Family Business

"Every transformation is, at its core, a cultural one"

Dr. Maximilian Lude hält einen Vortrag auf einer Veranstaltung.

Dr Maximilian Lude is a researcher, co-creator and speaker. He focuses on securing the future of family businesses in particular – in times of rapid change. With his team at philoneos GmbH, he advises companies on innovation and transformation processes. Maximilian Lude is also Professor of Innovation & Strategy at Tomorrow University of Applied Science.

Dr Lude, as a creative thinker and innovation consultant, what are your current thoughts on the packaging industry?

As a creative thinker, I see the packaging industry as extremely important, diverse and multifaceted. One that is underestimated in the public perception. Packaging plays a critical role not only in storing and transporting products securely and efficiently, but also in creating a positive brand experience for customers. Not to mention the preservation of important foods and pharmaceuticals. The wealth of facets also represents a challenge in terms of focus in R&D and innovation. Different customer groups, incredibly diverse applications, regulations and political misinterpretations are leading to new packaging regulations that work against the circular economy instead of promoting it. You can tell from my answer – I’m somewhere on the spectrum between optimistic and defiant.

Is the at times costly or multi-packaging of consumer products still a business model for the future? Why or why not?

You may not want to hear this right now, but it depends. Current trends show that consumers value sustainable and carefully thought-out product packaging. I think there is a lot of potential for innovation here, driven by the packaging industry and along the entire value chain. Just think of the second uses of packaging – as already being applied to some consumer products. Extending the actual packaged product experience via the packaging should be the industry’s guiding principle.

Furthermore – and this isn’t news to anyone – sustainability thinking should not only be taken to heart authentically and honestly, but also clearly communicated. Hence my vague answer ‘it depends’. Greenwashing through half-baked sustainability claims, which everyone can see through, can quickly tip consumer trust and confidence. So, taking the consumer along on the journey and communicating intelligently why multiple packaging is used is certainly a first approach here.

What are the specific opportunities for family businesses like Schubert?

Good question. I’ll try to be brief and not write a novel here, which would actually do justice to the question. The opportunities for family businesses like Schubert are manifold. First of all, it is important to point out the long-term decision-making horizon of the entrepreneurial family. As a rule, it isn’t a matter of quarterly goals, but of intergenerational objectives that are motivated by much more than just financial considerations. There is talk of strong values and “enkelfähigkeit”, a German term increasingly used in many world markets to express behaving in a manner compatible with multi-generational prosperity. This opens up opportunities for innovation, as it often calls for staying power.

It isn’t uncommon for family businesses to look back on a long tradition – as is certainly the case with Schubert. This can be a real competitive advantage when it comes to innovation. The expertise and industry know-how, which often spans decades and generations, can be profitably transferred into the future. In the scientific field, there are publications referring to “Innovation through Tradition (ITT)”, which show that innovations can be created in family businesses through the reinterpretation of existing knowledge. And if we are entirely honest, there would be no tradition at Schubert if there had not always been constant and continuous innovation.

The difference between today and yesterday is the speed at which our world and, above all, technologies are advancing. This appears to represent a breach with the characteristics of family businesses that have been listed so far. At first glance, a long-term orientation, intergenerationality and perseverance often seem to contradict the notion of speed. But only at first glance. And finally, with all the opportunities for innovation, we should also talk about what is arguably the biggest challenge in all sectors: the shortage of employees. Here, too, I see clear opportunities for family businesses in the future. But only if they embrace new ways of working and a modified skillset. These companies already possess the basic prerequisites for being an employer of the future – with solid values and a strong appreciation of valuable work.

What is your advice for the next generation of business owners in an industry that may be undergoing a major transformation in the next few years?

I don’t generally like to give universal advice. The experts in the sector know better than anyone in which direction they will be heading in the future. And that in itself may lead to one piece of advice: Every transformation is, at its core, a cultural one. So take your teams with you on the journey and turn them into ‘intrapreneurs’, i.e. employees who think entrepreneurially. In my view, this may well be the most important skill of the future.

How should the next generation approach this? What role changes in the company do you see in the direction of more efficient value creation in today’s VUCA environment?

I strongly believe that active involvement of employees in innovation activities and the deliberate creation of horizontal interaction in vertical organisations contribute to fostering an entrepreneurial mindset. Moreover, it isn’t only the roles within a company are shifting, but also the role of the company itself. More than ever, companies have to live and breathe a certain duality or ambidexterity. In other words, a balance between exploitation, i.e. the constant evolution of the core business, and exploration, i.e. the ongoing, systematic search for new business opportunities. The exact shaping of this ambidexterity has to be decided on individually for each company and adapted to the prevailing culture and goals: from outsourced exploration units – such as the Lufthansa Innovation Hub, for instance – to ‘contextual’ ambidexterity, i.e. the duality between day-to-day business and innovation among all employees.

A further aspect of adapting to the VUCA (Volatility, Uncertainty, Complexity, Ambiguity) world you mentioned is a fundamental shift in the employer-employee relationship: moving away from blanket, one-size-fits-all offers with nine-to-five days and 38-hour-weeks towards personalised employment contracts, adapted to the employee’s individual preferences. We are all aware of the challenges this poses for the area of People & Culture (formerly HR).

What role do disruptive topics such as digitalisation and sustainability play in this context?

Digitalisation shouldn’t be considered separately here but has to become a standard so-called ‘hygiene factor’ in every medium-sized company. Digital transformation – essentially a cultural issue as described earlier – is often used as a buzzword for all change initiatives. But let’s be clear. At the beginning, large investments need to be made in the digitalisation of technical infrastructure (digitisation), with the ultimate goal of process innovation. This is followed by interface digitalisation with the objective of digital product and service innovation – and only then can we talk about digital transformation, with a focus on digital business models and the objective of long-term competitive advantages (Soluk & Kammerlander, 2020).

Some companies are similarly insensitive when it comes to promoting the concept of sustainability. Not so at Schubert. Only very few companies talk about the underlying multiplicity of sustainability in the areas of ecology and social issues. Both are decisive fields of activity for medium-sized companies. But where does it begin and where does it end? Many companies draw on the SDGs (sustainable development goals) published by the UN and create action plans based on them. Others are already taking the important step of preparing materiality analyses, which will be mandatory for many companies as of 2024 as part of their sustainability reporting.

Thank you very much for this interview!

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(Left in the picture: The company Hofmann Blechbearbeitung)