There’s no one way to tackle digital transformation, says Rahmyn Kress, chief digital officer at Henkel. Every business needs to find its own journey.
No-one is doing digital transformation particularly well, Kress told a dmexco audience (Cologne, September 2018). He scored his own organisation at two on a 1-5 scale while maintaining that “five does not exist”; even four would be “incredibly ambitious”, he suggested, although he went on to score Henkel at four on its acceleration of digital transformation.
“As things evolve, you have to evolve with them,” he explained. “You have to find your own digital transformation journey, which relates to your product, to your customer base and the journey that is taking place there.”
Henkel’s own product and customer base ranges across several categories, including Laundry & Home Care, Beauty Care and Adhesive Technologies, making transformation anything but simple.
And aside from a diverse product range, companies in a fast-changing environment face problems in understanding what is the benchmark, Kress added. Some businesses may have progressed quite far, particularly with regard to marketing activity, but he wondered how sustainable this approach really is.
“If you start a little later you have the benefit of looking at how the market moves,” he argued. “You may actually end up being a game changer” as you leap-frog the early movers.
“Every digital transformation needs to start with the people first,” he said. “It’s a cultural change that employees need to go through. And you need to help, to encourage, to give trust: there’s a lot of new things happening.”
To assist in this cultural change, Henkel has set up a new operating unit - Henkelx - which aims foster digital upskilling across the entire organisation. “[We] try to find those cases that work really well, share those experiences where something hasn’t worked; to learn from one another is paramount,” he said.
Henkelx is based on three key pillars:
- Ecosystem: an open innovation platform integrating a strong network of partners and experts from startups and entrepreneurs, to retailers and industry peers, and universities – supported by a group of mentors,
- Experience: interactive events and formats fostering collaboration and innovation,
- Experimentation and Acceleration: new ways of working in an agile environment.
“What is significant is the response you’re getting in the marketplace, because open collaboration and sharing between corporate companies, and learning from what start-ups have done well - that’s phenomenal if it’s really meant and you can get value out of it,” said Kress.
Partnerships are essential, he insisted. “I don’t believe anyone can do it alone, there’s too much out there. We need to do these things together.”
But he distinguished the Henkelx approach from that taken by other businesses, saying it was neither an incubator nor an accelerator “I haven’t seen many accelerators work,” he remarked.
“We want to open-innovate on topics that concern all of us. There are some parts which would be non-competitive (e.g. blockchain) … and where it becomes competitive you part and do your own thing.”
When Henkel partners with a start-up, it makes clear it doesn’t want to just invest cash in it but to give it respect by investing time, data and effort. For many such small businesses, said Kress, it’s more valuable for them to tap the expertise and capabilities of a big company. “We can try things out together and ultimately they can say, ‘hey, we’ve been working with Henkel’ before doing the first round of diluting their business.”
On the issue of talent, Kress was optimistic, unlike many who worry that the US tech giants are stealing the best. “We don’t struggle finding people,” he said. “I think there’s an enormous amount of talent out there.” For him the issue is less about technology than the ability to solve problems.
At the same time, he noted that technology has made it easier than ever to produce and market products. That means that brands become more important, he argued, because they have to stand for something, whether that’s “cool, hip, lifestyle - or cleanliness”. It’s also important to understand that the customer is “dynamic” with changing tastes. “How can you follow them on their need state at every point and deliver value.”
He also questioned “whether a future of pure marketing and advertising is the right model; or whether data serves to answer customer demands in a better way - faster learning on the products, desirability, changes in the marketplace and therefore adapting your product, services and need states.”