Berlin School: To open the panel, Cem Müller shared his first impressions of Deutsche-Telecom before he started his role there. It was quite a candid confession actually. Cem said he hated the idea of working for a legacy business and that “legacy kills innovation”. What are your thoughts on this and how do you think it reflects on the role and responsibilities of decision-makers?
Katja: I think he’s 100% right. This panel discussion actually took place after about three hours of lecturing from myself in front of the Berlin School class, and he totally drove the discussion down the same alley that we had in class. To put it mildly, legacy and innovation do have a very difficult relationship with each other. We’ve all experienced this. If you look at it from a more psychological or neuroscientific way, it seems natural. If you have legacy, then there is something that has been established and which is already working, either by you or your company. It’s something you can be proud of. And when we have something like this which we know to be secure, it’s possible to mentally go into a kind of ‘energy-saving’ mode. This security becomes your lifeline, especially in times of great change when there are so many insecure things coming at you. From a psychological and neuroscientific perspective, it’s been proven that the brain will try to save energy as much as possible. So, if the brain has something which works, for example, an established way of dealing with problems and processes, then the brain leans toward this. Once you have a pre-programmed way of doing things, you tend to repeat it. That's your lifeline. Obviously, innovation tries to break through this psychological pattern to make you do new things and to think in a different way. So, legacy does kill innovation. Or innovation kills legacy and in our minds, that can be very difficult.
Berlin School: It’s interesting that you can draw such a direct parallel between companies and individual mindsets. And it’s something that Cem pressed on in this presentation – the importance of having different kinds of people on board, and particularly having leaders who will defend the need for change. He said you need to “find allies – the people who love to do what you hate.” But he also mentioned that these ideas can often get diluted behind the closed doors of the boardroom. Is this something you experience often in your work?
Katja: I work with businesses every day, and in the end, businesses are people. They are employees, managers and executives. If you look at business challenges and particularly transformation from a psychological and neuroscientific perspective, it becomes clear why it’s so difficult for change measures to be adopted by middle management. Their whole social capital relies on legacy, so from a human perspective, I totally understand the resistance to change.
Berlin School: What is the risk if a legacy business isn’t prepared to face that discomfort and recognise the need for innovation?
Katja: Well, the risk lies in the fact that legacy reflects the past. In such dynamic times as these, the past doesn’t really give any indication of how the future is going to be. What held true 20 or 30 years ago, things that we can extrapolate from the past do not necessarily hold true in the future. There’s no way we can use the past to predict the future anymore. So, if we’re not breaking through this legacy-focussed way of doing things, we won’t be able to face new conditions and challenges.
Berlin School: Cem also talked about three things that are crucial to driving innovation – attitude, assets and knowledge. How do you feel about this equation?
Katja: On this topic, I agree with one third of his points – the attitude! In my opinion, assets and knowledge are too close to legacy. If you think you know, then you are not necessarily open to new ways of thinking. You can be too vested in your own knowledge and assets. Sometimes, even with my clients, I say (jokingly) that the industries that deal in being 'right' are the ones that do worst at transformation. In industries like media and law, where knowledge is the asset, it can be very challenging when things change and their knowledge is devalued. But attitude will always be crucial.
Berlin School: Daniel Simon from Aperto spoke about IBM IX’s attitude towards innovation through the value that they have placed on education and empowering their employees, in fact, making it obligatory, to educate themselves using their AI learning platform. Do you see a positive shift in how large organisations value education or is there still a long way to go?
Katja: Companies are very dissimilar in their approaches to new knowledge and education. In my experience of working as a Strategic Consultant in a consultancy environment, I saw a huge amount of work being done around learning and education. But so far, I have never seen this be the case to this level in any of my clients or in other roles that I’ve had. If you are selling knowledge, then you have to be extremely focused on building the knowledge of your people, which is the case both at Aperto and at IBM IX. They are selling knowledge so they have to be open to education. They can only get out what they put in. We can relate to this in my work and I’m sure you can at the Berlin School.
Berlin School: What about in other industries, where knowledge is less of a USP?
Katja: If you look across other industries, on average, yes, I do think that education has become more important. This is due to the fact that times are changing so fast. Not everyone, but nearly everyone has come to understand that the last 20 years will not be comparable to the last 20 years. You need to equip your people for this. Secondly, our demographic is very different than we used to have before. When variables change, good employees become very scarce. You don’t find everything you need on the market, so you have to train them yourself. The third factor, and it’s something that’s still in its infancy, is making this new knowledge-building a realised and implemented part of our employees’ day-to-day. From my perspective, this means devising new formats, be it online or offline, to integrate new knowledge in to the day-to-day work. Otherwise, it doesn’t stick. And without this, the company cannot change.
Berlin School: Henkel was the third company we focussed on at the panel. This was an interesting one to end on as it’s certainly a legacy giant and probably seen as quite set in its ways from a consumer point of view. Moritz Klämt talked about the key role of marketing in the “learning journey” of consumer behaviour. To quote Moritz, “in the past the key question for marketing was to ask ‘Would you be interested in this product?’. Now, it’s really all about observing real behaviour patterns and to use that data to drive innovation. We are still selling products and services but we have to learn to use data differently and think beyond the silos we’ve learned.” What are the most important things a brand should be asking from an agency or a creative team to maximise customer-centricity and drive innovation?
Katja: I have a very blunt answer to this question. Be humble. To have something that really adds to your customers’ lives is all about being humble. It’s about finding that creative or product or service that provides a solution, that just solves the problem for the consumer. It does not win any awards – well, it might – but at its essence, it is first of all simply doing its job for the consumer. That’s the blunt answer. On the other hand, there are a lot of actors involved in customer centricity. What really resonated with me in Moritz’ presentation was the holistic view that marketing employed at Henkel. It seemed to me that Moritz is implementing a very broad approach to marketing, taking responsibility for the whole topic of ‘doing the laundry’ as it relates to the real lives of their customers. It’s not just about selling products or the latest detergent. He was mentioning a lot of different approaches from their content management system with its stain-solving chatbot, their investment in zip-chat, and their laundry delivery and collection services. This shows me that they’re really passionate about the customers’ challenges and lives. No customer is passionate about the job of ‘clean laundry’ so it’s great that Henkel is passionate about this.
Berlin School: After hearing all three speakers, what were some of your last takeaways from the discussion?
Katja: The highlight for me was actually hearing the Henkel story of customer-centricity. But I also really appreciated Cem’s openness and candidness in talking about the difficulties of innovation in a legacy company in that he really described how long things can take. It totally reassured me. My luxury but also my curse is that I’m subject to my own standards when it comes to speed and progress. Sometimes I need to recalibrate. And this really put that into perspective for me.
Berlin School: All of these scenarios can only be tackled by empowering the right creative leaders. In fact, you moderated this discussion in front of a whole classroom creative leaders looking for guidance and looking to be empowered. Why is creativity so important in leadership today?
Katja: Of course, there are many definitions of creativity. But my definition of creativity is about finding new ways. It’s not about being beautifully designed. It’s about finding new ways to do or solve or communicate something. If we’re sticking to what I said at the beginning, and saying that the next 20 years will not be comparable to the last 20, then of course as leaders, our mandate is to find new answers to new situations and challenges. It’s not going to be enough to apply what you’ve already learned. That’s important when it comes to innovating outwardly. But it’s also important to look inwards. We know that oftentimes, established leaders are not at ease with the new demands of young employees. The leadership skills that they learned – command and control – doesn’t work anymore. So, once again, you have to find new ways to answer the market-demands. And that is creative leadership.