Michael Otto, Chairman of the Supervisory Board at Otto Group, as Distinguished Guest Online at the Entrepreneurial School®.
Prof. Dr. Michael Otto is one of the most successful German entrepreneurs of our time. At the age of 28, he initially joined his father's company in Hamburg as a member of the Executive Board in the textile purchasing department and 10 years later became Chairman of the Executive Board. As early as the 1990s, in addition to the catalog business and over-the-counter retailing, he gradually expanded the area of e-commerce, thus becoming a pioneer of the multichannel strategy.
But how do values evolve during the transformation of a family business into a globally active, future-oriented digital company? With 123 companies in more than 30 countries, the Otto Group is now a global retail and services group with more than 49,000 employees and annual revenues of 15 billion euros. According to Michael Otto, it is therefore particularly important to bear the responsibility for sustainable economic activity. Digital transformation is more than just the introduction of digital technologies or new business models; it also requires a cultural change in which the common mindset must be right.
It is essential to keep up with the enormous pace of digital developments, because "in the future, you will only be able to survive through increased agility. This means moving away from top-down and order control towards a genuinely delegating responsibility to the team, which makes its own decisions, develops solutions and implements them. The manager should take on the role of a coach, says Otto, because unlike in the past, the specific know-how now lies with the qualified employees: "You have to be prepared to admit mistakes and then correct them quickly."
However, the principle of value-oriented sustainability is not only reflected in the Otto Group's culture; environmental protection was declared a corporate goal at a very early stage. At that time, the environment still perceived it as exotic, but revised production chains and audits have long been elements of the common environmental and social standards within the group. Various foundations, through which CO2 emissions and water consumption can be reduced and thus self-imposed sustainability goals are achieved, are also part of Otto's values, as are school projects and women's empowerment in the production countries. For Michael Otto, one thing is certain: "A company can only be successful in the long term if it has clear values and practices them credibly, because consumers recognize greenwashing.”
This also includes involving employees, because they should be able to identify with a company and share its values. In the process of communicating values it is essential to make sure that sustainable management can first be experienced before defining a code of ethics, because employees must be able to see and feel the attitude. "The values must be the DNA of the company," says Michael Otto, who also recommends that other large corporations set up an academy for this purpose with further and advanced training courses.
Ultimately, however, the definition and exercise of corporate values lies at the management level, and for this to work, managers should be able to think strategically, clearly define goals, but also, conversely, allow employees to work independently and try out new organizational methods - the keyword being business resilience. With regard to a certain uncertainty factor that remains with attempts at adaptation, Michael Otto states: "If someone is afraid of making mistakes, they should not become an entrepreneur. The fact that many decisions are also wrong decisions is part of life."