On Innovation and Digital Technology. Interview with Rahmyn Kress
“Corporations can have the best technology, the best digital infrastructure, but if they cannot excite people to work with it and to see it not only as a tool, but a vehicle for innovation and development that can massively empower the greater vision of the company they are part of, technology will only reach half its potential.” –Rahmyn Kress
I have interviewed Rahmyn Kress, Chairman of the Digital Executive Committee at Henkel, and founder of Henkel X, an open-innovation platform accelerating Henkel’s entrepreneurial transformation.
RVZ
Q1. We are seeing a new wave of disruption through digital technology. What are the main challenges and opportunities?
Rahmyn Kress: I personally think the biggest challenge of digital disruption is not finding and implementing new technologies, but rather familiarizing employees with them so they will accept the change.
Corporations can have the best technology, the best digital infrastructure, but if they cannot excite people to work with it and to see it not only as a tool, but a vehicle for innovation and development that can massively empower the greater vision of the company they are part of, technology will only reach half its potential.
That is why it is so important to link the topic of digitization with something positive and make it come alive through dialogue and interaction.
We, at Henkel X, are doing this through various activities: Our CDO+1 lunch takes place every two weeks and gives employees the opportunity to ask questions about recent trends, disruptive technologies and Henkel X projects. We also introduced our Henkel X App, which is filled with curated content and offers an opportunity to chat with coworkers from around the world.
Furthermore, we launched our Digital BaseFit initiative to provide employees with the basic digital knowledge they need to know today. And there is also the opportunity to attend our Show & Tell events where startups pitch their ideas to Henkel – a total of 12,000 participants from various backgrounds in Henkel have dialled in or attended the events in person. All these initiatives make it much easier for us to address new technologies and issues.
Q2. You have founded ” Henkel X”. Can you please explain how it works?
Rahmyn Kress: When Marius (Swart) and I founded Henkel X in February 2018, we designed it not only to accelerate Henkel’s entrepreneurial transformation, but to provide an open innovation platform that could act as a catalyst of industrial change, drive innovations and create disruptive business models for the whole industry. In order to do that, we established and operate several impact driven programs for its members based on three pillars: The biggest value lies in our Ecosystem integrating a strong, diverse network of partners and experts sharing knowledge, views and ideas. On top of that we create Experiences, that means we organize and host events to foster collaboration and innovation, and finally we facilitate Experimentation to boost new ways of working and building minimum viable products (MVPs) fast, in an agile environment.
Q3. How do you create a curious fail fast culture in the enterprise?
Rahmyn Kress: Through the establishment of Henkel X we are trying to introduce a culture that enables employees to generate ideas, act quickly and thus achieve rapid success – or fail fast. We really try to create a vibrant field for experimentation and encourage our business units not to shy away from contact and cooperation with startups. This approach carries the risk of failure, but other paths can quickly be taken so that the teams can implement their projects successfully in the shortest possible time. As Steve Jobs once said: “Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.” Speed and the willingness to fail are key in order to drive digital innovation and stay competitive in the market.
Q4. Isn’t this culture dependent?
Rahmyn Kress: Yes, it totally is. And it is one of the most difficult points in the digital innovation process. In order for corporates to adapt to the new technologies we definitely need to cultivate a stronger trial and error mentality. In digital innovation, for example, Germany lags five years behind the United States – even though, among all European countries it is Germany in particular which has a huge amount of potential: outstanding tech know-how, financially powerful brands and corporations, and a large number of globally leading research institutes focused on new technologies and digitization. We should make use of these resources – and with Henkel X that’s precisely what we’re doing.
Q5. What are the main lessons you have learned while working at Accenture and Universal Music?
Rahmyn Kress: As the EVP of Physical and Digital Transformation, Supply Chain and Operations at Universal Music Group I quickly built a wealth of experience in digital transformation, just as the first wave of disruption hit the media industry. It was an early wake-up call that taught me how to pivot and adapt in an industry entering the early stages of change. Initially, digital only accounted for a small percentage of the music industry’s total revenue, but it suddenly became clear that if digital continued to prevail then manufacturing and logistics would become a commodity. I am not suggesting for one second that this is true for consumer goods, but we have so many examples of rapid change that the signs of digital transformation must be taken very seriously. This mainly affects how we handle products and the way we orient ourselves towards services instead of products. I saw this during my time at Accenture as well, where I created and essentially optimized digital supply chains and helped large corporates in their efforts to pivot their business towards the digital transformation.
Q6. What are your current projects as Chairman of the Digital Executive Committee at Henkel?
Rahmyn Kress: I see myself as a catalyst who strengthens the entrepreneurial spirit and questions existing structures and processes: To make our internal digital upskilling program as effective as possible, for example, we created a digital glossary that ensures we speak a common language. Also, my team put together the digital technology stack to help us communicate with our audience that is using the Henkel brands and products. By having a common architecture throughout the organisation we can move faster when it comes to adaptation and enhancements going forward. Most importantly, we have the opportunity to capture data that we can later extract value from – be it in supply chain optimisation or understanding emerging customer and consumer trends.
But our efforts in rolling out the digital transformation don’t stop here: As Henkel X also operates as an open innovation platform we initiated Henkel X Partners, a network forum during which we bring local entrepreneurs, industry partners, VC’s, influential family businesses, startups, and thought leaders together. As collaborating partners they form part of our ecosystem which we intend to grow and strengthen across Europe. Last month, for example, we launched Henkel X Partners in Barcelona to extend the Henkel X activities into Spain and build this regional extension. In October we are going to do the same in Milan in close cooperation with Bocconi.
Q7. You have set up a priority to accelerate digitisation in your company. What are the main stumbling blocks, since you are not Google?
Rahmyn Kress: The biggest challenge does not lie in digitisation itself, but in how we use it to change the way we work and the way we do business, and in what new business areas and models we are developing. We have to think long-term and as a visionary. This means asking ourselves, for example, “Will there be any washing powders and adhesives as we know them today at all in the future,?”, “Will this still be our core business?”.
In order to find the right answers and move forward in the right direction, I think in three different dimensions, which can be seen as three interconnected horizons: Horizon 1 focuses on the constant optimisation of the core business through digital technology to fund the growth of the incremental innovation. Horizon 2 is about transforming and finding new business models. Perhaps in the future we will sell washing powder like coffee capsules?
Nowadays, we are still talking about our ‘traditional products’, which may be consumed completely differently in the future. And this brings us to Horizon 3 which is about actual disruptive innovations – the so called ‘moon shots’. Here, completely new business models are conceivable. The most important thing is to engage in all three horizons at the same time. Therefore each organisation needs to decide for itself, how much it wants to invest in each of them by taking into account the challenges, opportunities and threats in the marketplace, as well as the respective digital maturity.
Q8. You are a member of the World Economic Forum for the “Platform Economy“. What are the key insights you have gained out of this activity?
Rahmyn Kress: We are moving from a product focused to a much more platform focused world. Platform business models have higher barriers to entry, but once they’re established and operating, they are very difficult to compete against. Many organizations struggle with the rate of external innovation, they feel they can’t keep up. That is why they need to start thinking more about ways to collaborate together than how to compete with each other. Business as usual is a thing of the past: It is no longer big versus small, but rather slow versus fast – economic platforms are a promising answer to this ongoing shift.
Q9. Artificial Intelligence is on the rise. Is AI part of your strategy, and if yes, can you please explain what do you expect out of AI?
Rahmyn Kress: We see AI as an essential part of our strategy. Just recently, we entered into a partnership with Cognition X to make AI adoption more efficient and to drive transformation. Henkel X will use Cognition X, a fascinating AI news and advice platform, to engage with the Henkel X community through information, and to provide a network of expertise and knowledge around the deployment of artificial intelligence. Furthermore, we will start to roll out the Enterprise Edition of CognitionX’s AI Advice Platform, to access a Wiki of AI products. AI is great and we should make use of it!
Qx. Anything else you wish to add.
Rahmyn Kress: It is definitely time that we start to consider our industrial peers as business partners instead of competitors. Of course, there are areas of rivalry, especially in relation to products. But when it comes to innovation, we should work, think, and develop together. Here we can also learn from the music industry which demonstrates how important common platforms are. Digital transformation is a joint responsibility and our goal should be to enhance future growth, build reliable ecosystems across our value chains and drive digital innovation forward. What we need are places, digital or physical, to exchange and discuss ideas to hit our targets before others do – that is exactly what Henkel X aims to achieve.
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Dr. Rahmyn Kress is Chairman of the Digital Executive Committee at Henkel and founder of Henkel X, an open-innovation platform accelerating Henkel’s entrepreneurial transformation.
Previously, he was President and CEO of DigiPlug, a tech company acquired by Accenture. Kress then joined ACCENTURE Ventures as their lead for Europe, Latin America and Africa.
Today, Kress is an active member in the venture capital and start-up community as mentor and angel investor and a member of several executive advisory boards, including the World Economic Forum Platform Economy advisory board.
Most recently, he founded thebeautifulminds.club an initiative that is uniting entrepreneurs, artists, business leaders, investors and strategists to create awareness and provide support around neurodiversity like ADHD and dyslexia to be recognized as unique skills in an entrepreneurial world.
Resources
World Economic Forum for the “Platform Economy“
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On Digital Transformation, Big Data, Advanced Analytics, AI for the Financial Sector. Interview with Kerem Tomak, ODBMS Industry Watch, 2019-07-08
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