Global survey (G20 countries):
German companies recognize pressure to change, however, they address it less decisively in an international comparison
Current survey: Not even one in three German companies (29 percent) believe that technological innovation and integration are among their top priorities for the next twelve months. By comparison, 41 percent of the companies surveyed worldwide stated this, and 43 percent in the EU. German companies thus occupy an outsider's role. This is the result of the study 'Resilience Barometer®: September 2021' by FTI Consulting, in which 2,869 decision-makers from companies in G20 countries were surveyed.
- Two-thirds (67 percent) of German companies see a need for action to realign their business model in order to become or remain competitive
- Only 32 percent of the German companies surveyed are actively addressing this issue, while almost a quarter is doing nothing
- 61 percent struggle with digitalization
Only 17 percent of the companies surveyed in Germany have additionally invested in research and development in the last twelve months – while worldwide 35 percent stated this, and 32 percent in the EU. Top priorities for German companies include: Increasing profits (48 percent), increasing sales (42 percent) and – by a significant margin – developing new markets (34 percent). Innovation and technology follow only in sixth place among the issues to be tackled vigorously over the next twelve months.
"As before, innovation and change are not a top priority for German companies," says Christian Säuberlich, member of the board of FTI-Andersch, the German management consultancy that focuses on restructuring and business transformation within the international FTI-Consulting group. "It is true that companies worldwide also voted profits, sales and new markets into the top three positions – but already after that, with a clear gap to the German assessment, comes innovation. International companies, but also competitors in the European market, seem to attach greater importance to innovation in order to achieve and sustain their overall objectives. In this survey, German companies again confirm their reputation for being wait-and-see and reactive rather than drivers of innovation."
Motivation for innovation based on long-term factors, but one in eight companies already report being directly affected by disruption
Asked about risks to their own business, only 21 percent of German companies say they fear technological disruption for their company or industry in the short term, i.e. within the next twelve months. However, only 26 percent of global companies have done so, and only 17 per cent of EU companies. Christian Säuberlich says: "In the short-term perspective, only a minority sees itself threatened, even if it is of a significant size. This illustrates that international competitors are giving higher priority to innovation and investing more in research and development, not only from a short-term risk perspective, but also in terms of exploiting opportunities in the long-term. This should give German companies a lot to think about, as it will threaten business models in the long term."
One in eight German companies (13 percent; international: 20 percent) stated that their own business model had already been overhauled in the past twelve months or that there were clear signs that this was imminent (10 percent; international: 20 percent)."This way you can quickly see yourself confronted with a crisis," says Christian Säuberlich. "We often meet companies that react too late to changes in restructuring projects because, for example, like some suppliers in the automotive industry, they are still pursuing a single-product strategy or, as stationary retailers, they have underestimated digitization for too long. This is currently also evident in the field of sustainability, among others. But when the financial resources finally run out, it is often almost too late for noticeable innovation. The cuts are then all the greater in order to work out a resilient perspective for the future again."
Today's opportunities are the best crisis prevention
The way companies approach a potential disruption of their own business model also differs significantly from the global approach. In Germany, only 32 percent of companies are proactively facing up to disruption, i.e. trying to shape it themselves – compared to 45 percent of companies worldwide and 43 percent of companies in the EU; 23 percent even stated that they did not care about the issue at all (international: 11 percent, EU: 12 percent).
What is striking is that the problem is already seen by the majority. More than two thirds (67 percent) of the German companies surveyed confirm that their business model will have to change significantly in order to remain competitive in the long term (cf. international: 80 percent, EU: 78 percent), 21 percent even consider this to be particularly necessary (cf. international: 37 percent, EU: 27 percent). When asked how they assess their own digitization efforts, 61 percent in Germany say they would struggle here.
Christian Säuberlich says: "Companies that see difficult times looming in our survey now need the determination to organize the necessary know-how and actively tackle the changes. So that crisis remains a possible scenario – but one that never materializes. Proactively addressing transformation is the best crisis prevention."
About the 'FTI Resilience Barometer®: September 2021':
FTI Consulting surveyed 2,869 decision-makers worldwide from companies with an annual turnover of mostly 100 million up to 3 billion USD about current trends and risks to their own business; 73 percent of respondents work for privately held companies, 27 percent for publicly traded companies.
The full research can be found here: https://ftiresiliencebarometer.com/
If you are interested in detailed German figures, please contact us directly.
FTI-Andersch is a management consultancy that supports its clients in the development and implementation of sustainable future/performance and restructuring concepts. FTI-Andersch actively supports companies that have to deal with operational or financial challenges – or want to align their business model, organisation and processes for the future at an early stage.
Our clients include in particular medium-sized companies and corporate groups that operate internationally. FTI-Andersch is part of the internationally active FTI Consulting Group (NYSE: FCN) with more than 6,400 employees.