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Technologies are presented as universal medicine, while focusing on people, be they customers or employees,

is sidelined 2019 A magazine for clients and friends of KPMG Czech Republic


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Customer Rhythm Top 100 Customer Experiences in the Czech Republic

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www.nejlepsi.cx #nejlepsiCX

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1 © 2019 KPMG Česká republika, s.r.o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“), a Swiss entity. All rights reserved.

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For real Success can be instantaneous today. Facebook and Instagram show meticulously photoshopped faces of our lives, to which many people dedicate a lot of time. Social media help make "stars". A similar trend of virtual champions is afoot in business. Those who have made a real name for themselves, however, are not so visible. They spend their time on more important things, building real relationships instead of threading conference appearances on a string at a break-neck pace. They only speak when they have something to say. They prefer the actual to the virtual. But we all are partly to blame for this "virtualisation". As companies, we contribute to it at two levels. First comes our communication with the generation entering the labour market. I feel we try too hard to create the impression that work is not work but all fun and games. We show beaming faces and beautiful offices with swings, omitting the fact that growing to be one of the best takes time. We do not speak of personal responsibility, without which there will be no "happiness at work". We do not say that success is something one must work hard for. The second level is buzzword bingo. We love playing it, tossing around robotic automation, artificial intelligence, big data and blockchain. We forget to add that data quality is the determining issue that slows down Czech companies the most. Technologies are presented as universal medicine, while focusing on people, be they customers or employees, is sidelined. But without focusing on people, you can't do things for real.

Petr BuÄ?Ă­k, Partner in charge of Advisory, KPMG Czech Republic, pbucik@kpmg.cz


How does a brand become a lovebrand? Successful companies care for their customers. Trust is


essential, confirms psychologist Eva Hรถschlovรก. The first part of this issue is dedicated to managing customer experience.


5 CX tips from the best Empathy, problem-solving and personal approach: these are just some of the many vital ingredients in the successful business recipe. Every year, KPMG publishes a ranking of top companies in customer and consumer experience. This ranking of the successful is based on the opinion of the most qualified – the clients. Their experience is now the key factor in a brand’s competitiveness and ability to satisfy ever increasing customer requirements. Find inspiration in the tips from the best who reveal what is behind their success and how they stood up to competition.

Czech top 100 customer experiences The ranking of successful companies is based on customer experience (CX). The 2018 survey revealed that the crucial elements of CX are the quality of personal contact with the brand and the ability to adapt to customers. 5000 respondents shared their experience. Their opinion was used to detail the situation in ten public sector industries and to establish the ranking of TOP 100 companies. Download the results at www.nejlepsi.cx/en.

Written by: Mariana Wernerová

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Manufaktura

MND

Believing in your own products

Improving what clients bring up

Tomáš Kratochvíl, Executive Director

Jiří Škorvaga, Group Retail Expert

Now a successful cosmetics company, Manufaktura opened its first store with traditional artisanal products in the heart of Prague's Old Town in 1991. The company is dedicated to making high quality products from original Czech ingredients and is known among its customers for its stores reminiscent of historical home spas.

MND, “Moravské naftové doly” (Moravian Oil Wells), has been supplying households and companies with gas and electricity since 2014. MND builds on contract flexibility and fair treatment which is reflected in its code of ethics – “MND's Ten Commandments”. The company takes pride in active communication with customers via its call centre instead of using coercive actions.

About the company “At first, we were also in wholesale. Then we realized that what matters is not only the product but also the service, which does not combine well with wholesale, where you lose control over the environment and selling practice. Therefore, it made sense to integrate everything under one roof. The company runs not only on emotions but strictly on figures – we have a detailed and elaborate product success rating system. We don't use any marketing tricks. Misleading statements and comparative advertising are not in our book”. Customer approach “Customer experience is collected from our sales assistants and passed without any delay to our colleagues in development who get back to us immediately with the improvements they made on the product. Our cosmetic products are not animal but human tested. In short, we want every employee to have their own view of the brand and speak well of it. But this is only possible if you genuinely believe in the products. If we say that our products contain certain substances, it means they really do”.

About the company “We don't preach the company ten commandments, we live by them. In line with our ten commandments, none of the company's hundred thousand customers was acquired through “coercive action” in door-to-door sales – these are a taboo for MND. We are a paper-less company providing all customer services online and over the phone. Changing your supplier is a very complicated process in the Czech Republic, so people prefer to call. And since all our operators are located in one place, we can explain to them quickly what the clients should experience in communication with them. We put together a program called “the Cathedral”. We want them to believe that they are really building a cathedral of customer experience”. Customer approach “Everything the client says is important to us. First, we want to improve what clients bring up, and not what they don't. We found out, that in the “empty” period when people are just waiting for their contract with their previous supplier to end before switching to MND, they get a feeling that nothing is happening or that we want them to do something. Now we send them regular text messages that we are looking forward to welcoming them, nothing more is needed and there's just a certain waiting period”.


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Luxor

Tchibo

Creating a bookshop that feels like home

Building service on personal contact

Zdeněk Novák, Marketing Director

Steffen R. Saemann, Marketing Director

This year, the Luxor bookshop chain has grown to 34 outlets scattered in both larger and smaller Czech cities. The brand takes pride in creating a cosy home environment for its customers, offering professional services and always providing something extra.

Originally a coffee mail delivery company established in Germany, Tchibo has been active on the Czech market since 1991. Today, its Czech network boasts almost forty brick-and-mortar stores and it is no longer just a coffee-selling company. Tchibo's range of products now includes its own collection of consumer goods which are also available in large hypermarkets thanks to the shop-in-shop arrangement.

About the company “A bookshop that feels like home. This is our claim and a goal put into practice by our 'luxorcrew'. We always provide something extra for our customers. We organize regular book events, such as a summer terrace Q&A with Tomáš Šebek, a book signing with Jaroslav Němeček or the launch of the book “Terapie sdílením”. Our Luxor reading room does the rounds of festivals and cultural events”. Customer approach “The Luxor reading room represents an original chill-out zone at summer events and music festivals where you can relax on a lounger, read a new book release or take a picture in the unique Youbox photo booth. We will see you at the Karlovy Vary Festival, Majáles or the Hrady CZ festival. Some of our stores feature coffee shops that invite our customers to enjoy great coffee, relax for a bit and think about a destination for their summer vacation. In short, our bookshops feel like home”.

About the company “Our unique business model of surprise and innovation, with a new complete collection of consumer goods every week definitely helps us create a relationship with our customers. Some of the most used and valued services are 'cross-channel shopping' when the customer orders the product online, has it sent to a store to examine it and try it on before purchase, or the promise of exchanges and returns with no pointless paperwork or questions”. Customer approach “Personal contact and personal customer experience in our stores are one of the most powerful moments in building a relationship with our customers. This is why we put great emphasis on shop assistant education and training. In communication and campaign preparation we always bear in mind that everything we do revolves around our customers. We want communication, our customer approach and interaction with the company to happen through the channels preferred by the customer: online, via mobile devices or in person in our stores”.


Starbucks

Offering an excellent service and atmosphere Lukáš Porazil, Regional Director

The Starbucks coffee chain takes pride in making a coffee shop the third important place in customers' lives between work and home. Aside from a rich selection of coffee, cold beverages and snacks, it also sells mugs with pictures of world cities hosting its branches. “Starbucks' cornerstone is excellent coffee, but the key to success is customer communication. An individual approach, perfect service and the pleasant atmosphere of the 'third place' are the main reasons why customers like to return”. (According to sociologists, the third place is a space acting as an anchor of informal public life with socialization as the main function. It is physically separated from the workplace and home. – Ed.)

Start with your employees Tomáš Potměšil, Head of the Customer Centre of Excellence, KPMG Czech Republic, is the mind behind the Customer Rhythm study that presents a summary of this year’s survey of the best customer experiences in the Czech Republic. Where should a company start in order to improve customer experience? People are the foundation of good experience. When a company wants to improve its image in the eyes of its customers, it should start with the employees, because their positive experience will have a direct effect on the customer experience. The way an employer treats their employees will be reflected in the way the employees treat the customers. The study follows up on the last year’s Fair Play study. Where is customer experience in the Czech Republic headed? The results of our survey confirmed that there are more and more brands that put more emphasis on CX. The number of those who realize the importance of putting themselves in the customers’ shoes is growing. These companies approach CX in a comprehensive manner and manage it by designing individual interactions with the customers who now have, thanks to the current technological developments, a very powerful weapon – the ability to give immediate feedback.


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AÂ crisis can actually make you money


Written by: Markéta Hronová

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When a customer does not receive their goods on time or has their order mixed up, it does not automatically mean the company has lost that customer’s business. If the company finds an elegant solution for the crisis, the customer’s trust and loyalty may actually increase, says psychologist Eva Höschlová. Ms Höschlová was one of the speakers at the KPMG Retail Forum 2019, a conference dedicated to the topic of trust. In her presentation, she spoke about the psychology of shopping and mistakes in communication that companies make. Why are Czechs so thrilled about discounts? Almost nothing is sold without a discount anymore... Discounts are attractive outside of this country, too. Their strength lies in the psychology of human decision making and judgment. We usually assess how advantageous a certain offer is in comparison to other values. We call these reference points. When we see that something cost more in the past, and now we can buy it for less money, we feel this inner victory of having made a good deal. The fact that most of the time this is not true, is another matter altogether. So the actual price plays a lesser role in our decision making than what we compare it to? Let me give you an example. Say you would like to go on holiday to the Maldives. You know the normal price for a week-long holiday there is 2,000 dollars. Then you find out that the holiday is on special offer and costs 1,600 dollars. Would you want to buy it? Most people would say yes. Now imagine that you create a different scenario for a second group of people in your experiment. The original price of the holiday is still 2,000 dollars. You have found out that it is on special offer for 700 dollars and immediately ask for a booking. The travel agency says that the capacity for that offer has been reached, but there are a few places left for 1,500 dollars. Would you want to buy the holiday? Most people say that under these conditions, they would not. The price does not look that advantageous anymore. What's more, it is not easy to cope with the feeling of sitting on the plane next to someone who will be enjoying the same thing as you for less than half of what you had to pay. Is there a measure that would tell us to what extent we buy products for their quality and to what extent we are influenced by advertising? A percentage?


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You can carry out an experiment to verify the influence of a brand on people's preferences for a certain product. It is simple. You divide a representative population sample into two groups and observe their preferences for selected goods or services. One of the groups has all the logos, packaging, etc. removed or covered. The differences between the groups’ results can be attributed to the brand or its advertising. However, there are a number of methodological obstacles to this. It does not make sense to try to express this in percentages; there are substantial differences between different industries, products, services, levels of brand awareness and so on. How come advertising works on us? We all know it is trying to dupe us. Psychology sometimes speaks of a so-called blind spot mistake. We tend to systematically overlook or misjudge certain things, despite being aware of them. Moreover, we feel that other people are much more likely than us to have faulty judgment or let themselves be influenced. We all know the trick with prices ending in a 9. A product for 99 crowns looks a lot cheaper than a product for 100 crowns. Psychologically, the difference is much bigger than between 100 and 101 crowns, although mathematically it is the same thing. Why is that so? One of the reasons is the fact that 99 only has two digits, while 100 has three. There is considerable proof that the number 9 looks much more attractive to people than other numbers. A well-known MIT study experimented with different prices for the same dress in mail order catalogues. The prices of 34, 39 or 44 dollars were randomly attributed to the individual catalogues. Dresses priced at 39 dollars were sold at much larger quantities that those priced at 34 and 44 dollars. The difference was such that the profit from selling dresses priced at 39 dollars exceeded that from selling dresses priced at 44. In short, numbers ending in 9 are attractive for many people and generally give the impression of a bargain, irrespective of what we rationally think about it. What makes us trust some brands more than others? Trust has many building blocks. They work the same way for trust between individuals and trust between a customer and a company/ brand. The first building block is benevolence. We expect that the other party will treat us well and take good care of us. Likeability plays a role here, often at an unconscious level. The second one is integrity. We want to know what the other person's intentions towards us are, and what moral and ethical principles guide their actions. The third building block is based on competencies. Does the person whom I am supposed to trust have enough skill, knowledge, means and resources to be able to deliver on their promises? And the last one is predictability. Are they consistent in their behaviour? Can I rely on what they are saying? Do people tend to be loyal to their favourite brand, or is it possible to easily pull them over with a more advantageous offer?


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"Numbers ending in 9 attract our attention. Dresses priced at 39 dollars sold much better than those priced at 34 and 44 dollars."

Eva Höschlová (35) – Majoring in Psychology, she graduated from Faculty of Arts, Charles University in 2008. In 2013, she completed her PhD studies. She currently teaches economic psychology and classes focused on psychometrics and psychodiagnostics at the same school. For more than 10 years, she has served as a consultant for the QED GROUP, which looks at different ways of improving cooperation and corporate culture.


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People are very different when it comes to this. For some, discovering more advantageous offers is a form of entertainment; for others, it is even more – a question of having peace of mind. Some time ago, economic psychology started to divide people into two groups: maximizers and satisfiers. For certain people, being happy with the product is enough to make them choose and buy it. As long as the product approximately meets their expectations and is reasonably priced, they buy it and are content. From that moment on, they do not spend time looking for other, similar offers. These are the satisfiers. And the second group? The second group does not buy anything until they are absolutely sure that it is the best of all possible offers. These people make comparative charts and do in-depth research. They cannot bear the uncertainty of the possibility of something more advantageous around the corner. If, after they have made their purchase, a better offer springs up, they cannot sleep over it. Literally. Logically, these two groups represent completely different customer types. And then it all becomes a lot more complicated due to the fact that for some people, price is a key metric, while others make their decision based on product quality, customer care, speed, availability, environmental friendliness, etc. How is the behaviour of companies influenced by the fact that nowadays customers can complain publicly on social media and do so often? Fundamentally. In our digital era, the trustworthiness of brands, companies and also individuals is, to a large extent, tied to their reputation. People have become used to reviewing everything and everyone. They read review results, share them and rely on them. That is why if you want to survive and be successful in this world as a company, you have to focus on customer experience. Do companies make more effort since criticism is so easy and much more visible? Of course. It is not just about the customer's general level of satisfaction. What counts are all their emotions and experiences acquired from the first moment they encountered the brand. How easily they can find what they are looking for. How easy it is to buy this thing, how fast and by what means it will be delivered. The customer evaluates how they are treated by the company when something is different from how they wanted it. They observe how fast someone will address their issue and how the company will approach it. The psychology of communication plays a huge role. When the customer is in distress and their trust towards the company/brand is under threat, it may also be an enormous opportunity. Opportunity? If the company is able to manage crisis situations with elegance, the customers' loyalty increases tremendously. Unfortunately, many com-


"If you send flowers together with an apology to your customer, her trust in your brand can actually grow." panies make fundamental mistakes in how they communicate with customers at this crucial time. Can you give me an example? The principal mistake is a lack of communication. Have you had a complaint from a customer? The worst reaction is silence. If things don't go as they should for the customer, if they do not receive the care they expected to receive, they are frustrated. When, at a moment like this, they cannot find anyone who will address their problem, who can help them, their anger grows. If someone does contact them, they often make the mistake of not being able to convey to the customer that the company perceives the problem as important, as their own, and that they will immediately look into it. Is that really so important for the customer? Don't people just want a quick remedy? They do, but emotions really do play a major role in this! What's interesting is that emotions play a bigger role than the actual time it takes to fix a problem. People in distress like to feel that the counterparty is acting, doing something. They don't want to hear "not possible now", "a different department takes care of that", etc. If someone is frustrated or angry, it doesn't make sense to try to reason with or convince them. You are fighting a losing battle. If a customer loses their trust in you, how hard is it to win it back? That depends on what you think caused the loss of trust: was it an integrity failure (i.e. a breach of moral principles, a breach of contract with the aim of self-enrichment), or a lack of interest in the customer, or insufficient competencies, i.e. someone has made a mistake? If the problem consists of a mistake only, it is much easier to repair broken trust, simply because people believe that it doesn't have to happen again. Compromised integrity, on the other hand, is something they see as constant and unchanging. Your reaction to a failure or a mistake is also vital. A simple verbal apology is, of course, a polite necessity, but concrete steps are much more efficient. A good example of a small compensation is a present, ideally personalized. Presents are better than money. If you react quickly to a mistake, show your readiness to address it, and send flowers together with an apology to a customer, her trust and loyalty towards the brand can actually grow.


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Written by: Anna Dvořáková

Business and trust – Retail Forum’s fourth edition focused on trust – on how it is built, managed and regained when it has been lost. We asked the Forum’s participants, coming from both small and large companies, and KPMG experts what trust means in business.

When they buy goods and services, trust is of the essence for Czech customers. Such is the finding of KPMG's new customer experience survey "Customer Rhythm". This is also why Retail Forum 2019 focused on the topic of trust. Eight speakers, including representatives of a family business, a strong brand and a growing start-up, presented their take on trust in business.

“The survey data show that the most important pillar on the Czech market is integrity, the pillar built on trust. Its influence on customer experience, and business, is growing, since customers have more and more ways to tell if they were cheated or if the company didn't meet their expectations. They share it on social-media, and it turns out that trust has a huge impact on company business results. Customer choices are significantly influenced by online reviews and recommendations from other people." Jan Klimeš, CX Expert, KPMG Czech Republic


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– do they go together?

"I see trust as a relationship on two levels. The first is personal, it's about trust between friends, or a woman and a man. On the company level it's about the customer's relationship with the company. It's something built with small steps over the long term resulting in trust in our partner. In our bakery, customers see themselves as part of the company. When they have a wish or we do something wrong, they tell us. And one must master the skill of using this criticism or inspiration to move forward, since people with an urge to criticize or offer new ideas will one day become regular customers. They are ambassadors who will spread the word about the brand further." Antonín Kokeš, owner of Albi and Antonínovo pekařství

"We based our tech business on a non-tech thing. Because we believe that the service we provide is far more influenced by the driver – the service provider – than the technology – the app itself. So we build trust primarily on giving drivers the freedom to offer a quality service and earn more money. This is why people can choose their driver. Better drivers then earn more. I see trust as both an investment and a prerequisite of a good relationship." Ondřej Krátký, CEO, Liftago

"I am someone who values trust a lot, both in personal and professional life. Trust is transparency, clarity, the possibility to foresee the actions of the other, and the minimization of uncertainty." Martina Štegová, Partner, KPMG Czech Republic “We've been organizing Retail Forum for four years now – it’s something that is close to our heart. It’s open to the widest retail public. Our speakers include representatives of brick-and-mortar stores, e-commerce, family businesses, start-ups, and established brands. It’s therefore an interesting mix of those who have something to share with the retail world,” says Martina Štegová, Partner, Head of KPMG CZ’s retail sector.


Switching to agile management is all the rage. We have talked to those who have already taken the leap.


Data analytics is another hot topic, although its golden era is yet to come to the Czech Republic.


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Regional economic centres led by Vienna

For the 9th time in a row, Vienna tops the chart in the Mercer Quality of Living Survey. The chart is published annually, based on a survey of 231 cities. Vienna owes its excellent result primarily to growing economy and reasonable housing costs. Prague ranks fourth in its region, leaving behind both Warsaw and Budapest.

Pavel Dolรกk, Director, KPMG Czech Republic, pdolak@kpmg.cz Sources: Mercer 2018, UNI data, statistical offices, Eurostat, KPMG


Unemployment rate (2017)

Average annual population growth (2013−2017)

Vienna

1,8 %

Munich

Prague

Budapest

Warsaw

2%

10,4 %

5%

3,9 %

2,7 %

Hamburg

Average annual GDP growth (2013−2016)

2%

4,2 %

2,1 %

4%

1,4 %

0,7 %

4%

2,9 %

0,2 %

3%

2%

0,6 %

Average annual population growth (2013–2017)

Unemployment rate (2017)

Average annual GDP growth (2013–2016)

Average annual number of apartments with a building permit / in construction per 100,000 people (2015–2017)

Average annual growth of apartment prices per m2 (2014–2017)

Number of average gross annual salaries needed to purchase an average new apartment H1/2017

Vienna

1,8 %

10,4 %

2%

910

3%

9,5

Munich

2,7 %

3,9 %

5%

685

5%

9,9

Hamburg

2,1 %

4,2 %

2%

593

5%

6,7

Prague

0,7 %

1,4 %

4%

307

11 %

12,3

Budapest

0,2 %

2,9 %

4%

515

11 %

9,7

Warsaw

0,6 %

2%

3%

1237

0%

6,1


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What do you see as key for Prague to still rank among prominent European capitals and remain the regional economic center in 50 years’ time?

Prague needs to build a modern infrastructure to be linked to other regional centres (Berlin, Munich, Vienna, Warsaw) — namely a high-speed rail connection to the pan-European network. Citizens, but more importantly the public administration, must significantly improve their knowledge of English as an EU-wide language. It would also be good to avoid the asymmetries created by European funding which goes into science and research outside of Prague, to the Central Bohemian Region where, however, there is less potential and productivity compared to Prague. If Prague is successful, it will attract new inhabitants and must therefore provide for trouble-free, fast construction of housing and administrative buildings. If it fails to do so, property prices will grow and promising companies will sooner go to Brno, Ostrava or Warsaw. The education system must change to focus on developing creative approaches to problem solving. Most jobs that can be automated will be gone by then and human labor based chiefly on know-how will be primarily located in big cities. Ondřej Boháč Head of the Prague Institute of Planning and Development (IPR)


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Prague will always be the regional economic centre. However, the question is how strong will this region be in competition with similar neighbouring regions. Prague naturally dominates the territory of Bohemia but is failing to gain the same long-standing dominance in Moravia. It is obviously a question of distance which is, in relative terms, even increasing due to the lack of infrastructure development. The importance of a city is based on its size, i.e. its population density, and a certain resultant higher added quality. This quality remains, aside from a few exceptions, stable in the long-term – only Bratislava and Brussels have managed, thanks to a change on the national, or supranational, level to move up the European hierarchy over the last 50 years. But this is not on the cards for Prague. Prague has always been the power and administrative centre of the state, a cultural capital (the westernmost Slavic metropolis) with a unique architectural structure which is not just a tourist attraction. Therefore, striving to make Prague a gateway into Europe for our kindred Eastern nations while always profiting from the multiplied socio-economic effect of each foreign visitor (investments, expats, congress tourism) is the only possible way forward. Tomáš Hudeček former mayor of Prague

Prague should follow an approved, long-standing strategic plan. Unfortunately, currently with each municipal election, the things done by previous leaders get reassessed. It is also desirable to finish the construction of basic infrastructure transport routes and find a comprehensive city parking solution. We should also get rid of this self-centreed Czech approach. Let's look at solutions and changes implemented elsewhere. Let's not be so full of ourselves. Prague really is a gem of a city. It has a conservation area and it's good that it's protected. But this conservative approach sometimes seeps into other areas where the focus should be on interesting architecture and modern buildings. In Nové Butovice, for instance, we built, at our own cost, a boulevard dominated by a sculpture by David Černý and the Czech Photo Centre Gallery. Shortly, we will also open CyberDog, a science and technology information center featuring a wine bar employing top-notch technologies. Marcel Soural Chairman of the Board, Trigema


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Written by: Štěpán Vorlíček

Revolutions start silently

Electro mobility, hydrogen, autonomous vehicle integration. Europe is in the slow lane of the automotive industry. Connectivity and digitalization are some of the key factors. These are just some of the trends shown by KPMG’s 20th Global Automotive Executive Survey (GAES) in which executives from the automotive industry outline where the sector is headed in the near future.


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We will witness a restructuring of the sector with regional shifts and raw material availability playing an increasing role, and different types of powertrain will share global roads almost in an equal measure. The business model with physical retail outlets as we know it today will most likely change and large data volumes and car computers in general will gain ground. In 2019, the survey participants looked for the first time not at the five-year horizon, but up until 2030. A storm is coming The sector will experience a major reshuffling, the survey revealed, with solid knowledge and experience from previous decades as the major building block together with the ability to find a place in the new ecosystem to secure future earnings. Connectivity and digitalization have ranked second for two years but now they are back as a number one trend. 59% of execs believe that by 2030 this sector will play a key role. Electro mobility, fuel cells and hybrid technologies are right behind. The automotive world will also change in terms of production locations. And Europe won’t do very well according to execs' expectations. While today, 15% of global car production comes from the old continent, in ten years it will be less than 5%. At least this is the belief of 67% of respondents (mainly from Asia and Northern America, most European execs don't expect such a drop). China will become a leader in clean e-mobility and since the country is one of the three biggest producers of battery parts, many countries will depend on it even more than today. 77% of execs agree that the impact of regulatory measures on business will increase in the following decade. Another interesting figure is that three out of four execs believe that local raw material availability will decide which type of powertrain will dominate the region. Most respondents (60%) agree that we will no longer differentiate between the transportation of passengers and goods and 77% believe that in ten years, traditional public transport will give way to individual, on-demand “capsules”. Is the combustion engine nearing extinction? The aforementioned raw material availability, industrial strategies and supplier portfolios will play a decisive role in which powertrain will dominate in various parts of the world. By 2040, the distribution could be as follows: battery electric vehicles 30%, fuel cell electric vehicles 23%, internal combustion engines 23%, and hybrids 25%. Most execs agree that e-mobility is a clear-cut trend albeit with a slower rise than expected. For survey participants, the most significant entry barriers to the electric world are the price of the technology (35%), charging infrastructure (24%) and electric vehicle range (18%). They also expressed reservations regarding the rapid development of autonomous vehicles. Aside from believing there is a need to think differently in this sector, 71% of respondents agree that failing to separate


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autonomous and traditional vehicles on the roads will present serious security risks. Let's adopt a different approach Execs agree that today we focus too much on isolated technologies and not enough on infrastructure and the creation of ecosystems. If we zoomed in on applications – developing a city solution consisting of autonomous, electric, and shared vehicles and infrastructure, for instance – it would be a lot easier to come up with business models and solutions. GAES respondents often repeat that a comprehensive approach to ecosystems will bring a more accurate description of the environment, the necessary infrastructure and car-integrated technologies. Companies able to combine location-driven thinking (city, main rural transport routes, remote areas) with ecosystem technologies (electric, autonomous, shared) and infrastructure (connectivity, such as 5G, transport and charging infrastructure) will become sector leaders. On the contrary, companies focusing solely on individual technologies will become just subcontractors of the previously mentioned. Who is the customer? The customer will gain on importance, hence getting to know the customer perfectly will become a priority. Emphasis will be placed on differentiating carefully between customer “archetypes” – each has different needs, preferences and requirements and car manufacturers will have to be able to manage several customer journeys in parallel. The retail level will undergo a significant transformation. Almost half (48%) of participating execs are confident that already by 2025, the number of physical outlets as we know them today will be reduced by 30-50%. New approaches and views will be highly necessary: outlets will transform into repair and maintenance shops, used-car dealerships or places providing non-traditional and emotional experiences which are not associated with car buying today. Computers on wheels The execs agreed on a definite trend: information technologies will play a leading role. After all, the market value of the fifteen top digital companies in 2018 was roughly five times higher than that of the fifty top automotive companies. Cooperation of these two sectors will also be key. Two out of three execs believe that cooperation should be prioritized over competition. Safety is already a hot topic today and nothing will change in the next decade. Respondents showed a clear opinion that manufacturers can best monetize data by using them in safety-related services. So, the future looks quite optimistic. GAES showed that only a minimum of executives fear that automotive companies' profits will drop. 69% of them expect a boost in the number of transactions in the following years, mainly in China. And 81% are confident that there will be a shift from traditional sales towards mobility service offers.

Which of the following companies/car manufacturers do you think will be the leader in electro mobility in 2025? Rank (last year's rank): 1. BMW 2. Tesla 3. Toyota 4. Ford 5. BYD Auto 6. Honda 7. Volkswagen 8. Mercedes-Benz 9. Hyundai 10. General Motors

(1.) (2.) (4.) (6.) (3.) (5.) (7.) (9.) (8.) (10.)

Which of the following companies/car manufacturers do you think will be the leader in autonomous driving in 2025? Rank (last year's rank): 1. BMW 2. Tesla 3. Toyota 4. Ford 5. Mercedes-Benz 6. Honda 7. Volkswagen 8. General Motors 9. Hyundai

(1.) (2.) (7.) (3.) (4.) (6.) (9.) (−) (8.)


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The future of the automotive sector The entire Global Automotive Executive Survey 2019 can be found at automotive-institute.kpmg.de.

Do you believe that the increase of fleets will lead to an increase in diesel engines, because of total cost of ownership?

Yes  61 %

39 % No

Consumers: Buying or keeping a diesel car is not an option for me anymore.

Agree  68 %

32 % Disagree

If I buy an electric vehicle I expect the manufacturer to take care of all the matters around charging: negotiating a suitable electricity contract, installing a charging home box, and offering fast chargers on the go.

Absolutely agree  53 % Partly agree  33 %

2 %  Absolutely disagree 3 %  Partly disagree

Full cell electric vehicles (FCEV) will be the real break-through for electric mobility.

Agree  79 %

12 % Disagree


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Introducing a new data and analytics university programme

Across the entire globe, companies are building data analytics departments and looking to recruit hundreds of experts in the field, but so far, there are few of them on the job market. As it happens, the Czechs have built a stellar, global reputation in the field, making the demand for the said experts even higher. Thus, Czech universities are teaming up with the private sector to satisfy the growing demand.


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I believe that in data and analytics, technical knowledge is not the most important aspect (although it is necessary) – it’s mainly about communication and understanding the client’s business. Of course, we need to know how to obtain and process the data, but interpreting them and finding value for the client are the most important aspects. That is why we chose to work with the University of Economics – because of their ability to turn data analytics into something tangible. David Slánský, Partner of KPMG Czech Republic, a lecturer at the University of Economics in Prague, the author of Data and Analytics in the 21st Century

“We see an enormous demand for data specialists, both in our company, and in the companies of our clients who come to us to help them build their own analytics teams. Therefore, I am very happy that we partnered with the University of Economics to create this extremely interesting and very special field of study in the Czech Republic.” – Radek Halíček, Managing Partner of KPMG Czech Republic

According to the World Economic Forum prognosis, data analysts will become one of the most sough-after experts in the world by 2020. A world-wide Harvey Nash and KPMG analysis revealed that this field ranked number one on the list of the most lacking professions from the IT managers’ point of view. Companies from all around the world complain about the shortage of experts in the field of data analytics – it is rather new, after all, and has not yet been properly established at universities, with data-oriented brainiacs lacking economic knowledge and background. Together with KPMG and other partners, the University of Economics in Prague is taking steps to make sure that the Czech job market can respond to the current trend. In the next academic year, an MBA “Data & Analytics for Business Management” programme will open at the Faculty of Informatics and Statistics with the goal to train experts capable of interconnecting analytical and business skills. A new minor for master’s students – Practical Analytics and Data – will also be introduced, becoming a major the following year. A specialized five-volume publication on data and analytics – a joint effort of KPMG and the University of Economics – was also published last year and can be purchased in bookstores, at KPMG’s offices, and at the University of Economics, too.


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Asking the right questions Ralf Brunken, CIO ŠKODA AUTO

What kind of value do you expect the graduates of the new field will bring to your company? Data analysts walk the line between business and IT, so our hope and our expectation are that these people will be equipped with technical skills related to data and analytics and well-versed in economics, too. Without analytics, there will be no new business models and no further automation – and it’s not just about the big data. More importantly, it’s about learning algorithms, because those algorithms need analytical input to help us better understand our customers and use more and more data to achieve that understanding. That requires knowledge in the field of data management, and analytical skills as well. You need the ability to see new formulas in the data, formulas that will help you ask the right questions, and you need to answer to those questions, too – and to do all that, you need good understating of economic correlations. From your experience and perspective, what’s the current situation on the job market in the field of D&A? It’s far from perfect – that’s why we support the joint efforts of the University of Economics and KPMG. Currently, we are faced with two challenges: first, there is a significant shortage of data analysts, and second, their salary expectations are much higher than what we currently offer in this field, and that can lead to friction. That is why we are ready to hire students straight out of school and train them to meet our specific requirements – it takes time, but it’s probably easier than doing it the other way around.

High demand and growing Richard Podpiera, Chief executive officer, ČSOB

Do you expect high demand for data experts in the banking sector and in your company in the following years? What role will they have? The demand is already high, and it will grow further. We need experts for our Data & Analytics department which works on our data warehouse, builds business value through Advanced Analytics (including robotization support), and works on building the Business Intelligence Centre of Excellence for the KBC group. That means we will need dozens of experts to fill our specialized central divisions. Furthermore, the ability to work with data and make analytics-based decisions will gain importance in other departments as well, so our need for people with skills that only data experts are currently equipped with will increase over the following years – and we are talking about hundreds of people.


Practice makes perfect Ota Novotný, guarantor of Data & Business programmes, Faculty of Informatics and Statistics, University of Economics in Prague

How is the new program going to incorporate practical training into the programme? The new programmes were designed to include a lot of practical training from the very beginning. They include practical projects from real companies and an intensive three-month internship for master’s students. The classes will be structured into all-day blocks focusing on specific topics, two or three days a week, allowing the students to use the remaining days to work on their own projects or for part-time employment. Are the students already showing interest in the field of data analytics or do you think you will need to convince them about its importance first? We held our second Data Science and Business Academy VŠE in the second half of 2018. The Academy lasts for an entire semester and is focused on data analytics, bringing in partner experts from the field as teachers. It also allows us to test concepts that will later become a part of our Data & Business courses. The number of students who applied was three times higher than the number of people we could accept, and we also had many applicants from outside of the University of Economics. So clearly, people are interested in data analytics, but it will still take a lot of effort to spread awareness about the field among people who don’t work in IT, and to show them that it might be an interesting field for them as well.

Data and analytics for the 21st century David Slánský's publication sums up data trends and "megaproblems". The 5-volume series proposes solutions and contains dozens of inspirational practical examples.

© 2019 KPMG Česká republika, s. r. o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“), a Swiss entity. All rights reserved.


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Infonomics

The world is awash with data. We are constantly being told of new approaches, technologies and solutions. Data are mentioned when we speak of fighting climate change, improving the fluency of traffic, providing better healthcare, achieving better sports performance or having more comfortable households. It is almost impossible for a layperson to find their way around the data storm we're in. There is a way to tame them, though: moving from pure reflection to examining data value.

That is exactly what the concept of infonomics does. It tries to answer a very simple question: what is the economic value of data? First coined by the Gartner consulting firm, the term infonomics is slowly making its way into the dictionaries of data experts. The underlying idea behind it is that, economically speaking, data are an asset, similarly to tangible property, inventory and other well-known accounting items. Since data are able to generate economic value, they must be an asset. However, your regular balance sheet won't have data on it, unless data are entered as a cost, which is the case of commercial data purchases. Nevertheless, having data in the ledger is not as important as knowing their value for the company. Return on Data While the equation is very simple, inserting the right values in it is more difficult. It is rather complicated to determine the correct numbers for revenue and cost here. Explaining the different ways of calculating these inputs is beyond the scope of this article, and the calculation depends to a large extent on the given environment, i.e. the country, industry, company and its individual departments. Correctly determining the value of your data can be beneficial in two ways: for data management and for the business itself. Benefits for business The basic assumption is that data have value for the business in question, and the practical application of infonomics will enable us to see what the value is. That's not the end of it, though. Knowing what the value of your data is here and now is the basis of success, but you must also be interested in their future value. Data are often not used sufficiently and sometimes they are not used at all. Look at the image

Ondřej Kulhánek, Manager, Management Consulting, KPMG Czech Republic, okulhanek@kpmg.cz

RoD =

(výnosy z dat – náklady na data) náklady na data


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Benefits for business

Benefits for data management

Economic Data have a direct influence on revenues or costs. Examvalue ples include dynamic pricing of online products, lower maintenance costs or more precise decision-making. Direct sales of data or information is yet another matter. Process Data simplify or speed up business processes. A good value example is shortening the time-to-market. Lowering data allow for better risk management and mitigation, risk having a positive impact on the frequency and scale of risk. An example is more precise client scoring for the purposes of a mortgage loan, resulting in a lower probability of non-repayment.

Valuable data you will definitely want to assign an owner, establish change management processes and incident management processes, define necessary roles, have the data documented in detail, take care of data quality, ensure data security, etc. Low value data you will only have generic documentation for them and assign only the administrator role. Data with no value these can be deleted, saving you costs.

Compliance data provide compliance with the law or other types of legislation/regulation. A recent typical example is GDPR.

below to see the different areas in which data can be transformed into business benefits. Benefits for data management As soon as you know which data have real value and which don't, you can relatively easily optimize your data management practice using a straightforward principle: dedicating more effort and resources to valuable data. Dependency on metadata When trying to implement infonomics in practice, there is often a stumbling block. In order for us to be able to say which data have value for us, we have to know what kind of data we actually have and where they are stored. This piece of information is often difficult to retrieve. When creating and implementing IT and business solutions, it is very common that their documentation is underestimated, especially data-related documentation. This is caused by our modern, fast approach to everything, which prioritizes minimizing costs. It is short-sighted, though – when you cross out items like good quality documentation, they will later resurface as an extra cost: repeated analyses or even repeated development make the solution more expensive. Infonomics in general and this data management discipline in particular cannot do without this input. Luckily, there are exceptions. Some companies create and manage metadata, which simplifies their job. The often-loathed GDPR is also a good tool for this, as it has forced a number of companies to at least map all the personal data they have. And personal data represents one of the most important groups of client data. Let's hope the foundations are not too shaky.


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Agile management – not just yet Written by: Hana Slívová

Few segments experience tech innovations as often as IT and finance. According to the specialized magazine CIO.com, these are also the businesses that most often adopt agile project management where the key is work in small, multidisciplinary teams. They are better at responding to customer wishes, fast delivery, efficient roadmap selection, and making room for experiments. Agile management is a process Czech companies are gradually getting familiar with. It's up to top managers not to be afraid to delegate a bigger share of responsibility to their teams and act as role models. An extensive KPMG survey compared the ability of Czech and European businesses to switch to agile. "The biggest challenges of agile management implementation are a complete company culture overhaul, management support and low IT flexibility," says Martin Hladík, the KPMG partner in charge of the survey. The survey found that, for instance, companies with more experience in agile tend to have more realistic expectations towards the future.

How to start an agile transformation Master agile methods and procedures you can apply in your company. Learn Spotify, SAFe and SCRUM frameworks and find out more about the role of architecture in an agile organization. Check out KPMG’s training courses at www.skolenikpmg.cz/skoleni/agilni-transformace.


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What companies expect from agile management of respondents with under 3 years of agile experience CZ

of respondents with over 3 years of agile experience EU

CZ

EU

Faster product and service development 90 %

81 %

100 %

Faster response to change 40 %

42 %

0%

47 % Faster response to change

Lower costs 30 %

13 %

0%

0%

63 % Faster product and service development

Lower costs

As the 2018 survey "Technology with a human face – Global CEO Outlook" shows, Czechs are far less convinced about the necessity to implement agile in businesses than their global colleagues. Two thirds of Czech managers believe that their businesses can thrive and won't go bankrupt without agile. Abroad, only a third of managers think the same. "Agility is what it's all about. If we're not agile, we'll go bankrupt." CZ Agree 12 % Definitely don't agree  28 %

16 %  Definitely don't agree 28 %  Don't agree

EU Agree 31 % Definitely don't agree  16 %

15 %  Definitely don't agree 14 %  Don't agree


Let us introduce the three most important Czech moneymen of the past century.


And take a look at how the older generation is slowly taking up youtoubering.


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Notable figures of Czechoslovak monetary affairs Zdeněk Tůma, Partner at KPMG Czech Republic Photo by: Czech National Bank

It is said that history repeats itself, and that we are often faced with the same issues that our ancestors had to deal with, too. Indeed, we can find many similarities between the First Czechoslovak Republic and the period after the Velvet Revolution. Just as we had to deal with a crisis in the banking industry in the 90s, the authorities had to deal with the exact same issue back in the 20s. The same heated debates on forms of support that financial companies should receive and how much the state should participate in saving them that we saw not too long ago already took place back in the day. There was perhaps one aspect that made our position in the 90s more difficult: after over 40 years of centralized planning, private capital was practically non-existent, and most importantly, we lacked knowledge on how to run companies under a market economy, not to mention a complete lack of necessary institutions, infrastructure, and legal frameworks to govern the market. That is not to say that the situation was simple in the 20s, when the companies had to deal with the break-up of the Austro-Hungarian Empire. For foreign investors, we were a new and completely unknown entity, and obtaining finances under the conditions of a war-torn economy that had lost a part of its markets was no easy task.


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The economic policy-makers and the important figures in the field of finances and economics managed to steer the newly formed state through many perils. Let us not forget that before WW2, the First Czechoslovak Republic was among the few European democracies maintaining a strong economy based on a stable currency and low inflation. In the context of the 100th anniversary of the founding of the First Czechoslovak Republic, the organizers of the Bank of the Year competition (that KPMG has supported for two years now) have included a special category: Notable figures of Czechoslovak monetary affairs, 1918–2018. From a long list of notable candidates, the jury selected three very different winners. Jaroslav Praiss, undoubtedly the most notable figure of Czechoslovak interwar banking, received the most votes. Karel Engliš, a very complex personality who left a distinct footprint in economics, central banking, and academia, won second place. As a former member of the central bank, I was very happy to see the third place awarded to Jan Viktor Mládek who is probably the least known to the general public. Nevertheless, he was an internationally respected economist who played a role in the founding of the International Monetary Fund, though nowadays he is most often remembered as a patron of Czechoslovak art who started an extensive art collection together with his wife, Meda. And so, even though history does not repeat itself one hundred percent, it can be very inspirational, and we can only benefit from remembering the people whose contribution to the financial sector still plays an important role today. History doesn´t repeat itself, but it often rhymes. (ascribed to Mark Twain)

The interwar treasurer

Karel Engliš (17. 8. 1880 Hrabyně – 15. 6. 1961 Hrabyně)

After graduating from university, the young lawyer Karel Engliš began his career at the Statistical Office of the Kingdom of Bohemia where he worked as a clerk until 1904. He stayed there for four years before switching careers and becoming a member of the department of statistics at the Ministry of Trade in Vienna, where he worked until 1911. Since 1910, he had also worked at Brno University of Technology, first as an associate professor and then, from 1917, as a full professor of national economy. In 1919, he became a professor at the Faculty of Law of Masaryk University in Brno, later becoming its first Rector. He joined the political scene under the Austro-Hungarian Empire, working as a deputy for the People's Progressive Party in the Moravian Land Assembly, representing the same party as a member of the Czechoslovak National Committee in Prague. After Czechoslovakia gained independence, he joined the Czechoslovak National Democratic Party and served as a member of the National Assembly of the Czechoslovak Republic until 1925. In the 1920s, Engliš began his long-lasting career as a minister. He served as Minister of Finance from 1920 to 1921, from 1925 to 1928 and from 1929 to 1931, implementing budgetary and tax reform in 1927. At


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the start of the 1920s he was also a member of the Bank of Brno management and represented the banks of Moravia within the Association of Czechoslovak Banks. In the 1930s, he gave up his job as a minister and became a governor of the National Bank of Czechoslovakia, later leaving the office to become a board member of the Czech Industrial Bank. He later joined the board of Živnostenská banka. Over the course of the Second World War, Engliš returned to academia, becoming a professor at the Faculty of Law at Charles University in 1939, and its Rector in 1947. Nevertheless, even one of the most prominent economists of independent Czechoslovakia could not escape persecution brought by the unfortunate period of communist rule. Karel Engliš wrote many papers on economic theory, such as Národní hospodářství (The National Economy), Teorie státního hospodářství (Theory of the State Economy), and others. His works made him one of the most important Czechoslovak theoreticians of the national economy.

The forefather of the banking managers After graduating from Charles-Ferdinand University as a lawyer, Preiss participated in educational stays at the University of Heidelberg and at Leipzig University. In 1899 he became a founding member of a radical party “Státoprávně radikální strana” together with Alois Rašín, although he left the party just one year later and joined the Young Czech Party, later becoming a member of the Land Assembly. After that, he took charge of the national economy section of Národní listy (The National Newspaper). Preiss played an important role in rallying Czech businessmen. In 1902, an Association of Czech Textile Industrialists was founded following his initiative. In 1904, he joined Živnostenská banka, taking charge over the bank’s specialized magazine – Finanční listy (The Financial Paper). His next big success came soon after, in 1907, when he was tasked with creating a department for industry and mortgages within the bank, becoming a deputy of the bank’s managing director three years later. As a promoter of neoslavism, Preiss participated in the project aimed at creating a Slavic Bank in St. Petersburg. During the First World War, he was a member of anti-Austrian resistance and actively supported the boycott of Austrian “war loans”. His bold actions resulted in his arrest and a charge of high treason, but soon, Preiss was set free thanks to an amnesty and returned to Živnostenská banka as the managing director. In 1917, he became the first chairman of the Association of Czech Banks. After the First Czechoslovak Republic was formed, he was considered for the position of the Minister of Finance, but after the office was given to Alois Rašín, Preiss became his chief advisor on the matters of foreign exchange. Although Preiss received many different job offers, he remained the managing director of Živnostenská banka until 1938. Under his leade-

Jaroslav Preiss (8. 12. 1870 Přeštice – 29. 4. 1946 Praha)


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rship, the Živnostenská banka Group was created, uniting the most important industrial and commercial companies in Czechoslovakia, making Živnostenská banka one of the key governing centers of the Czechoslovak economy. Preiss also helped with the recognition of core Czechoslovak companies and with the “repatriation” of their capital that was up until then held by Austrian and Hungarian owners.

The world-famous banker who loved art

Jan Viktor Mládek (7. 12. 1911 Bochnia – 7. 8. 1989 Washington)

Governor's office, Czech National Bank (1937)

Another name on the list of famous bankers who studied law, J. V. Mládek first attended Charles University in Prague and later Masaryk University in Brno, deepening his economic focus at Vysoká škola obchodní (University of Business), then at the Sorbonne, and then at the University of Cambridge where he met John Maynard Keynes, among others. During the Second World War, he worked at the Ministry of Finance in exile lead by Ladislav Karel Feierabend where he was in charge of the monetary and banking department, working on a post-war restoration of Czechoslovak currency as well. In 1944 he attended the Bretton Woods Conference that lead to the establishment of International Monetary Fund and the World Bank. After the restoration of Czechoslovakia, he represented the Ministry of Finance within the interim administration of the National Bank (later renamed the National Bank of Czechoslovakia) and became the chief advisor to the Minister of Finance. In 1946, Mládek was made one of the twelve executive directors of the IMF and became a member of the Czechoslovak mission to the United Nations. After the communist revolution of 1948 Mládek resigned from his post as the executive director of the IMF and requested asylum in the USA, later becoming an IMF director in charge of the European and African department. While holding these offices, he made a significant contribution to stabilizing currencies around the world, including countries like Japan, Vietnam, Laos and Tunisia. He also actively participated in the efforts to restore democracy in Czechoslovakia, providing significant financial support to Czechoslovak exiles in the USA. Together with his wife, Meda Mládková, they built a large collection of Czech modern art.


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Oldtubering: senior citizens conquer social media


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Written by: Anna Batistová

“Kovy!” “Yes, definitely Kovy,” chime in the participants in the YouTubing class for seniors when asked about their favourite YouTubers. Hearing the name of the Czech YouTube star, I exchange an incredulous look with the photographer, Bára, but this is by no means the last surprise we get in the next three hours of visiting the Elpida senior education centre in Prague. “In the last 15 years, older people have made tremendous progress in computer literacy. The days of beginner computer classes are practically over. Now they want to learn about social media, tablets and, increasingly, smartphones,” says the director of the Elpida education centre, Jan Bartoš.

Elpida Elpida, meaning “hope” in Greek, is an NGO helping older people to become confident and respected members of society. In line with its motto, “Old’s Cool”, Elpida changes the perception of older age. It operates an education and cultural centre for seniors from all over Prague and a senior helpline, it has founded a brand, Ponožky od babičky (Socks from Granny), publishes its own magazine called Vital, and organizes a multigenerational festival Old’s Cool. Through all its activities, it strives to help Czech seniors live rich and happy lives.

Since she lost her husband last autumn, Helena, a former Czech language teacher, has been looking for a new direction in life. “I have always admired radio hosts. That’s why I signed up for the class. I would like to become a reporter and interview interesting people,” says the lively woman in her introduction. Former alternative medicine practitioner Jan, on the other hand, would like to make use of his life-long professional experience: “I want to make videos about my methods, like acupuncture, and share them with the world on YouTube.” Before moving on to the next participant, instructor Dušan Bitala jumps in because of the incessant beeping of messages and app notifications coming from everyone’s smartphones. “Let us all start by switching our phones to airplane mode, shall we?” Bitala admonishes the group of unbelievably technically savvy seniors. That is when I realize that I am probably the only one who has brought a paper notebook. With all the smartphones successfully pacified, it is Jarka’s turn. The petite, elegant blond women sitting in the front row says she wants to become a YouTube personality. The class bursts into laughter, but according to the instructor there is nothing to laugh about: “There are practically no older YouTubers in the Czech Republic, but YouTube has enormous potential. In the U.S., it’s nothing unusual for seniors to post videos and the most popular can actually make a handsome living.” Older YouTubers really have something to say Practically unknown in the Czech Republic, “oldtubering” is somewhat old news in the English-speaking world. Three years ago, The Teleg-


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raph published an article listing top YouTube personalities over 50. It featured 98-year-old Clara Cannucciari with her legendary cooking videos, The Great Depression Cooking, some of which reached more than 4 million views; autobiographical videos by “the grandfather of the Internet”, Peter Oakley, called Telling It All, some with almost 400 thousand views; three American “grannies”, or 3Golden Sisters, who regularly got together for lunch to discuss the latest topics trending on social media, exceeding 3 million views with some of their videos; as well as the Grand Illusions channel by British illusionist and toy collector Tim Rowett, who has more than 850 thousand subscribers. Even though all but the last one are no longer with us, their videos are still available online. Dušan Bitala says that for older people the chance to leave something behind is often the biggest motivation for making videos. “We’re all afraid of growing old and irrelevant. But older people have much experience and unlike many younger YouTubers they really have something to say. Everybody doesn’t have to publish their videos online, they can just chronicle their lives on camera, talk about their childhoods and what it was like in the 1960s, etc. After they die, these videos will remain as a keepsake for their children and grandchildren,” explains Bitala on why open a YouTubing class for seniors. Gradually, YouTube could become a great archive of people’s memories, featuring not only heroes like the Czech project Memory of Nations, but also stories of normal everyday lives. “The point is to teach older people to make videos and help them overcome their fear of technology, which can be a little overwhelming at first.” From meditation to dumplings When the group leaves the classroom to record their first videos, they seem to have no fear at all. The instructor passes on a few additional tips on how to securely hold a smartphone without blocking the microphone and where to look to speak directly to the audience. Then he divides the group into pairs, letting them try for themselves. We can hear the participants quietly discussing the task at hand: “Which filters will you use on Instagram?”, “Are we supposed to use the front or the back camera?”, “We’ll then share the videos with each other, won’t we?” In between recording sessions, I ask the participants how important YouTube is in their lives. Marcela, who said before that this was not her first class in recording smartphone videos, does not disappoint. “I watch YouTube videos quiet often: I listen to music when I work and watch films in the evening. One of my favourite YouTubers is Kovy and I also enjoy watching girls putting on make-up. And, of course, cooking videos!” She is definitely not the only one hooked on YouTube. Her classmate Jana adds that she watches a wide range of videos, from meditation to dumpling tutorials. Dušan Bitala believes that it is only a matter of time before someone in the Czech Republic realizes that older people are a group with huge potential, so far ignored by YouTube advertising. “As soon as an older handyman starts selling gardening

Year-long partnership between Elpida and KPMG As part of the year-long partnership, KPMG will provide the NGO with marketing support and audit the internal processes of the education and cultural centre for seniors. KPMG will also raise money for Elpida through its traditional employee Christmas collection.


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tools or something else that the target group can relate to, he’s golden.” Obviously, not all of the participants signed up for the class to become YouTube stars. Many simply want to keep up with the times, including Marie: “What I want is to understand the technology. I need to know the vocabulary. Before, I didn’t even know what YouTube and Instagram were and it bothered me. I’m grateful for whatever I learn.” Her classmate Vláďa has similar ambitions: “I joined the class mainly to learn what YouTube is all about.” Jan Bartoš, the director of the Elpida education centre, agrees that the main motivation for attending their classes is the desire to keep understanding the world and master the skills and knowledge of younger generations. “We help older people fill the gaps in their knowledge. As a result, they can keep up, be in, continue to be relevant in society and feel good about themselves. That’s our purpose.” However, Dušan Bitala secretly hopes that one day the Elpida YouTubing classes will produce a Czech “oldtubering” star. After this class, Elpida continues with a year-long video-making academy. “With a creative workshop every two weeks, we very much wish the participants will make vlogs that could be published on our social media. We hope to create a channel for seniors to vlog about their lives and experience, and share their highs and lows, as well as favourite recipes,” says the director of the Elpida education centre, Jan Bartoš. At the end of the class I wonder if Marcela and Helena consider joining the year-long YouTubing academy. “What do you mean consider? We already signed up at break!” they laugh. Elpida opened its first computer classes for seniors back in 2003. What is the difference between their computer literacy then and now? The needs and interests of older people develop hand in hand with technological progress in both hardware and software. Fifteen years ago, we taught what a mouse is and how to use it; then we moved on to how to set up an email account and write and send emails; today we meet before a class that teaches seniors how to record videos on smartphones and post them on social media. I think that’s a good illustration of the progress seniors have made when it comes to computer literacy.

Jan Bartoš, director of the Elpida centre, cultural manager, journalist and photographer cooperating with Elpida’s magazine Vital.

Does this mean that beginner computer classes are a thing of the past? The number of beginner computer classes is definitely dropping. Instead, we increasingly focus on social media, such as Facebook and YouTube, advance use of search engines, Skype, etc. We also used to have many more long-term courses, but their popularity is declining as well, because older people now have less time and don’t want to commit to longer courses. That’s why we’d rather organize individual classes on selected tablet and smartphone apps, for example, Google Translate, maps on tablets and public transport apps on smartphones. We offer seniors courses that target their weaknesses and meet their needs. Older people have also become much more assertive in the 15 years since we opened our first courses; they know very well what they want.


46

What specifically do seniors want to learn? The biggest draw are tablet classes. Since summer 2018, we have also met the growing demand for learning about smartphones, opening a number of longer courses as well as individual classes. We organize a series of two-hour classes devoted to various smartphone apps that can be useful for travelling, entertainment, cognitive exercises and other purposes. Interestingly, four years ago, we successfully responded to a similar trend of growing tablet use. Older people often got tablets as presents, but couldn’t use them. They knew from children or grandchildren that they were useful, but weren’t given any instructions on how to use them. Just: “Here you go, use it.” Family members usually lack patience to explain everything. That’s where Elpida comes in: our instructors have know-how, experience and the patience older people need. Do you know any graduates who also use modern technologies at work, not only as a hobby? Some of our participants still work part-time, so they can use technologies at work, but I don’t think it’s a majority. However, for most seniors technologies are not a hobby either. Their primary motivation is to know what everybody else seems to know and not to feel excluded. When people around you constantly discuss something you don’t know or understand, you feel left out. When someone tells you they’ll put it in an email for you and you don’t have an email account, what then? The same goes for tablets and smartphones. We teach older people what they need to keep up, be in, continue to be relevant in society and feel good about themselves. That’s our purpose. How computer literate are Czech seniors compared to their foreign counterparts? I think they can use technologies as well as any senior in the West. We’re definitely not behind. A few years ago Elpida hosted a meeting of European education centres for seniors where we also learned how well we do in terms of teaching and methodology. Often we served as a source of inspiration to others. Elpida offers many different courses and classes. How popular are computers, tablets and smartphones compared to other fields? The interest in these technologies is stagnating or decreasing. We see the biggest increase in languages, which now account for two thirds of our teaching. In the last five years, the number of English courses increased from six to thirty. There’s strong interest in learning languages, particularly English. The lower interest in computer classes comes from the fact that new retirees already know how to use them. That’s why they choose only the specialised classes I’ve mentioned. Active sixty-year-olds with zero computer experience are as scarce as hen’s teeth. Computer courses are our staple, but they’ll never be as popular as they were ten or fifteen years ago, when we opened a new beginner course practically every two weeks.

“Active sixtyyear-olds with zero computer experience are as scarce as hen’s teeth,” says Jan Bartoš from Elpida


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Encourage your family members to visit Elpida! Older people are often distrustful and afraid of new environments. Help them overcome their reservations and encourage them to visit Elpida. “Support and motivation from family members – children and grandchildren – can be a game changer,” says the director of the Elpida education centre, Jan Bartoš.

I assume women account for the majority of your clients. Isn’t that the reason technology-related courses are less popular? From our experience it’s almost exclusively women who want learn something new. There aren’t many men at our courses – fewer than 10%. One reason is that women live longer and after they lose their husbands, they are alone and want to go out. As long as both spouses are alive, they simply spend time together and are less motivated to attend courses. Another reason is that women are more sociable than men, who prefer to stay at home, watch TV or go to a pub. The third reason might be traditional gender roles. Older women have spent most of their lives cooking and raising children and had few opportunities to realize their potential. Free from their duties, they now want to compensate for what they’ve missed, unlike men, who’ve worked, built careers and had time for hobbies and beer with friends. Older men generally don’t feel they missed out on so much. How big is the role of senior influencers, like Jan Sokol who launched the project Senioři píší Wikipedii (Seniors Write Wikipedia)? Elpida often invites influencers, who are themselves retired, for talks and lectures – Jan Sokol, author Jiří Stránský, athlete Věra Čáslavská, Bishop Václav Malý, former evangelical priest and dissident Miloš Rejchrt, historian Petr Hora-Hořejš, to name just a few. The talks take ninety minutes and are packed with inspiration. That’s why we also interview such influencers for our magazine Vital. However, when it comes to computer and language classes, we prefer younger instructors. Seniors tend to learn better from them than from their peers. So far we have discussed courses offered by Elpida in Prague. What other centres are there in the Czech Republic catering to seniors? In Prague, there is, for example, Remedium and Život 90 as well as libraries which sometimes offer lectures for seniors. In regions it is, most notably, the library in Louny, which has a comprehensive programme for seniors comparable to a university of the third age, the Aktiv club in České Budějovice and the Totem education centre in Pilsen. We enjoy very good cooperation with all of them and can highly recommend them. Elpida opened its first computer classes for seniors back in 2003. What is the difference between their computer literacy then and now? The needs and interests of older people develop hand in hand with technological progress in both hardware and software. Fifteen years ago, we taught what a mouse is and how to use it; then we moved on to how to set up an email account and write and send emails; today we meet before a class that teaches seniors how to record videos on smartphones and post them on social media. I think that’s a good illustration of the progress seniors have made when it comes to computer literacy.


48

Does this mean that beginner computer classes are a thing of the past? The number of beginner computer classes is definitely dropping. Instead, we increasingly focus on social media, such as Facebook and YouTube, advance use of search engines, Skype, etc. We also used to have many more long-term courses, but their popularity is declining as well, because older people now have less time and don’t want to commit to longer courses. That’s why we’d rather organize individual classes on selected tablet and smartphone apps, for example, Google Translate, maps on tablets and public transport apps on smartphones. We offer seniors courses that target their weaknesses and meet their needs. Older people have also become much more assertive in the 15 years since we opened our first courses; they know very well what they want. What specifically do seniors want to learn? The biggest draw are tablet classes. Since summer 2018, we have also met the growing demand for learning about smartphones, opening a number of longer courses as well as individual classes. We organize a series of two-hour classes devoted to various smartphone apps that can be useful for travelling, entertainment, cognitive exercises and other purposes. Interestingly, four years ago, we successfully responded to a similar trend of growing tablet use. Older people often got tablets as presents, but couldn’t use them. They knew from children or grandchildren that they were useful, but weren’t given any instructions on how to use them. Just: “Here you go, use it.” Family members usually lack patience to explain everything. That’s where Elpida comes in: our instructors have know-how, experience and the patience older people need. Do you know any graduates who also use modern technologies at work, not only as a hobby? Some of our participants still work part-time, so they can use technologies at work, but I don’t think it’s a majority. However, for most seniors technologies are not a hobby either. Their primary motivation is to know what everybody else seems to know and not to feel excluded. When people around you constantly discuss something you don’t know or understand, you feel left out. When someone tells you they’ll put it in an email for you and you don’t have an email account, what then? The same goes for tablets and smartphones. We teach older people what they need to keep up, be in, continue to be relevant in society and feel good about themselves. That’s our purpose. How computer literate are Czech seniors compared to their foreign counterparts? I think they can use technologies as well as any senior in the West. We’re definitely not behind. A few years ago Elpida hosted a meeting of European education centres for seniors where we also learned how well we do in terms of teaching and methodology. Often we served as a source of inspiration to others.


49

Elpida offers many different courses and classes. How popular are computers, tablets and smartphones compared to other fields? The interest in these technologies is stagnating or decreasing. We see the biggest increase in languages, which now account for two thirds of our teaching. In the last five years, the number of English courses increased from six to thirty. There’s strong interest in learning languages, particularly English. The lower interest in computer classes comes from the fact that new retirees already know how to use them. That’s why they choose only the specialised classes I’ve mentioned. Active sixty-year-olds with zero computer experience are as scarce as hen’s teeth. Computer courses are our staple, but they’ll never be as popular as they were ten or fifteen years ago, when we opened a new beginner course practically every two weeks. I assume women account for the majority of your clients. Isn’t that the reason technology-related courses are less popular? From our experience it’s almost exclusively women who want learn something new. There aren’t many men at our courses – fewer than 10%. One reason is that women live longer and after they lose their husbands, they are alone and want to go out. As long as both spouses are alive, they simply spend time together and are less motivated to attend courses. Another reason is that women are more sociable than men, who prefer to stay at home, watch TV or go to a pub. The third reason might be traditional gender roles. Older women have spent most of their lives cooking and raising children and had few opportunities to realize their potential. Free from their duties, they now want to compensate for what they’ve missed, unlike men, who’ve worked, built careers and had time for hobbies and beer with friends. Older men generally don’t feel they missed out on so much. How big is the role of senior influencers, like Jan Sokol who launched the project Senioři píší Wikipedii (Seniors Write Wikipedia)? Elpida often invites influencers, who are themselves retired, for talks and lectures – Jan Sokol, author Jiří Stránský, athlete Věra Čáslavská, Bishop Václav Malý, former evangelical priest and dissident Miloš Rejchrt, historian Petr Hora-Hořejš, to name just a few. The talks take ninety minutes and are packed with inspiration. That’s why we also interview such influencers for our magazine Vital. However, when it comes to computer and language classes, we prefer younger instructors. Seniors tend to learn better from them than from their peers. So far we have discussed courses offered by Elpida in Prague. What other centres are there in the Czech Republic catering to seniors? In Prague, there is, for example, Remedium and Život 90 as well as libraries which sometimes offer lectures for seniors. In regions it is, most notably, the library in Louny, which has a comprehensive programme for seniors comparable to a university of the third age, the Aktiv club in České Budějovice and the Totem education centre in Pilsen. We enjoy very good cooperation with all of them and can highly recommend them.


Marwick - a magazine for clients and friends of KPMG Czech Republic, Pobřežní 1a, Praha 8. MK ČR E 22213. Subscribe to the online version at www.marwick.cz. Editor in chief: Michaela Raková Editors: Adéla Půrová, Dušan Benža, Štěpán Kačena Art director: Štěpán Prokop Photo editor: Barbora Mráčková Content and production: KPMG in the Czech Republic and Boomerang Communication The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2019 KPMG Česká republika, s. r. o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

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Marwick November/December 2019  

A magazine for clients and friends of KPMG Czech Republic.

Marwick November/December 2019  

A magazine for clients and friends of KPMG Czech Republic.