Today, I am very excited to meet Mirko Lehmann CEO and Peter Anderegg CFO of Innovative Sensor Technology IST AG. Founded in 1991, IST AG is headquartered in Ebnat-Kappel, Switzerland (canton St. Gallen), in the mountainous region of Toggenburg. It is a hidden technology champion - a globally present leading sensor specialist with around 400 employees. In 2018, after a rapid growth period the management identified agile collaboration across departments and locations as a strategic need for further innovation and growth. It was decided to partner with Human Facts in an enterprise-wide initiative* to define, discuss, strengthen and anchor “collaborative leadership” as a company culture.
Mirko: As a result of our extraordinary growth in recent years, our products and production processes have become increasingly complex. Not only have we grown in size and complexity, the need for coordination and collaboration also increased. This can no longer simply be handled informally between “office doors”, it must be organized. On the personnel side, increasing size comes along with an increasingly diverse workforce, with different backgrounds, characters and lengths of service, etc., who needs to be brought together. We have, of course, also sent our managers on individual management training courses. However, we had the impression that we needed to work out leadership guidelines collectively and principles that are valid for all to anchor a culture of collaborationas a key strategic factor.
Peter: I would like to add that our company growth has caused that the departments have grown as well. This also led to a kind of departmental thinking. We therefore focused the initiative on collaboration between departments in order to tear down the “fences” that had begun to form.
Eva: Within the framework of your leadership initiative, you successfully discussed the strategy, processes and principles of collaboration together over a period of about 12 months, and for most parts developed it in a co-creative manner. What did you find most daunting at the beginning? What made you take the leap anyway?
Mirko: To be honest, I am generally skeptical about consultants, because most of the consultants I have met were not able to co-develop solutions that truly fit the company. But as soon as I have the feeling that someone “fits”, can empathize and is willing to jointly develop company-specific solutions, I found the idea of including an “external view” helpful.
My greatest concern was that this idea of co-creativity would not really work with our managers.
Peter: That it would remain more of a one-sided top-down initiative, which is then commented with “the management is dissatisfied and wants something new now”. Until the initiative we experienced indeed our management meetings to be rather one-sided. In other words, while we provided information, we practically never received any questions or feedback. So initially we did not know what we can say with certainty today after the initiative: We are glad that we can count on an active and critical management, which is decisive for our further development.
Eva: When was the moment when you were certain and were able to say to yourself: “Yes, it’s good that we started this”? Was there a key experience?
Mirko: A key moment for me was the first management workshop and the listening survey we conducted with all managers in advance.
That’s when I realized that the people want to participate actively, and it was also good to hear what they appreciate.
The management workshop strengthened me insofar as we were able to work together very constructively, although there were and always are conflicts in such bodies. Especially during the joint development of our new value proposition, I experienced an energy that encouraged me to continue.
Peter: For me it was also the first workshop. Already the first day of the workshop and the results we were able to achieve made me feel very positive. The second workshop together with the managers confirmed this again. It was the first time that we all pulled together in a co-creative manner, and that made quite a difference to our dialogue quality. We received extremely positive feedback from all participants.
Eva: How did you manage to get techies interested in a dialog about “soft factors”? Was it difficult?
Peter: Not at all. In fact, we didn’t have to convince people at all actually. On the contrary, we felt a need to facilitate the social part of our work by bringing it into focus.
Maybe that’s also because social interaction has always been an important success factor in our company.
Mirko: Particularly when it comes to technological issues, there are always endless possibilities as to which direction you ultimately take it. I therefore believe that, in general, when dealing with complex issues that can no longer be solved on one’s own, you always inevitably need pronounced soft skills and a collaborative leadership culture.
Eva: Looking back now, can you sum up what you achieved in a single sentence?
Mirko: We have reached a common understanding among the managers about the key management elements, such as strategy, processes and a culture of collaboration – even though we have not yet finished, of course. And perhaps these issues will always remain fluent in our times.
Peter: What we have certainly achieved is a strengthening of our common identity. This is something we didn’t experienced before because of the very rapid structural growth seen in the different units all over the world. However, what we have not yet achieved is the same level of leadership in terms of competence and quality across all units. There are still differences that we will need to work on individually.
People want to participate actively and it’s also good to hear what they appreciate.
Eva: What surprised you most? Were there any unexpected side effects or surprises that you did not expect? Maybe also unintentional ones?
Mirko: I didn’t expect to see the common spirit which Peter described evolving over such a short period of time. Of course, such a strengthened collaborative spirit has also raised the expectation to have a say in strategic decisions. You have to be really careful to pick up on this.
It has to be clear from the beginning that thinking together is not the same as deciding together and where the limits are.
Eva: With this initiative you invested massively in your leadership capacity with this initiative. When was this investment successful? How do you expect these effects to manifest themselves financially, and when?
Peter: I don’t expect to see a financial impact right away. That wasn’t the idea either. We’re already seeing it with new projects or with existing problems that people are working together much more efficiently, smoothly and quickly. With that we can achieve a “time-to-market” advantage. In the end, this will also be reflected financially. But there are so many other factors that also play a role, including external ones – as we can see right now in the Covid-19 pandemic crisis – trying to monetize this directly will not be reasonable.
Eva: Today, you – like many other companies – are affected by the COVID-19 pandemic crisis. This is a particularly difficult condition for good collaboration. What is your experience so far? Any initial lessons learned?
Mirko: Leadership – whether in companies or in politics – is currently facing a triple challenge: Firstly, there is no real goal anymore. Secondly, this time – being different from the financial crisis in 2009 – we are threatened both professionally and privately. In other words, existentially and in terms of health as a person and family. And thirdly, that nobody knows how long it will last. Today, any lack of trust in management will indeed make life difficult. In other words, those who have always led on a basis of trust, who have always relied on good collaboration instead of competition, can now draw on this in these times of crisis.
Eva: Do you feel that you can now benefit from your previous investment in this crisis situation? Is the strengthened collaborative leadership paying off?
Peter: I can only reiterate what Mirko said. In this crisis situation, where we have to work in a very decentralized way, nothing works without trust.
It seems that having just invested in a culture of trust and collaborative leadership turns out to be a huge advantage right now in times of crisis. It’s definitely paying off.
Mirko: Yes, definitely. The initiative has enabled us to kind of press the reset button. What do I mean by that? The same rules apply to everyone, and of course it is enormously helpful in the current crisis to have established such a common leadership and collaboration guideline. Nevertheless, it is undoubtedly difficult to get people together. We reacted immediately and invested in video conferencing software so that we can at least see each other. The most difficult thing is the balancing act of protecting employees on the one hand and continuing to produce, sell and develop on the other. In our company, it has proved to be a good idea not only to keep production running – as in other companies – but to have part of the administration come to work, too. Our collaborative spirit is expressed here as well and has proven its worth.
What have you personally taken away from this very intense dialog with your managers for yourself, for your personal collaboration as CEO and CFO or for your life?
Peter: We have always had a good and close collaboration. But personally, of course, I learned a great deal from colleagues in the course of the initiative, which I did not know before. I increased my understanding as to how and why my colleagues act and think the way they do. This is a great privilege and advantage for a better and more transparent communication.
Mirko: Yes, same here. The collaboration with Peter has always been good. Perhaps this has also taught us to openly address more critical issues. At the third workshop, I was personally most unsure in advance how it would turn out with 70 people in the room. Accordingly, it was a real highlight to sense that most people really want to participate, are motivated and that we as the management are not perceived as negatively as we might have thought at times.
Eva: What can I, as a customer, development partner or prospective applicant, expect from your collaboration culture?
Peter: We have introduced a culture that knows practically no hierarchical levels and departmental boundaries. For customers this means that we are very agile, flexible and unbureaucratic when it comes to project ideas and individual customer demands and change requests. For employees, it means that they are required to take responsibility and initiative, and that they should not have any reservations.
Those who have always relied on trust and good collaboration instead of competition, can now draw on this in these times of crisis.
Eva: What is the crucial thing to bear in mind when a company wants to systematically strengthen the collaboration among its managers?
Mirko: I think there are three points that need to be considered. Firstly, that you have a plan as we did and make the effort to bring everyone on board and work out parts of it co-creatively, even if it takes time. This is the only way to encourage and demand shared responsibility from the entire management team. Secondly, at the same time you should have a very clear idea of where the limits are, i.e. which decisions should remain management decisions, such as strategy and structure, and communicate this clearly. And thirdly, the timing needs to be right. When we started, we actually had no serious problems or substantial difficulties. We were therefore able to approach this from a position of strength. That would no longer have been possible in an existence-threatening situation like the COVID-19 pandemic.
Peter: It showed me that when you hire help from the outside, they have to fit in. We are, for example, a technical science-oriented company, but at the same time very down to earth. Not everyone would fit in well here. I would make sure that it is someone who can empathize and is willing to facilitate the path that fits the company, like in our case.
Thank you, for your time. We wish you all the best for the future! Stay safe and healthy.
*) Human Facts AG assisted IST AG from 2018 to 2019 to anchor their collaborative leadership culture to support their continuous innovation and growth path. The process started with a corporate listening analysis including the Collaborative Leadership Assessment (CLA), followed by three workshops with the first three layers of leaders. During those workshops collaborative leadership principles were co-created and implemented. They make now part of the annual individual goal setting and evaluation process of managers.