the potential of digitalization in all business sectors and all areas of activity. We are enabling our employees to seize the opportunities and meet the challenges of digitalization, to live out innovation, and to actively help shape the changes in the pharmaceutical and chemical industries together with their employer. To this end, we are creating the necessary awareness and establishing a working environment that does justice to the digitized world and in which our employees, as problem-solvers, are the focus.
Learning, corporate culture, collaboration
We promote life-long learning, we are transforming our leadership culture, and we are supporting new forms of collaboration that give our employees the necessary responsibility and scope to act. Specifically:
- Life-long learning: Digital technologies offer endless possibilities. We introduce employees to these groundbreaking trends and train them in the skills they need. Old professions are fading away, new ones are emerging, and only through advanced training can employees successfully rise to this challenge. The basic goal is to enable employees to make the best of their respective opportunities and to creatively develop new ideas.
- Management culture/leadership: In the World of Work 4.0, classic hierarchies are less likely to lead to success. Managers are no longer the highest-ranking experts, but rather are responsible for creating an environment in which employees can work independently. As a consequence, employees have a greater degree of responsibility – which is an opportunity and a challenge at the same time. Complex tasks are handled more independently at team level. This calls for a more entrepreneurial approach at all levels.
- Collaboration: Digitalization enables dialogue with anyone in the world, at any time. This offers much greater scope for teamwork and increases employee commitment. The challenge here will be to minimize the stress caused by constant availability. Promoting dialogue across disciplines and collaboration across all areas of a company – and beyond – has become a core task of executive management.
That’s how we approach the digital change at Merck KGaA, Darmstadt, Germany and how we prepare our employees for it. It’s all about empowering our people – that’s also why I chose the competence “be empowering” from our competency model for this post. I’m curious to hear your perspectives. How do you approach the digital change in your companies? I’m looking forward to your comments and Statements.