Rahmyn Kress is Chief Digital Officer and Chairman of the Digital Executive Committee at Henkel, a 142-year-old maker of chemicals and consumer goods headquartered in Dusseldorf, Germany. Prior to joining Henkel, Kress was managing director of technology ecosystems and ventures at global consultancy Accenture. Kress also served as the CEO of Digiplug, a digital technology company in Paris acquired by Accenture that provided digital services to the world’s largest media giants. Earlier in his career he was executive vice president of physical and digital transformation, supply chain and operations at Universal Music Group. He first gained experience in dealing with exponential change while there, when the first wave of digital disruptions hit the music industry. He recently spoke with Jennifer L. Schenker, The Innovator’s Editor-in-Chief, about Henkel’s digital transformation.
Q: You joined Henkel 17 months ago to lead its digital transformation. Where are you on the trajectory?
RK: I think the better way to frame it is to ask ‘what are the goals that have been set for the journey? And are we executing well and at the right speed?’ The first phase of our digital transformation is structured around three core pillars. The first is digital technology. There the question is ‘Do we have the right tools and capabilities to drive our business forward?’ The second pillar concerns our ability to become a more data-driven organization. Are we able to run analytics effectively to have the right visibility on our operations? Can we create digital experiences for consumers and our business partners in B2C and B2B and B2B2C environments? The third pillar centers on digital innovation and our overall strategy. How do we build innovation and eventually transfer this to our business units? One of the things that is very important to understand is that Henkel has three different business lines: adhesive technologies, beauty care and laundry, and home care. In all of the business units we have to look at the maturity of the technologies but also the skill sets of the individuals driving the businesses. In the short term the goal is to act as a catalyst of change and use the entire activity as an upskilling exercise.
Q: Have you been able to put the right technologies in place?
RK: We agreed across the group at the beginning of the year on the initiatives we would be launching. We selected our global partners for digital technology and data analytics and after that we issued tenders to the market and we started implementing the digital architecture that will get us to where we want to be. That is an ongoing process, a process that you need to continuously fine-tune because technology is always changing. When you deal with data analytics the most important thing is not the data itself but what are the problems you are looking to solve. What is the data you require to support your hypothesis? We started that process at the end of 2017. We are now working with our partners on extracting data out of our organization and are ready for our first proof-of-concepts. We have aligned the processes, the governing structures and the operating model across the group globally. So we are at the moment where we have ideated and built, we have tested and now — at the end of the quarter — we can transfer responsibility for digital tech and data analysis as well as the digital experience for marketing and customer engagement over to all of the business units. It is a tremendous achievement in a relatively short period of time.
Q: What about change management?
RK: Digital innovation and the strategy around it is a core initiative that any organization needs to do to transform itself. It is about a mindset shift. Many corporates try copying a model where they say ‘we want to act like a startup.’ That is just impossible. Large corporates, while they are undergoing the digital transformation process, have legacy businesses that need to be run and daily challenges that need to be overcome. That doesn’t mean they can’t take what works very well at startups and identify how to obtain an innovation culture by following their own path. That is what led to my thinking in creating Henkel X in February.
Q: What is Henkel X?
RK: Henkel X is an open innovation platform that distinguishes itself by being very open to collaboration with a number of different players. It is about dropping the guard rail and working and collaborating with others. That is one of the biggest changes for an organization — the shift from thinking about products to thinking about services and marketplaces. To stop thinking about competitors and start thinking about collaboration and peers. Henkel X helps us to achieve that through three ‘e’s’: it is about creating an ecosystem; it is about creating experiences to foster new ways of thinking, and different types of activities and formats that foster innovation; and it is about experimentation, i.e. new ways of working. From those three pillars we are building a number of different products and programs.
Our Henkel X Mentor program is one of the areas. The members of the Henkel X mentorship club are the brightest minds in entrepreneurship and industrial thought leadership with diverse backgrounds. Mentorship Days offer a unique chance for our internal colleagues to discuss entrepreneurial ideas with these mentors, get their advice on a current business challenge or have an exchange on any digital topic that they are currently facing. We attracted over 100 mentors in only three months. For our first mentorship day one-third of the mentors flew in from all over the world and Henkel employees from all different levels got to talk and share experiences with them. In addition to the mentorship club we have also introduced partnerships with academic institutes of entrepreneurship such as ESCP, a top business school in Europe, which allow us to present business challenges which the faculty then take on board. We will have further partnerships in Europe and the U.S. to announce soon.
We are a founding partner of acelerateHER, an initiative in which males in leading positions step up to encourage more women in technology. I have been very privileged to be elected to become an active member of the World Economic Forum’s platform economy initiative that focuses on the importance of that for Europe and its businesses and its overall future economy.
We have partnered with the Founders Forum to bring — for the first time — their conference to Germany to encourage founders and C-Suite executives from big corporates to work together. Our ‘experience’ initiatives include regular fireside chats and briefings with mentors and industry leaders. So far we have had seven, and from there we have launched 18 ongoing live projects in which our business units are working together with startups to build proof-of-concepts. We have launched our first live version of the Henkel app which our employees can access on their mobile phone and tablets for daily news or information on innovation topics and we have done a number of other things that allow us to get digital feedback from our employees.
When it comes to experimentation we are working with H-FARM [a global innovation hub on the outskirts of Venice, Italy that combines innovation, entrepreneurship and education]. H-FARM allows us to tap into a global network of startups and it gives us a place — outside of our own environment — to go with our partners and employees to innovate cooperatively and build MVPs [minimal viable products], new business opportunities and services. It helps us install a mindset of build, measure and learn.
Last, but certainly not least, I have taken over the responsibility of driving the Henkel venture business, together with the business units, to look at what does venture really mean for a corporate and set the right level of expectations.
Q: Where do you go from here?
RK: My focus will shift in 2019 to future opportunities in marketplaces and platforms, in deep tech and in new digital technologies with a focus on retail B2B2C and B2C environments that are not asset-based. To make that plain it will be all about, on a daily basis, how to identify areas that could disrupt Henkel’s business as we know it today. My job as CDO will be to become the Chief Disruption Officer so that instead of being disrupted we can anticipate and build and invest in new areas and turn the threat of being disrupted into a proactive ‘innovate or disrupt from within’ culture.
Q: What advice do you have for other corporates?
RK: No matter how visible it is for those of us who have been involved in digital transformation for a while, you should never underestimate that it is still very new to many and therefore you should not ignore the fear and discomfort of people. It is very important therefore to be very plain spoken in your communications and inclusive. It is paramount to bring as many people on board as possible. The second point is that the biggest and the most important part of digital transformation is culture and the cultural change required, which includes different ways of working and giving more responsibility to individuals so that they really feel empowered to make a difference and be a part of the change.