Why you shouldn’t simply digitize now, but rather renew your business.

I have spoken to countless entrepreneurs over the past two weeks and am pleased to note that almost all of them have realized that digitalization must play an important role in the future. The reason for this realization is less pleasing; the measures ordered by the government have hit society and therefore the economy hard. A lot has been damaged, which is bad on the one hand, but also a unique opportunity to make business fit for the future in a short space of time. It is easier than ever to radically restructure, to radically improve.

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With all due respect

Perhaps you will reply to me now and say: we have to go back now, wait out the situation, save where we can, hibernate. And that everything is really, really bad. I think such an attitude is presumptuous, because in Europe, and especially in Switzerland, the state has provided us with an unparalleled windfall of money to ensure that, purely rationally, we lack nothing for the time being. The fact that this is possible is one of the great achievements of our society and we should be proud of it.

Elsewhere, for example in the USA, the measures mean complete bankruptcy for many people. Even in America’s middle class, it is surprisingly quickly a matter of survival when business and therefore jobs disappear.

We have it so good here that we should, pardon the expression, just shut up and concentrate on being grateful and making the best of it.

Existing business is collapsing, but it would probably have done so sooner or later anyway

In many places, the measures are causing existing business to collapse from one day to the next. As a result, businesses that are not directly affected by the measures are also affected. Often only gradually and the bail-out measures sometimes obscure the true extent of the damage.

This ensures that innovative, future-proof business models and outdated models that are not viable either way come under fire. It is sometimes difficult to distinguish one from the other.

However, it is precisely this distinction that is of crucial importance. Outdated business models that are not viable in the medium term will not come back to life even after the bail-out. For them, the government’s Covid-19 measures are euthanasia – even if they still receive life-prolonging treatment in the form of economic aid.

Fire accelerator crisis > Renewal accelerator crisis

In this sense, outdated business models were already on fire before the crisis. The crisis fuels this fire and thus creates space for renewal. This is not unlike a forest fire, for example. If we understand the process as accelerated renewal, many things become clearer to decide, even if they are not equally simple.

Don’t digitize your business, rebuild it with today’s technology

Whether you as an entrepreneur and decision-maker in this brand go under with your business model, so to speak, is therefore largely your decision. Often, and this is what makes the whole thing so difficult, it is not a conscious decision.

It becomes a conscious decision when you as the decision-maker realize that you always have options for action. We often operate within a defined framework and do not dare to consider alternative courses of action beyond this framework. And for many, this was not even necessary until now, as there was no need to leave the professional comfort zone.

The most obvious option for decision-makers and entrepreneurs is to renew outdated parts of the business.
It

is important not to make the mistake of seeing the digitalization of the outdated business model as a renewal.

Rather, the aim is to build a new, resounding business model with the help of the technology available today , taking into account the significant changes in customer behaviour. One that will work tomorrow and the day after tomorrow.

This puts you right where “real” entrepreneurship takes place. In the uncertainty, in the risk, in the “struggle” – but also in the new beginning. I am firmly convinced that good entrepreneurs see crises as opportunities and, after the initial low blows, use the situation to move forward.

Entrepreneurial risk

This is anything but risk-free and that is a good thing. I am following the discussion about the bail-outs of entrepreneurs and decision-makers with some concern. On a small or large scale, there is a good reason why entrepreneurs are excluded from social measures such as short-time working and partial unemployment benefits: the tax privileges we enjoy as entrepreneurs. I am a fan of earning a lot of money and paying little tax.

I would like to preserve that for us entrepreneurs. But this is only possible if we also take the risk and don’t demand all the other privileges of employees. Because you can’t have both: All the benefits and protection at the same time. You can’t be on short-time working and pay dividends. You can’t get free loans and lay off all your employees at the same time. Unfortunately, it’s technically possible, but it’s anti-social. More than ever, and I think this will become increasingly important in the future, entrepreneurs need to take on social responsibility (again).

This will not succeed if the profiles of entrepreneurs/companies and employees are blurred. Because in the end, everyone will only want to benefit.

The right time is now

In conversations with entrepreneurs, I have often heard that they want to wait for the right moment to restructure their business. Although we humans are good at putting off unpleasant things for the future, this is usually not particularly wise. There are actually only very few things where it really makes sense to put them off until later. Business renewal is not one of them. So the sooner you tackle it, the sooner your business will be transformed. So the time is now!