01. December 2017
Start-up as a guarantee for success?
Dr. Christian von Boetticher on factors for the right choice for new investments
Dr. Christian von Boetticher is the Vice Chairman of BVE e.V – the Federation of German Food and Drink Industries. The Managing Director of food manufacturer Peter Kölln (Köllnflocken) is strongly supporting digital transformation in the medium-sized enterprise-influenced food industry. In the run-up to Farm & Food 2018, we spoke to him about the chances that could rise out of cooperation with startups.
Farm & Food: Our industry is strongly influenced by family-owned companies. How can these medium-sized enterprises develop a digital mindset to embrace digitisation?
Dr. Christian von Boetticher: The possibilities of digitisation are comparable to those of a revolution. Medium-sized nutrition product producers will thereby be able to communicate directly with their customers and consumers, as well as to find out more about their wishes, ideas and expectations.
Production companies will become direct solution providers for human demand. To analyze what that means for your own business model, you need to provide expert support – either as a staff position in your own company, by establishing a subsidiary, or in the form of external, long-term support.
Startups, as well as digital corporations like Google are counting on a ‘culture of errors’. How important is entrepreneurial courage at all levels of hierarchy to be successful these days?
I think it is very important. Medium-sized, family-owned businesses are mostly very strongly hierarchically designed. The boss also likes to decide on details. If you look at modern executive management in a corporation, there are mostly clearly allocated task fields under which the whole workforce organizes itself.
Higher ranking employees regularly correct decisions made by lower-tier staff if there is a fear of error. Now there are the changes to processes, technical innovation, as well as changes to communication possibilities, thanks to digitalization that is happening so quickly, that simply different organizational structures are required. There will need to be more interdisciplinary teams that are able to make decisions independently.
Steering will in the future be based predominantly on annual and monthly goals and inspection reports, but also lower-tier staff need more freedom to move with regards to the way in which they reach their goals. In doing so, errors will be made, but these will be acceptable because they serve the improvement of the system.
Can medium-sized enterprises further their digital competency by investing in startups? Which conditions need to be considered in doing so?
I think that they have to. Structures in medium-sized companies in the nutrition industry wont simply be able to adjust overnight to the changed requirements of digitalization. To create new business models, it is absolutely sensible to at least ALSO invest in startups that are working in the same business sector. This requires the provision of venture capital.
This is a type of investment that is relatively foreign to the more conservative calculating medium-sized company. The success-less credit of a part of an investment is currently not in the nature of the medium-sized businessman, but this mindset will have to assert itself more in the future.
You need several investments in different startups. You need to get used to the fact that not all of them will prevail. In the end, I can achieve the breakthrough with a startup operating successfully on the market. Venture capital is an important key word.
Why is the Farm & Food conference so important and what are you expecting from your participation?
Farm&Food tackles the topic of digitalization for the food market – in an industry in which this topic has really arrived as such. That probably has to do with the fact that still under 2% of revenue is via online retail, leading to many companies feeling more comfortable in the analog world. This perception is deceiving.
It is therefore extremely important now to discuss chances and risks in the industry and to have a look at which best practices exist. Networking, dialogue, exchange of experience, knowledge expansion regarding digitalization – these are the things that are absolutely necessary and which I hope for at Farm&Food 4.0.
What is the biggest challenge that companies have to confront considering the increase in digitalization?
For me it is definitely change management – the changing of processes and structures in your own company to seize the opportunities offered by digitalization.