by Sören Stamer October 02, 2006 at 06:26 PM

Dieter Rappold is an Entrepreneur. He truly is. You can feel it instinctively when he is around. Dieter's self-confidence and optimism, his openness and curiosity, his reflectiveness, and his way of communicating both directly but also analytically make him special.

Dieter has the rare gift of seeing the best in people, and takes pleasure in seeing others fulfill their potential. Take a look at this personal feedback and you’ll know what I’m getting at. I am still amazed.

I met Dieter last week in Hamburg for a little less than 30 minutes. We instantaneously established rapport – it was a great meeting. I guess we share a lot of our core values.

What astonished me most were the similarities between our two companies. Dieter founded Knallgrau in 2001 - a pretty tough time for an internet company. But tough times create strong companies, since you have to be smart to survive, focus on the right things, and learn fast. Those who survived learned a lot. And I am sure Knallgrau did. I also remembered our first four years at CoreMedia. We had a lot of enthusiasm and a lack of money. Finally, both companies succeeded.

However, success will demand change and change will create new challenges.

Dieter's new challenges are totally different from those in the past. Since Knallgrau is operating in a booming market now, organic growth seems easy to achieve. However, organic growth might be difficult to manage. When CoreMedia was roughly the same size as Knallgrau, I made a mistake. A big mistake. I am still grappling with the consequences.

With a staff of just 35, our organizational structure was simple. We were all on the same big team and we met for a joint breakfast every Monday. Everyone shared the same goals and communication was easy. The whole team was flexible, customer-oriented, innovative, and fast moving.

Unfortunately, 35 is pretty much the maximum number of people that can enjoy such an informal organizational structure – and fit round one breakfast table. Therefore, we had to change.

We introduced more formal and stringent management structures. We established clearly defined departments like Research & Development, Professional Services, Sales, Marketing and Internal Services. It seemed the right thing to do. Actually, it was the only concept I knew of at that time (a shame, really, after completing a Diploma in Business Administration). But, with hindsight, it was a really stupid idea.

Unfortunately, the new structure worked well at the beginning. We grew to more than 100 employees and enjoyed an annual growth rate of more than 100 percent in revenue for several years running. But after a while, I started to recognize the downside of our department-oriented structure. As time went on, and with every new member of staff, it became more and more dysfunctional. Our organization became incrementally more rigid, more inflexible. After a while we had nearly lost some of our greatest strengths: our strong customer-orientation and our ability to innovate. Our departments developed what you might call chasms between each other. On occasions, sarcasm replaced the trusted communication between the members of different departments. And the members of the management team worked as if they owned their own private empires. Suddenly, it was all about power.

I believe my personal management style was also part of the problem. As with the early days at university, I wanted to stay an equal member of the team. Actually, this is a stupid idea for the CEO of a company. It might be possible within a very small team, but it is dangerous in a fast growing company.

As a result of our strong corporate culture, and the enthusiasm of our employees, CoreMedia at the time was still successful and growing 20-40 percent per year. And we won the Best Innovator competition run by A.T. Kearney in Germany, in 2004. On many occasions we simply ignored the official organizational structure to achieve the success we wanted. Unsurprisingly, most of our greatest achievements were therefore the results of projects that did not fit into our official structure. In fact, we were successful in spite of our structure, not because of it. Hence, I became convinced that we would do much better with a different corporate structure.

So I started to think about a better organizational structure. I met other Entrepreneurs, talked to business consultants, and worked with a personal coach. In one year I learned a great amount about learning organizations, organic growth, leadership, corporate culture, social dynamics and cultural change.

Change management became my new profession. And I started at the top - with myself.

When I realized that my strengths are the strengths of the company and my weaknesses are CoreMedia's weaknesses as well, I decided to actively develop my personality. Fortunately, it wasn't too difficult once I got started: I've started to ask for personal feedback whenever appropriate and discovered a lot of my blind spots. By analyzing my behavior and my underlying basic assumptions, I was able to challenge these assumptions and, in the end, managed to change some of them.

My own personal development triggered a change process at CoreMedia. In the next phase, our management did pretty much the same as I did. Together, we analyzed the way we work as a team and started to improve it - step by step. We developed a new process-oriented structure, introduced a project organization and dedicated competence centers. We defined standards for working in our teams and introduced self- and third-party assessments with full transparency.

Our joint goal was - and remains - achieving organic growth more successfully. We are dedicated to building a fast-learning organization with a high degree of self-organization, flexibility and robustness.

I am sure that CoreMedia's new organizational structure, with its corresponding corporate culture as embodied by the CoreMedia people, will be our biggest USP as a company in the Web 2.0 era. It is a perfect fit since our new structure is based on some of the same principles as Web 2.0: transparent feedback, self-organization, and reflection. Put simply: CoreMedia's new organizational structure is organic.

Today, I am the CEO of a company with 150+ employees and my role is a completely different one than in the early day of CoreMedia. It is more about change management and coaching than ever before.

Dieter, I wish you all the best for your change management at Knallgrau. It is a fascinating journey and such a great experience. Let’s stay in touch and see if we can support each other.

Live is a learning experience.