fröscher is a company with a proud tradition: Part of the famous “German Mittelstand”, the manufacturer looks back on almost 100 years of furniture building history; some of the current employees have been working here for over 40 years.
But in our age of digital transformation their experience and know-how accumulated over decades suddenly didn’t apply to the changing market realities anymore: “As a former mass producer of off-the-shelf products we had to completely rethink the way we do business”, says Willi Münch, fröscher’s CFO.
The company faced a challenge western industries know all too well – standardized and mass produced solutions have become uneconomical due to advanced megatrends in business and society:
- Customers’ purchasing behaviors and the power structures between buyer and supplier have shifted. There’s less “I guess I’ll pick something from the catalogue” and more “I demand a solution tailored to my needs”.
- Digitalization has made it simple for everyone to buy from virtually any supplier around the globe. As a result, Eastern European (and other low-wage countries’) competitors’ operating costs allowed for massive undercutting of the prices domestic manufacturers like fröscher were used to. Cost-efficient sourcing on a global scale was once the privilege of large enterprises with significant resources dedicated to supply chain management. Today, widespread eCommerce availability has made it a no-brainer for SMEs and the B2C sector as well.
Accepting the changing realities and acknowledging the need to respond – an impressive feat in itself, considering how many others fail to do so – management chose to adapt. fröscher integrated with a different company, specializing in office communication technology and now designs and develops custom-made office furniture that accommodates the realities of modern office communication: Tabletops seamlessly integrate with touch screens and a range of other media displays; meeting participants can literally bring their ideas to the table by means of smartphones or laptops and the wireless user experiences they’re familiar with.
The real benefit of fröscher’s high-tech competence is the ability to address its customers’ individual workplace needs. The company works close with their clients to identify what problem their new meeting tables are actually supposed to solve: Is it about better communication and free exchange of ideas? Easier virtual attendance for participants at remote locations? More flexibility in the use of office space? fröscher reflects their clients’ wishes in any given context and is happy to apply their know-how to provide modern solutions, often suggesting optimizations that clients might not think about when ordering furniture:
“You can’t expect people to excel in sharing information and collaborating in an office setting – and then have them puzzle with cables and adapters while they’re otherwise used to simply AirDrop any info they want to their peers”, Willi told session participants at a recent conference by New Work think tank intrinsify!me that was hosted in fröscher’s showroom.
The connection to New Work is no accident: fröscher realized early on that the necessary reinvention of its business model could not be supported by decades-old structures and processes. When the managers visited a neighboring company that had had good experience with Agile methodologies they decided to give it a go: Together with an external consultant the company embarked on a journey to reinvent its inner workings in 2016.
Some of the best results so far can be seen in the pre-planning/requirements management mentioned above: The thorough analysis of actual client needs allows for more customer-oriented planning of solution delivery – and for a shrinking gap between pre-project and post-project calculations. To facilitate this, fröscher adopted and adapted different practices from the Scrum playbook; turning their account managers into product owners and internal client representatives. “Thank god we didn’t implement a full textbook version of Scrum – it would never have worked in this scenario”, Willi stresses the importance of tailoring organizational redesign to its purpose and real-life conditions.
fröscher conducted a series of workshops to develop a shared vision for the company’s future and to foster inter-departmental alignment. “I remember one workshop specifically”, says Fabian Sackmann, a recent business studies graduate who wrote his final thesis on the company’s transformation: “The playful approaches to collaboration and communication brought very different people together – including people who have had difficulties to overcome obstacles such as language barriers in the past.”
Today, fröscher is still innovating – and Willi openly admits that the change process is sometimes a struggle, too: How should modern management respond to situations where self-governed teams can’t reach a decision – but the customer’s deadline is only days away? How do managers avoid slipping back into command & control behavior when the daily standup reveals a conflict – but not a solution? And how do you treat disappointed long-time employees who used to take pride in building hundreds of identical chairs when you’re suddenly moving from one project to another? Answers that work in a real-life setting are not always easy to find. To quote a participant’s verdict from a recent retrospective: “We’ve come really far – and have achieved maybe 5 % of our goal.”
As is often the case with large-scale projects, sometimes it’s a challenge to apply the big picture stuff to your daily business – a situation in which the Kaizen approach can help make change actionable. Still, this particular journey is already considered a success: fröscher has generated more than enough new business to last at least until the end of the year – and it has won new clients convinced by the company’s integrated approach to office furnishing. The new ways of doing things are starting to feel familiar to the senior staff and all of the company’s current apprentices were just rewarded for outstanding results in their interim examinations.
Looking at how the competitive landscape continues to evolve and how competitors have done, it seems clear that fröscher’s transformation is the right decision for our time – and certainly for the future.