Speaking with the industry

Hope Generation Change: Digitization Boost from Younger Management

Will the next generation of contractors make the industry more digital?

One of the main reasons for digitization in construction companies in recent years has been the pandemic and the associated need to be able to work independently of location. 

Current studies show that, despite everything, this has not yet led to an alignment of the level of digitization with other industries. One driver of digitization and innovation that is mentioned more often in our interviews is the generational change that is gradually sweeping through construction companies. We talked about this with Niels Baldauf from Karl Wolf GmbH & Co. KG, who has now been working in the family business for just over two years. 

His father is the fourth generation to run the medium-sized family business, and Niels Baldauf has had power of attorney since 2021. As a career changer from the automotive industry, he had already gained experience in various corporations in project management and purchasing, then he was keen to move to a smaller, more agile company. Since he is also very interested in the construction sector, the family business was an obvious choice. 

Karl Wolf GmbH & Co. KG with 60 employees is active in the Unna area (NRW). Founded in 1908, the company can look back on over a century of experience in civil engineering and building construction. 

The entry 

Niels Baldauf has gradually taken over the civil engineering division, while his father Jens Baldauf continues to manage the building construction. Right at the start of his new job, he had to negotiate contracts that would run for several years. Niels Baldauf was able to draw directly on his experience in purchasing and controlling to negotiate the contract with the help of data. 

"I turned the entire contract, including the extensive specifications, completely upside down. I took our data to calculate all the positions exactly and was thus able to turn some adjusting screws. Of course, that was an advantage over other companies."

With this start and daily one-on-one meetings with his father on company- and construction-specific topics, Baldauf quickly found his way around the company. After the contracting process was successful, thanks in part to his approach, he began digitizing the accounting department. This enabled him to analyze and optimize processes and ensure that no knowledge was lost when employees left the company. 

"Our accountant retired this year and we took this as an opportunity to digitize our financial accounting with a year and a half's notice. Not only do you have to know all the processes exactly, but you also have to comply with legal regulations, so it took time."

The added value of digitizing this information is clear to Niels Baldauf: Invoices and delivery bills are available at the push of a button, and contracts no longer have to be searched for in the archive, which is time-consuming. Also, in order to have the possibility of evaluating collected data at all, it must be available digitally. The precise calculations that can be realized in this way create advantages over other companies, as became apparent during the contract negotiation described above. 

Interplay between experience already gained and the drive to innovate

As the son of the managing director, it's certainly not as easy as it sounds to move straight into a management position. In order to avoid the cliché of the successor who takes everything for granted, it was important for Niels Baldauf to quickly find a role in the company that suited him. As a career changer, he was aware that he didn't have much to contribute, especially in the area of construction. That's why, right from the start, he was keen to bring added value to the employees in his own way.

"Our company has been around for over 100 years, which means there's not that much the company can do wrong. The processes have grown so much over time and are well thought out. For me, the challenge is to position myself in the company by making changes that make sense for the company."

Niels Baldauf benefits greatly from his father's experience. He doesn't have to try things out first, but can always discuss new ideas first. His father knows the processes in the company like no other, as well as the market and, above all, the customers. This results in a combination of innovative drive and experience, which has already led to successful optimization of the company's processes. 

Also in view of the current market situation, with many construction companies where the succession is still unclear, the company has many opportunities. The competition that is breaking away holds the potential to gain market share. 

Digitization as part of the strategic alignment

Niels Baldauf's entry into the company has ensured more digitization in several areas. In addition to the application of digital project management tools, the company also deals with the topic of BIM. 

"The big companies are already in a good position. We are currently looking at how we can work with the partner companies. The important thing is to get the tradesmen involved. But at the moment, the first thing is to bring our architects and structural engineers together."

He is aware that BIM is becoming increasingly relevant, but also that there are currently more pressing issues, especially for medium-sized companies. In order to be well positioned for the future of construction, Baldauf is working on the topic of robotics. The company's vision for the future is the use of 3D printers as well as robots that can set masonry blocks. In his eyes, this is a very exciting area for new construction. 

In all these things, Baldauf benefits from his experience in other companies. He is convinced that it is important not to start your career directly in the family business: 

"If you've been in another company before, you have a completely different view of things. Even from the automotive industry, you bring back things that help a construction company move forward. Because every company does something really well."

Niels Baldauf also benefits from his network. He has acquaintances in consulting firms with whom he enjoys exchanging ideas. He also takes every opportunity to learn more about digital solutions for the construction industry. 

"There are a lot of offers that you can take away, Mittelstand 4.0 or the contact with startups. I also find the whole topic of robotics and augmented reality totally interesting."

Another advantage for the entire company that the generation change brings with it is the opportunity for long-term planning. If the succession is secured, the management's willingness to invest increases, from which everyone benefits. In addition, it is usually important for parents to set up their offspring in the best possible way for the future.

Experience in management positions

Although Niels Baldauf was a project manager in purchasing in his previous career, he did not have any personnel management responsibility there. Nevertheless, he had no difficulty settling into the new role. Since the company has been run by his family for decades, he has grown up with entrepreneurship. Ever since he was little, he's had his father's way with employees, so it wasn't difficult for him. The track record of his first changes has earned him additional trust from employees, which he believes is essential. 

"Our employees didn't make it difficult for me to get started. You can tell they're motivated to go along with the changes, and that's also the most important thing of all: to bring people along with them. Because without them, it simply doesn't work."

Digitization boost thanks to generation change 

In the case of Karl Wolf GmbH & Co.KG, the next generation has definitely ensured that the company is a step ahead of others in terms of innovation and digital solutions. With Niels Baldauf as the first contact person and responsible for this area, the transformation was accelerated. This was primarily due to the fact that he had seen in previous companies the added value that digitization brings. He also thinks about his customers: 

"When it comes to digitization, we focus on the points that make sense for us and our customers. And if I wanted to build a house for myself now, I would definitely see it in 3D and be able to walk through it."

The younger generation of managing directors can identify more easily with the target group of today and tomorrow and understand their expectations. Even if the older generation should not rest on its laurels, there is reason to believe that the subsequent managing directors will provide a digitalization boost in the construction industry.

Published by

Berit Behler

9.11.2022

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