Growth with digital transformation
The term was coined by politicians and is not precisely defined. My understanding of Industry 4.0 is the digital transformation of medium-sized businesses. Specifically, this involves the systematic analysis of the value chain for digitization potential — on the one hand, this results in productivity increases and, on the other hand, new digital business models can be developed that also provide a competitive advantage for the company. I don’t know of any company that is not affected by this trend — certainly to varying degrees depending on the industry. The media industry, for example, clearly shows that a digital transformation is urgently needed, but only a few have really begun to do this consistently. We recently acquired the established media consultancy Schmidt Grund Partner to support publishers in particular in their digital transformation — the need here is really high.
Each of our projects is tailored to the client’s needs, but the 3‑step approach is similar: analysis — concept — implementation. In the analysis phase, we take a close look at the company, interview many employees, and question the status quo. On this basis, we develop a suitable strategy with our client — often it is a realignment, a refocusing on the core competencies. This is what we did at posterXXL, for example, refocusing the brand, then adapting structures and processes and making them more efficient, and introducing an end-to-end target system. As a result of this and consistent management, posterXXL was able to double its sales and increase its EBITDA eightfold within 1 year (please check the figures). From this strong position, the company was an attractive target and was just acquired by PhotoBox Group. That we could contribute to this success story, we are of course pleased :)
The key question that traditional companies need to ask themselves is: what is my DNA and how do I transfer it to the digital world? Specifically: What is our digital USP? This is not an easy question to answer — it requires an analysis of the market environment, not only the known competition, but also the as yet unknown competition. These are small (still unimpressive and unprofitable) startups with innovative, even disruptive, business models that won’t be big for a few years, but as an established big-tanker, I need to have these new speedboats on my radar. Then I have to search my own processes for digital potential, turn over every stone, question every procedure in order to reposition myself for the digital future. And once the concept is in place, the real challenge begins: change management. Management now has the task of living the new direction, bringing the new mindset into the corporate culture, and taking all employees with them on this journey.
Of course, investors are asking the same question for your portfolio: should we hire someone to screen our holdings (across all industries) for their digitization potential and drive digital transformation? Or do we prefer to work with an external partner who puts together the right and highly experienced team for each company? Many investors choose to go this route with us in order to be able to act in a targeted, specific and fast manner.