1 00:00:08,480 --> 00:00:11,600 Hey everyone, Ben here. Welcome to another episode of 2 00:00:11,600 --> 00:00:14,560 the Cellarwork podcast, this time with Philip Goode. 3 00:00:15,320 --> 00:00:18,880 Philip has been Chief Technology Officer at retail since October 4 00:00:18,880 --> 00:00:21,600 2022. Retail is the world's leading 5 00:00:21,600 --> 00:00:24,440 provider of enclosures, Power Distribution, climate control, 6 00:00:24,520 --> 00:00:27,560 IT infrastructure, as well as software and services. 7 00:00:27,760 --> 00:00:30,160 In his role, Good heads the research and development 8 00:00:30,160 --> 00:00:33,440 division and drives the company's innovation strategy, 9 00:00:33,520 --> 00:00:36,560 particularly by integrating mechanical product development 10 00:00:36,560 --> 00:00:39,160 with software engineering digital support processes. 11 00:00:39,480 --> 00:00:42,280 We talk and cover all the transformation things that are 12 00:00:42,280 --> 00:00:44,760 going on at retail. So stay tuned. 13 00:00:44,920 --> 00:00:48,600 Let's go. Hey Philip, welcome to the Cell 14 00:00:48,600 --> 00:00:51,720 Work podcast. Thanks for having me. 15 00:00:52,200 --> 00:00:55,560 Of course, of course. First of all, for everyone who 16 00:00:55,560 --> 00:00:58,600 does not know you yet, let's start with a quick introduction 17 00:00:59,000 --> 00:01:01,440 of who you are. Yeah, yeah. 18 00:01:01,440 --> 00:01:03,280 Hello, everybody. I'm Philip Goode. 19 00:01:04,360 --> 00:01:07,600 I'm the CTO of Retail International, responsible for 20 00:01:07,600 --> 00:01:11,760 R&D and quality management here in Harborne, in the middle of 21 00:01:11,760 --> 00:01:15,040 Germany. What is Harborne doing? 22 00:01:15,480 --> 00:01:16,960 What is retail doing? Sorry. 23 00:01:19,080 --> 00:01:22,640 Yeah, Retail is well known for it's electrical enclosures. 24 00:01:22,640 --> 00:01:26,440 We produce quite a few of them per year, 4 million in different 25 00:01:26,440 --> 00:01:28,880 sizes. Yeah, to enclose electronic 26 00:01:28,880 --> 00:01:32,080 equipment mostly in automation systems, but also in energy 27 00:01:32,080 --> 00:01:34,960 distribution. And along with the cabinets 28 00:01:35,040 --> 00:01:38,560 comes also cooling solutions because usually electrical 29 00:01:38,560 --> 00:01:41,600 equipment produces waste heat that needs to be removed from 30 00:01:41,600 --> 00:01:44,360 the enclosure. So we are producing roughly 31 00:01:44,800 --> 00:01:47,920 quarter of a million cooling units mainly for electrical 32 00:01:47,920 --> 00:01:51,080 enclosures in industrial applications, which is basically 33 00:01:51,080 --> 00:01:55,040 an air conditioner for that enclosure, but also for IT, 34 00:01:55,880 --> 00:01:59,680 which is then usually not an air conditioner as as known from 35 00:01:59,680 --> 00:02:04,040 from cars or home appliances, but rather run with cold water 36 00:02:04,040 --> 00:02:07,680 in most of the cases. On top of that, we have a 37 00:02:07,680 --> 00:02:10,360 portfolio of electrical Power Distribution systems. 38 00:02:10,360 --> 00:02:13,120 So that's copper bus bars in different sizes for different 39 00:02:13,120 --> 00:02:17,520 amperages starting from low amperages, which is in our case 40 00:02:17,920 --> 00:02:22,520 a couple of 100 amperes up to a couple of 1000 amps that we need 41 00:02:22,520 --> 00:02:26,680 to distribute. On top of that, we have in our 42 00:02:26,680 --> 00:02:30,160 group also a software business which is E Plan, the leading 43 00:02:30,160 --> 00:02:35,920 manufacturer of an E cat system which you know helps customers 44 00:02:35,920 --> 00:02:39,800 to build electrical enclosures and electrical systems, 45 00:02:39,800 --> 00:02:42,960 automation systems. We have a machine to 46 00:02:42,960 --> 00:02:46,840 manufacturer which helps our customers to machine the 47 00:02:46,840 --> 00:02:50,800 enclosures to produce cut outs, but also to bend copper bus bars 48 00:02:50,800 --> 00:02:53,640 in in the distinct shapes that are needed. 49 00:02:54,400 --> 00:02:59,080 So basically retail has started from being a product company to 50 00:02:59,600 --> 00:03:02,200 being nowadays more of a solution company. 51 00:03:02,640 --> 00:03:06,800 And also being part of the Freedom Law Group with many 52 00:03:06,800 --> 00:03:08,360 different companies within that group. 53 00:03:08,360 --> 00:03:13,000 Can you give us rough idea of the scale of the whole group and 54 00:03:13,000 --> 00:03:18,920 retail as part of it, like the number of employees? 55 00:03:22,840 --> 00:03:26,880 Yes. So the Free Time Law Group has a 56 00:03:27,360 --> 00:03:29,960 global turnover of roughly €3 billion. 57 00:03:31,000 --> 00:03:35,000 The biggest part of that is is retail, which is €2.6 billion. 58 00:03:35,400 --> 00:03:40,760 The group has 12,000 employees. Retail as the biggest daughter 59 00:03:41,280 --> 00:03:47,920 company has 9000 of them. You can find us worldwide in I 60 00:03:47,920 --> 00:03:52,000 believe 60 plus countries with own subsidiaries. 61 00:03:52,000 --> 00:03:55,720 And if we're not represented on our ourselves, we usually have 62 00:03:55,800 --> 00:03:58,240 dealerships that also resell our products. 63 00:03:59,200 --> 00:04:02,440 And it's also a company that is over 60 years old. 64 00:04:02,440 --> 00:04:04,320 Is that correct? Yes. 65 00:04:04,400 --> 00:04:09,120 So it dates back to over, yeah, more than 60 years ago starting 66 00:04:09,760 --> 00:04:13,320 yeah, as a sheet metal metal manufacturer and now being 67 00:04:13,640 --> 00:04:19,160 quite, quite big private owned company that is yeah, as I 68 00:04:19,160 --> 00:04:22,280 described in in many applications with many different 69 00:04:22,280 --> 00:04:25,800 products and technologies serving all kinds of different 70 00:04:25,800 --> 00:04:28,480 industries. So very well diversified 71 00:04:28,560 --> 00:04:31,920 globally, very well diversified also in different industries and 72 00:04:31,920 --> 00:04:35,480 verticals. Working with you, prior to our 73 00:04:35,480 --> 00:04:39,600 recording, we were always talking about the topic of 74 00:04:39,600 --> 00:04:43,560 transformation and making Richard fit for the future. 75 00:04:44,080 --> 00:04:48,520 And I want this episode to be a bit about your perspective on 76 00:04:48,520 --> 00:04:53,360 transformation, talking a bit about the specific case within 77 00:04:53,360 --> 00:04:57,560 return. So maybe can you give us a quick 78 00:04:57,560 --> 00:05:01,360 heads up on what kick started this idea of, oh, we need to 79 00:05:01,360 --> 00:05:03,080 transform? Was there a certain event? 80 00:05:03,080 --> 00:05:05,480 Was there a trigger from the outside? 81 00:05:05,480 --> 00:05:07,560 Was it from the inside? How did that all started? 82 00:05:09,280 --> 00:05:14,120 Yet I, I guess it was, it was not an event a, a trigger as 83 00:05:14,120 --> 00:05:17,440 such, but it's a, it's an evolution of a company, right. 84 00:05:17,720 --> 00:05:22,320 So typically if you, if you look back 60 years, the world was 85 00:05:22,680 --> 00:05:27,680 much simpler, products were much simpler, regulatory requirements 86 00:05:27,680 --> 00:05:32,240 were much lower and the world was was just easier to deal 87 00:05:32,240 --> 00:05:35,840 with. And in the course of the 60 88 00:05:35,840 --> 00:05:40,360 years, of course the the world has evolved, competitors have 89 00:05:40,400 --> 00:05:44,160 have arised, requirements of the customers are getting more 90 00:05:44,160 --> 00:05:46,840 complex. So having only products isn't 91 00:05:46,840 --> 00:05:49,000 longer sufficient. You need to provide at least 92 00:05:50,040 --> 00:05:54,680 systems, even better solutions to differentiate yourself and 93 00:05:54,680 --> 00:05:57,960 all that drives complexity. And in order to deal with 94 00:05:57,960 --> 00:06:02,360 complexity, the, the simple methods of the parts of the past 95 00:06:02,360 --> 00:06:05,240 might not be sufficient for the, for the future well-being of the 96 00:06:05,240 --> 00:06:07,720 company anymore. So, and that, that triggers 97 00:06:07,720 --> 00:06:10,200 transformation. There is no distinct point in 98 00:06:10,200 --> 00:06:13,320 time where we said, well, now it's about time. 99 00:06:13,920 --> 00:06:17,360 But I, I started here three years ago and of course I looked 100 00:06:17,360 --> 00:06:20,640 at the status quo. And from my, from my previous 101 00:06:21,040 --> 00:06:24,800 professional experiences, I knew that there are different ways of 102 00:06:24,800 --> 00:06:28,320 approaching, for instance, product development topics, but 103 00:06:28,320 --> 00:06:31,760 also any other challenge in the company than what I found here 104 00:06:31,760 --> 00:06:34,320 at retail. So I, yeah, I decided, OK, let's 105 00:06:34,320 --> 00:06:38,120 let's also work on that and slowly and steadily transform 106 00:06:38,120 --> 00:06:41,480 into a more, yeah, effective way of working. 107 00:06:43,480 --> 00:06:46,760 When you say effective way of working, what does that mean? 108 00:06:46,760 --> 00:06:50,560 How does success look like in terms of effectiveness? 109 00:06:52,160 --> 00:06:54,760 Yeah, in the in the end, ultimately results count. 110 00:06:54,760 --> 00:06:56,960 Yeah. So it's not about methods, it's 111 00:06:56,960 --> 00:06:59,120 not about the beauty of technology. 112 00:06:59,320 --> 00:07:04,520 We are here to yeah, to to push growth of the company and of 113 00:07:04,520 --> 00:07:08,560 course profitable growth. So that means whatever we do 114 00:07:08,560 --> 00:07:13,560 needs to lead to, to yeah, new products that enable us to to 115 00:07:13,560 --> 00:07:18,720 sell more of, of that of that new product or approach new 116 00:07:18,720 --> 00:07:24,640 customer groups. And in order to that, in order 117 00:07:24,640 --> 00:07:28,160 that this happens, of course we need to have a product which is 118 00:07:28,320 --> 00:07:33,320 superior to what our competitors do either with lower costs or 119 00:07:33,320 --> 00:07:35,600 with a better functionality, better efficiency. 120 00:07:36,320 --> 00:07:38,720 And then we will see sales growth. 121 00:07:39,080 --> 00:07:42,080 And ultimately from that sales there, there will be a profit 122 00:07:42,080 --> 00:07:44,480 which remains in the company and that makes the company 123 00:07:44,480 --> 00:07:47,760 sustainable for the future. It's as simple as that, but of 124 00:07:47,760 --> 00:07:50,560 course very complicated to achieve that goal because so 125 00:07:50,560 --> 00:07:54,320 many different things need to be taken into account and that's 126 00:07:54,680 --> 00:07:58,080 ultimately the challenge. And I imagine that it also, it's 127 00:07:58,080 --> 00:08:01,120 also very interesting to have a specific context within that 128 00:08:01,120 --> 00:08:03,760 company. I imagine it being different 129 00:08:04,320 --> 00:08:08,680 having a 60 year old company to having a 2 year old scale up 130 00:08:08,680 --> 00:08:14,080 maybe. Yeah, I mean, the sheer size is 131 00:08:14,080 --> 00:08:16,680 already a challenge because it, it's not only a couple of guys 132 00:08:16,680 --> 00:08:19,640 around you that you see every day and that you sit in the same 133 00:08:19,640 --> 00:08:24,240 office with that you need to well bring to that path of, of 134 00:08:24,240 --> 00:08:26,440 change. It's, it's a big organization 135 00:08:26,800 --> 00:08:29,040 and it's not only the own departments, right. 136 00:08:29,440 --> 00:08:32,919 So whenever you look at an end to end process in a, in a, in a 137 00:08:32,919 --> 00:08:36,760 corporation, in a big company, it goes across many different 138 00:08:36,760 --> 00:08:40,520 departments. And what, what drives success is 139 00:08:40,520 --> 00:08:44,520 not the performance in a single department, but the flow of all 140 00:08:44,520 --> 00:08:46,640 the tasks across these different domains. 141 00:08:48,120 --> 00:08:50,480 And that's of course challenging because you you don't. 142 00:08:50,760 --> 00:08:55,880 It's not sufficient to optimise your your own sphere of 143 00:08:55,880 --> 00:08:58,320 influence, but also to manage the interface as well. 144 00:09:00,360 --> 00:09:02,960 So what is your approach on this transformation? 145 00:09:02,960 --> 00:09:07,000 Can you walk us through your your steps that you've taken, 146 00:09:07,000 --> 00:09:09,080 maybe the next steps that you're heading onto? 147 00:09:10,000 --> 00:09:13,560 Yeah. Well, I mean, the first step is 148 00:09:13,560 --> 00:09:17,800 always creating an awareness because change doesn't happen 149 00:09:17,800 --> 00:09:19,880 if, if the necessity is not seen. 150 00:09:21,160 --> 00:09:24,320 So and that's, that's already the first hurdle. 151 00:09:24,320 --> 00:09:28,080 Because if, if a company does well and and retail is, is not 152 00:09:28,160 --> 00:09:31,560 in any sort of crisis. I mean, we're more in a maybe in 153 00:09:31,560 --> 00:09:34,280 a strategic crisis because we see, OK, we, we are not 154 00:09:34,680 --> 00:09:38,680 achieving our growth goals, but with what we do and what, what 155 00:09:38,680 --> 00:09:43,440 we are already there is a, well, good profitability and, and no 156 00:09:43,440 --> 00:09:45,280 financial crisis or, or anything. 157 00:09:45,280 --> 00:09:48,040 And that, and that's still true even in an, in a, in a 158 00:09:48,040 --> 00:09:51,600 challenging environment. So creating the awareness that 159 00:09:51,600 --> 00:09:55,640 change needs to happen in, in good times, it's already the 160 00:09:55,640 --> 00:09:59,240 first hurdle. So I point out, OK, what has 161 00:09:59,240 --> 00:10:04,040 changed in the world and why do we need to adapt to that? 162 00:10:04,800 --> 00:10:08,400 So. And that takes already a couple 163 00:10:08,400 --> 00:10:11,120 of steps. I think we, we are, we have 164 00:10:11,120 --> 00:10:16,360 coped with that very well in the first year of me being ACTO 165 00:10:16,360 --> 00:10:18,760 here. And then of course, if, if the 166 00:10:18,760 --> 00:10:21,760 awareness is there, OK, the way we work might not be sufficient 167 00:10:21,760 --> 00:10:23,400 to be successful in the future anymore. 168 00:10:23,760 --> 00:10:27,120 You can start the discussion, OK, what, what, what are 169 00:10:27,120 --> 00:10:30,400 obstacles, what are impediments? How do we need to change the way 170 00:10:30,400 --> 00:10:32,240 we work? And then of course the 171 00:10:32,240 --> 00:10:37,320 transformation itself starts. So how did you approach that? 172 00:10:37,320 --> 00:10:40,520 Did you went with a small group of individuals who want to 173 00:10:40,520 --> 00:10:45,040 contribute or did you make a big plan and roll it out and have a 174 00:10:45,040 --> 00:10:50,360 big change program running? No, I think both would work. 175 00:10:50,360 --> 00:10:55,840 I, I, I chose to, to, to make the the pilot approach. 176 00:10:56,160 --> 00:11:00,040 So choosing a couple of guys that were very motivated to, to 177 00:11:00,160 --> 00:11:04,480 question the old way of working to experiment. 178 00:11:04,480 --> 00:11:07,320 And of course with experiments come out comes also the risk of, 179 00:11:07,320 --> 00:11:12,440 of failure. So they need also to be willing 180 00:11:12,440 --> 00:11:16,000 to, to fail and learn from those failures and, and change 181 00:11:16,000 --> 00:11:20,720 something and try again. And I had, I had a couple of 182 00:11:20,720 --> 00:11:26,280 motivated in the tendency younger leaders here in my team 183 00:11:26,720 --> 00:11:29,400 that said, well, there must be better ways of, of approaching 184 00:11:29,400 --> 00:11:33,080 things. And I started with those and the 185 00:11:33,080 --> 00:11:36,440 reason why I chose the the pilot approach is that the company as 186 00:11:36,440 --> 00:11:40,840 such is is pretty traditional. So I think it would have been an 187 00:11:40,840 --> 00:11:43,440 overburden for the company if we started with a big change 188 00:11:43,440 --> 00:11:47,120 program. So. 189 00:11:47,120 --> 00:11:52,560 You started with a couple of pilots and what happened then? 190 00:11:53,000 --> 00:11:55,360 Did they? At a certain point, I assume you 191 00:11:55,360 --> 00:12:00,000 would need to sort of bring the knowledge on a broader scale and 192 00:12:00,000 --> 00:12:06,440 involve multiple teams, maybe leaders who are not haven't 193 00:12:06,440 --> 00:12:08,720 jumped on the train at the first go. 194 00:12:11,400 --> 00:12:15,080 So of course the the intense transformation work was done 195 00:12:15,080 --> 00:12:18,640 with the pilot teams, but I always communicated with the 196 00:12:18,640 --> 00:12:21,280 whole leadership team. So we have regular well 197 00:12:21,280 --> 00:12:24,440 leadership meetings were communicate what what we're 198 00:12:24,440 --> 00:12:27,000 about to do, what we experimented with, what worked 199 00:12:27,000 --> 00:12:30,520 well, what failed. So everybody had the 200 00:12:30,520 --> 00:12:33,200 transparency on what we're doing, even though not everybody 201 00:12:33,200 --> 00:12:36,320 was involved. And step by step, of course, the 202 00:12:36,320 --> 00:12:40,320 sphere of, of the influence of the transformation approach was, 203 00:12:40,320 --> 00:12:44,240 was enlarged to incorporate step by step more of the leaders. 204 00:12:45,000 --> 00:12:48,640 But of course, you, you, you can't, you cannot, you cannot 205 00:12:48,640 --> 00:12:52,120 deal with too many. It's too much resistance at the 206 00:12:52,120 --> 00:12:54,920 time. So again, this is a step by step 207 00:12:54,920 --> 00:12:57,040 approach, integrating more and more. 208 00:12:57,040 --> 00:13:02,080 And of course with showing some small results, you can convince 209 00:13:02,080 --> 00:13:05,560 more people to, to join in. Yeah, which is true in the own 210 00:13:05,560 --> 00:13:07,960 department, but also in the in the adjacent departments. 211 00:13:08,120 --> 00:13:12,800 Yeah. We've been talking about flow 212 00:13:12,800 --> 00:13:15,960 efficiency and new ways of working or challenging the old 213 00:13:15,960 --> 00:13:18,200 ways of working. Can you walk us through a couple 214 00:13:18,200 --> 00:13:22,960 of examples of ways of working that have changed, changed or 215 00:13:22,960 --> 00:13:25,280 improvements that came out of those pilot teams? 216 00:13:27,760 --> 00:13:30,560 Yeah, So the the old way of working was pretty much in 217 00:13:30,560 --> 00:13:33,840 silos. So every department did did a 218 00:13:33,840 --> 00:13:37,040 good job in optimizing themselves, so they developed 219 00:13:37,040 --> 00:13:38,920 silos. Are vertical cuts through the 220 00:13:38,920 --> 00:13:41,800 value chain. That's vertical cuts through the 221 00:13:41,800 --> 00:13:44,000 value chain. I mean, traditional org chart, 222 00:13:44,000 --> 00:13:47,720 you know, we have, we have departments which are more well 223 00:13:47,720 --> 00:13:49,880 aligned with the knowledge or, or the domain. 224 00:13:50,520 --> 00:13:52,840 So there is, there are electrical experts, there are 225 00:13:52,840 --> 00:13:55,880 mechanical experts, there is a product management, which is 226 00:13:55,880 --> 00:13:58,560 good as such, because you need to also manage the knowledge and 227 00:13:58,560 --> 00:14:01,600 the domain. And that's not contradicting 228 00:14:01,840 --> 00:14:03,840 with managing the flow at the same time. 229 00:14:03,840 --> 00:14:07,840 Of course, the flow let's let's assume that's horizontal and and 230 00:14:07,840 --> 00:14:09,800 the domain is vertical. So you will have a sort of 231 00:14:09,800 --> 00:14:14,160 matrix and that's the first thing which that we established. 232 00:14:14,520 --> 00:14:18,280 So we didn't eliminate the vertical view. 233 00:14:18,520 --> 00:14:20,880 So the domains are still there and they need to be there. 234 00:14:21,600 --> 00:14:23,880 But we also highlighted that there is a flow across those 235 00:14:23,880 --> 00:14:26,040 verticals. So in the past every vertical 236 00:14:26,040 --> 00:14:30,240 was optimising themselves. So I had experts in electrical 237 00:14:30,240 --> 00:14:34,240 engineering, experts in product management, but collaboration 238 00:14:34,240 --> 00:14:38,560 was was not in the focus of of the optimization so far. 239 00:14:38,760 --> 00:14:41,240 And that's something that we that we changed. 240 00:14:41,480 --> 00:14:45,280 So for instance, we harmonised some of the tools that we use 241 00:14:45,280 --> 00:14:49,680 for the planning and that that to the fact that OK tasks and 242 00:14:49,680 --> 00:14:53,440 flows are better aligned. So we have less waste in terms 243 00:14:53,440 --> 00:14:57,400 of OK finished tasks are waiting for another department to pick 244 00:14:57,400 --> 00:15:00,960 them up. Of course that's not perfect, 245 00:15:01,280 --> 00:15:04,520 we'll probably not be perfect at any point in time, but it's 246 00:15:04,520 --> 00:15:07,440 better than in the past. So it's a progress already and 247 00:15:07,440 --> 00:15:11,400 of course the more you you deal with with these interfaces, the 248 00:15:11,400 --> 00:15:15,360 better you get at optimising the flow through the different 249 00:15:15,360 --> 00:15:18,360 departments. So maybe help me out with this 250 00:15:18,360 --> 00:15:20,320 one. We started with increasing 251 00:15:21,400 --> 00:15:25,000 effectiveness and at the organizational level, how does 252 00:15:25,000 --> 00:15:28,880 Flow link to having a better effect on the business side? 253 00:15:32,320 --> 00:15:36,680 So as, as the challenge in, in developing new solutions for 254 00:15:36,680 --> 00:15:40,200 customers is getting more complex, the risk of, you know, 255 00:15:40,200 --> 00:15:43,440 overlooking something is also much bigger. 256 00:15:43,440 --> 00:15:46,120 And not being effective means typically, well, you, you 257 00:15:46,120 --> 00:15:50,640 produce an output of, of your process, which then doesn't lead 258 00:15:50,640 --> 00:15:54,920 to the effect that, you know, sales growth or profitability 259 00:15:54,920 --> 00:16:01,600 rises. So if if you optimise the flow, 260 00:16:01,600 --> 00:16:05,720 you also optimise communication. So it's, it's also a 261 00:16:05,720 --> 00:16:10,200 contribution to risk management. So you detect possible mistakes 262 00:16:10,200 --> 00:16:15,760 in what premises that you that you thought were were true, you 263 00:16:15,760 --> 00:16:19,280 might falsify them earlier because you communicate better 264 00:16:19,800 --> 00:16:23,280 that the task is sooner in the next department where maybe some 265 00:16:23,280 --> 00:16:26,480 of those assumptions are are checked and and falsified. 266 00:16:27,000 --> 00:16:29,840 And that leads to the fact that you discover mistakes earlier, 267 00:16:29,840 --> 00:16:35,560 you you iterate faster and that that just increases the chance 268 00:16:35,560 --> 00:16:38,560 that in the end of the process that the result is more likely 269 00:16:38,560 --> 00:16:41,920 to be to be good for for our customers, there is no 270 00:16:41,920 --> 00:16:44,720 guarantee. Failures still happen, but the 271 00:16:44,720 --> 00:16:50,920 likelihood is lower. And I assume that the the 272 00:16:50,920 --> 00:16:53,160 failure that happened would happen earlier within the 273 00:16:53,160 --> 00:16:56,520 process, right? Yeah, as as as soon as possible. 274 00:16:56,520 --> 00:16:59,880 I mean, it's, it's an old saying, you know, that a mistake 275 00:16:59,880 --> 00:17:02,640 which which you discover in the early phase of the project is 10 276 00:17:02,640 --> 00:17:05,200 times less expensive than in the last phase. 277 00:17:05,200 --> 00:17:08,800 It could be even 100 times less expensive especially. 278 00:17:08,800 --> 00:17:11,960 When you run production sites and you you scale your products 279 00:17:11,960 --> 00:17:13,680 through production, you ship it to clients. 280 00:17:14,000 --> 00:17:18,079 Reconfigurating or getting those parts back is probably really 281 00:17:18,079 --> 00:17:20,000 painful. That's, I mean, that's the most 282 00:17:20,000 --> 00:17:23,520 horrific scenario, having a call back of, of products from 283 00:17:23,520 --> 00:17:28,040 customers also that happens, but it's, it's, it's already 284 00:17:28,040 --> 00:17:29,920 painful. If you discover that, you know, 285 00:17:30,000 --> 00:17:32,840 the, the expected quality level is not reached and you discover 286 00:17:32,840 --> 00:17:35,600 it's still inside the plant, you have a lot of rework. 287 00:17:36,400 --> 00:17:38,440 Customers will be waiting because you have delays in 288 00:17:38,440 --> 00:17:41,160 shipments and and all that and that that doesn't lead to 289 00:17:41,160 --> 00:17:44,600 customer satisfaction and increase increased trust in the 290 00:17:44,600 --> 00:17:47,280 company and that's not increased sales. 291 00:17:47,880 --> 00:17:53,560 So yes, pulling, pulling mistakes as as much to the early 292 00:17:53,560 --> 00:17:56,440 stage of the project is one of the aims which helps you to be 293 00:17:57,080 --> 00:17:58,040 more effective. Yeah. 294 00:17:59,960 --> 00:18:03,120 At the beginning is that there wasn't a real trigger event and 295 00:18:04,360 --> 00:18:06,440 retail is doing great at the moment anyway. 296 00:18:06,720 --> 00:18:10,600 So change needs to have a certain purpose or a certain 297 00:18:10,920 --> 00:18:13,680 aspiring goal that is that it's worth achieving. 298 00:18:14,680 --> 00:18:18,480 I'm wondering have you faced any like pushbacks from people 299 00:18:18,480 --> 00:18:22,160 within the company who said why do we need to do this? 300 00:18:22,160 --> 00:18:25,440 It's already working great. Why do we need to change This is 301 00:18:25,800 --> 00:18:30,000 why do we need to go through the value of this pair on the change 302 00:18:30,000 --> 00:18:32,000 curve if we're doing great already? 303 00:18:32,400 --> 00:18:36,120 I'm wondering if you have faced those those push backs and how 304 00:18:36,120 --> 00:18:41,720 did you deal with them? Yeah, of course I faced them a 305 00:18:41,720 --> 00:18:44,800 lot and and I faced them also in, in prior jobs where, you 306 00:18:44,800 --> 00:18:47,040 know, things were more obviously going South. 307 00:18:48,240 --> 00:18:51,920 Here it's, it's, it's even harder because if, if you look 308 00:18:51,920 --> 00:18:56,080 at the, the numbers, you know, in our P&L, they look OK, pretty 309 00:18:56,080 --> 00:18:57,800 OK. So it's, it's harder to 310 00:18:57,800 --> 00:19:00,520 convince. But what I, what I like to say 311 00:19:00,520 --> 00:19:02,600 is, you know, fix the roof while the sun is shining. 312 00:19:02,920 --> 00:19:05,480 If, if you have a home, you know, you wouldn't wait until 313 00:19:05,840 --> 00:19:08,320 you know your, your shindles are, are falling off the roof. 314 00:19:08,520 --> 00:19:12,960 You would, you would hire a guy to, to fix it before the water 315 00:19:13,200 --> 00:19:15,760 trains in. And with that analogy, I, I try 316 00:19:15,760 --> 00:19:19,080 to work a lot and, and try to point out that, you know, what 317 00:19:19,080 --> 00:19:22,600 you see in today's P&L is the merit and accomplishment of, you 318 00:19:22,600 --> 00:19:25,600 know, the past decade. Our, our industry is very small, 319 00:19:25,600 --> 00:19:27,560 slow moving. We have products that live for, 320 00:19:27,560 --> 00:19:30,920 you know, decades and we still sell them today and they 321 00:19:30,920 --> 00:19:35,000 contribute a, a big portion to, to our turnover and also profit. 322 00:19:35,560 --> 00:19:38,720 So I, I point out that, you know, what's, what's in the PNL 323 00:19:38,720 --> 00:19:41,760 today is mostly driven by decisions that were taken 10 324 00:19:41,760 --> 00:19:44,200 years ago in a much less complex world. 325 00:19:44,640 --> 00:19:49,120 What we are about to develop today is, is not proven 326 00:19:49,120 --> 00:19:51,040 successful. And we see that we have a lot of 327 00:19:51,040 --> 00:19:55,360 challenges, you know, getting, you know, getting products out 328 00:19:55,360 --> 00:19:59,360 with the right time to market, you know, and also with, with 329 00:19:59,360 --> 00:20:01,720 the right quality level. So there's a lot of rework, 330 00:20:01,800 --> 00:20:04,160 additional editor reasons in the in the late phases of the 331 00:20:04,160 --> 00:20:06,640 project. And I tried to use those 332 00:20:07,160 --> 00:20:10,920 indicators, you know, to point out that if we continue moving 333 00:20:10,920 --> 00:20:14,960 on like that, we will have a problem in the PNL in a matter 334 00:20:14,960 --> 00:20:16,880 of time, in a matter of a couple of years. 335 00:20:17,760 --> 00:20:20,240 And and that's that's something that is still. 336 00:20:21,200 --> 00:20:23,840 Well, you can deal with it today because you still have those 337 00:20:23,840 --> 00:20:25,320 couple of years to transform yourself. 338 00:20:25,320 --> 00:20:28,440 But if you wait until you know you haven't problem in in 339 00:20:28,440 --> 00:20:32,680 profitability or really declining sales, it might be too 340 00:20:32,680 --> 00:20:36,320 late because transformation is nothing that you, you can't just 341 00:20:36,320 --> 00:20:38,680 turn a switch and then all of a sudden things are different. 342 00:20:39,360 --> 00:20:40,440 Yeah. What do you think is the lead 343 00:20:40,440 --> 00:20:43,480 time on the transformation? Like when, when would we see 344 00:20:43,920 --> 00:20:53,400 results in terms of new products or heavily increased speed and 345 00:20:53,400 --> 00:20:57,560 product development? I mean, it's very different for 346 00:20:57,560 --> 00:20:58,920 each organization I would assume. 347 00:20:59,080 --> 00:21:04,600 But talking about companies, the scale of retail, what would you 348 00:21:04,600 --> 00:21:08,440 assume is the timeline on it? I mean, assuming, you know, you 349 00:21:08,440 --> 00:21:12,240 would have perfect support from, from the top management across, 350 00:21:12,400 --> 00:21:14,720 you know, all departments and, and all domains. 351 00:21:15,680 --> 00:21:21,640 I, I think that's doable within 3-4 years to be realistic and 352 00:21:21,640 --> 00:21:24,760 honest. Because you will, even though, 353 00:21:24,800 --> 00:21:27,200 even if you have perfect environmental conditions, you 354 00:21:27,200 --> 00:21:30,560 will have setbacks. You will have, I don't know, 355 00:21:30,600 --> 00:21:33,840 maybe external events like the corona crisis, which requires 356 00:21:33,840 --> 00:21:36,880 you to, you know, maybe de prioritise transformation a 357 00:21:36,880 --> 00:21:38,800 little bit. That always happens. 358 00:21:39,440 --> 00:21:42,160 And for four years is, is already pretty good. 359 00:21:42,680 --> 00:21:47,200 If you are starting more, you know I mean here at Twitter we 360 00:21:47,200 --> 00:21:51,240 start in, in R&D and quality management with those new 361 00:21:51,240 --> 00:21:55,120 approaches and the rest of the management is not as heavily 362 00:21:55,120 --> 00:21:57,520 involved as as I am. They have different priorities 363 00:21:57,520 --> 00:22:01,160 which is which is OK. But of course, the support for 364 00:22:01,160 --> 00:22:04,160 the transformation is then not as high, which means you have 365 00:22:04,160 --> 00:22:07,280 longer, longer time to transform, maybe five to six 366 00:22:07,280 --> 00:22:10,320 years. What is the scale of the 367 00:22:10,320 --> 00:22:11,560 transformation at the moment? Like? 368 00:22:11,560 --> 00:22:15,200 How many people are involved or affected by the transformation? 369 00:22:15,600 --> 00:22:18,680 Bye now. Well, hard to say. 370 00:22:19,400 --> 00:22:27,640 I would assume it's probably 2/3 of of my organization are 371 00:22:27,960 --> 00:22:30,320 somehow involved, maybe a little bit more. 372 00:22:31,760 --> 00:22:33,160 Yeah. And then in the other 373 00:22:33,160 --> 00:22:36,080 departments it, it starts to also, you know, increase this 374 00:22:36,080 --> 00:22:40,200 sphere of influence. So we have a lot of engaged 375 00:22:40,200 --> 00:22:42,920 colleagues now in, in product management. 376 00:22:43,840 --> 00:22:47,840 The first colleagues from from purchasing are engaging in, in 377 00:22:47,840 --> 00:22:50,800 the methods and way of working logistics. 378 00:22:51,440 --> 00:22:54,880 So I can't really tell exactly who's who's in there, but it's 379 00:22:54,880 --> 00:22:58,600 it's getting bigger. So we talked about that circle 380 00:22:58,600 --> 00:23:04,400 of people who are willing to to to join the transformation at a 381 00:23:04,400 --> 00:23:07,040 very early stage. How did you picked up those 382 00:23:07,040 --> 00:23:09,280 participants? Like, did you just write an 383 00:23:09,280 --> 00:23:11,840 e-mail to everyone saying, hey, that's what we're going to do? 384 00:23:12,120 --> 00:23:16,520 Do you want to be part of it and people would apply for it or did 385 00:23:16,520 --> 00:23:20,320 you approach individually? Yeah, it was rather 386 00:23:20,320 --> 00:23:22,360 individually. So when I, when I onboarded 387 00:23:22,520 --> 00:23:26,320 retail, you have interviews with your leadership team anyhow, you 388 00:23:26,320 --> 00:23:29,600 know, and I did everybody in a one-on-one to get to know each 389 00:23:29,600 --> 00:23:33,400 other. And of course, I, I, well, I 390 00:23:33,400 --> 00:23:36,360 confronted everybody with, with my experiences from my 391 00:23:36,360 --> 00:23:40,360 professional past and my beliefs that, you know, organising 392 00:23:40,360 --> 00:23:45,720 collaboration is one of the primary leadership tasks and 393 00:23:45,720 --> 00:23:49,440 that drives very successful companies to even be be better. 394 00:23:50,280 --> 00:23:54,280 And you can tell from those one on ones and, and early 395 00:23:54,280 --> 00:23:57,520 interviews already where that triggers something positive or 396 00:23:57,520 --> 00:24:00,440 where that triggers like, oh, this is not my world. 397 00:24:01,200 --> 00:24:05,200 And yeah, from those interviews, I selected a couple of guys that 398 00:24:05,200 --> 00:24:08,400 were resonated where where I could get feedback. 399 00:24:08,400 --> 00:24:11,080 Oh, this sounds interesting. How did you do that? 400 00:24:11,080 --> 00:24:14,200 And you know, when, when someone's curious, that's 401 00:24:14,200 --> 00:24:16,600 already a good sign. So that's, that were the ones 402 00:24:16,600 --> 00:24:19,640 that I picked. And they, I, I would say 98% of 403 00:24:19,640 --> 00:24:22,440 them are still on board. There was one or two that later 404 00:24:22,440 --> 00:24:27,000 on said, well, it's not my way and that's OK. 405 00:24:27,160 --> 00:24:29,720 Yeah. I would assume that it it must 406 00:24:29,720 --> 00:24:34,160 be quite hard because you're not really enforcing a certain 407 00:24:34,160 --> 00:24:37,680 leadership level to be on that transformation team, but you 408 00:24:37,680 --> 00:24:42,280 rather work with whoever you think would make sense and if 409 00:24:42,280 --> 00:24:44,440 that person wants to be part of it as well. 410 00:24:44,840 --> 00:24:47,720 So there is a matchmaking process involved, but it's not 411 00:24:47,720 --> 00:24:51,240 necessarily at the right hierarchy level that you would 412 00:24:51,240 --> 00:24:54,640 need to really drive change. Was that a challenge? 413 00:24:57,360 --> 00:25:05,360 Yeah, you, you can. I mean, yes, it's, it's a 414 00:25:05,360 --> 00:25:10,000 challenge. I believe it's, it's not really 415 00:25:10,000 --> 00:25:12,440 doable. If you want to enforce a certain 416 00:25:12,440 --> 00:25:15,080 way of working, you know, you, you need to be convinced. 417 00:25:15,560 --> 00:25:19,400 And how do you get convinced? This is by creating highlights 418 00:25:19,400 --> 00:25:23,680 where apparently, you know, that new way of working leads to good 419 00:25:23,680 --> 00:25:26,280 results, whatever that might be. You know, it might be even 420 00:25:26,280 --> 00:25:29,080 something that you just feel like, OK, hey, they have, they 421 00:25:29,080 --> 00:25:31,160 have fun. They, it sort of feels good to 422 00:25:31,160 --> 00:25:34,200 be part of that, that group and then more join in. 423 00:25:35,720 --> 00:25:37,880 Of course, you know, at a certain point when you're, when 424 00:25:37,880 --> 00:25:40,160 you're further down the road that, that there will be maybe 425 00:25:40,160 --> 00:25:43,760 a, a, a remaining 20% of people resisting that transformation. 426 00:25:43,760 --> 00:25:46,640 And then different methods need to be applied, but you need to 427 00:25:46,640 --> 00:25:51,000 generate a critical mass, which is convinced because whenever 428 00:25:51,000 --> 00:25:53,960 you try to enforce with, with your power of, of being the 429 00:25:53,960 --> 00:25:57,120 leader, but this, this is what you will do the next day. 430 00:25:58,480 --> 00:26:01,400 I had the, I made the experience that, you know, every 431 00:26:01,400 --> 00:26:04,840 organization will do its best to prove you wrong because they, 432 00:26:04,840 --> 00:26:08,760 they are not convinced. So This is why I sort of, yeah, 433 00:26:08,760 --> 00:26:13,080 try to to make these, these pilot teams as successful as 434 00:26:13,080 --> 00:26:18,880 possible and and generate drag with that rather than push. 435 00:26:19,480 --> 00:26:21,840 So many, how many pilot teams are we talking about and how 436 00:26:21,840 --> 00:26:24,720 many people are on the on the transition team at the moment? 437 00:26:26,160 --> 00:26:29,760 That's three pilot teams initially, but of course that 438 00:26:29,840 --> 00:26:35,440 that group was enlarged by now by by a couple of of shared 439 00:26:35,440 --> 00:26:39,240 services that also turned into more agile methods and and 440 00:26:39,240 --> 00:26:43,040 working more on their interfaces different methods of planning. 441 00:26:43,760 --> 00:26:47,080 I would assume by now that's probably 100 people involved 442 00:26:47,080 --> 00:26:52,280 into into that transformation. The next one might be a bit of a 443 00:26:52,280 --> 00:26:54,840 tricky question I know, but it would be cool to get some 444 00:26:54,840 --> 00:26:57,840 insights from you on it. What are the things that the 445 00:26:57,840 --> 00:27:00,600 transformation team or that you personally have tried within the 446 00:27:00,600 --> 00:27:03,960 transformation but then failed, learned and pivoted in some 447 00:27:03,960 --> 00:27:07,800 shape or form? Yeah, there were many trial and 448 00:27:07,800 --> 00:27:10,520 errors. So I knew already, you know, 449 00:27:10,520 --> 00:27:14,240 when I arrived here that one of the most powerful tools in, in 450 00:27:14,240 --> 00:27:17,320 optimising flow across the company is having, you know, 451 00:27:18,080 --> 00:27:21,360 well, a harmonised task planning with different flight levels. 452 00:27:22,200 --> 00:27:25,680 So breaking down, you know, strategies to, to customer 453 00:27:25,680 --> 00:27:28,840 stories and customer stories, then to features and, and epics 454 00:27:28,840 --> 00:27:31,960 like what you know from software development works also well in, 455 00:27:31,960 --> 00:27:33,960 in hardware development, it's pretty agnostic. 456 00:27:35,680 --> 00:27:38,480 Anyhow, I was, I started with that way too early. 457 00:27:38,880 --> 00:27:43,600 So without having the feeling for the necessity, you know, I, 458 00:27:43,600 --> 00:27:47,480 I said, well, why, why don't you try to deploy your task in that, 459 00:27:47,480 --> 00:27:49,520 inside that tool with, with that method. 460 00:27:49,520 --> 00:27:54,600 And you know, we iterate on team level every two weeks and well 461 00:27:54,600 --> 00:27:56,600 on, on epic level maybe every four months. 462 00:27:57,720 --> 00:28:02,760 That didn't work at all. It took now two years until 463 00:28:02,880 --> 00:28:06,280 people realised, hey, we need, we need to harmonize task 464 00:28:06,280 --> 00:28:07,760 planning. And I was like, yeah, OK, that's 465 00:28:07,760 --> 00:28:10,480 what I said two years ago. So that, that happens a lot, you 466 00:28:10,480 --> 00:28:13,520 know, because we are not aligned already in, in your experience 467 00:28:13,520 --> 00:28:16,960 level with what works and not. And you need to let room for, 468 00:28:16,960 --> 00:28:21,240 for experiments where, where you already know that will not work. 469 00:28:21,880 --> 00:28:24,360 But people need to experience that themselves and then, you 470 00:28:24,360 --> 00:28:26,840 know, find the right way to a certain degree. 471 00:28:27,400 --> 00:28:31,760 Of course, I, I try to give us much support in, in finding new 472 00:28:31,760 --> 00:28:34,760 ways of working, but it needs to be something that the team 473 00:28:34,760 --> 00:28:37,280 discovers for themselves. Because then they are proud, you 474 00:28:37,280 --> 00:28:40,280 know, that they try to protect it and they try to, you know, 475 00:28:40,480 --> 00:28:43,240 further develop it. And this is also why you joined 476 00:28:43,240 --> 00:28:47,720 joined in as an external consultant, not to enforce 477 00:28:47,720 --> 00:28:50,960 things from outside, but to enable the the organization to 478 00:28:50,960 --> 00:28:52,400 find the right way for themselves. 479 00:28:58,360 --> 00:29:02,440 You already mentioned that it's hardware and software, and there 480 00:29:02,480 --> 00:29:07,400 are similarities between. I had a couple of episodes with 481 00:29:07,400 --> 00:29:10,080 people from the automotive industry who really struggle on 482 00:29:10,080 --> 00:29:12,760 the cultural differences between software development and 483 00:29:12,760 --> 00:29:15,320 hardware development. Have you seen any of those 484 00:29:15,320 --> 00:29:18,880 challenges within within retail talking about different 485 00:29:18,880 --> 00:29:20,680 departments and methods of working? 486 00:29:22,360 --> 00:29:26,040 Yeah. So I mean, one of the principles 487 00:29:26,040 --> 00:29:30,120 of, of being more agile and, and flow optimise is, you know, 488 00:29:30,120 --> 00:29:35,360 producing results in, in, in short increments that allow you 489 00:29:35,360 --> 00:29:37,840 to judge where you're on the right, whether you're on the 490 00:29:37,840 --> 00:29:41,480 right path or not. And in software that seems 491 00:29:41,480 --> 00:29:43,320 always easy. You know, you push a button, 492 00:29:43,360 --> 00:29:46,240 your software will be built and then tested the next day. 493 00:29:46,680 --> 00:29:50,640 So prototyping seems to be much easier in, in software. 494 00:29:51,400 --> 00:29:55,320 And I strongly believe, you know, there are methods that 495 00:29:55,320 --> 00:29:57,800 that can be carried over into hardware as well. 496 00:29:59,000 --> 00:30:03,440 It's, it's much, well, you need to raise a little bit the extra 497 00:30:03,440 --> 00:30:05,640 abstraction level. You need to break down your, 498 00:30:05,640 --> 00:30:08,560 your hardware and, and say, OK, I, I can't build a full 499 00:30:08,560 --> 00:30:10,360 prototype within two weeks. That's clear. 500 00:30:10,680 --> 00:30:14,480 Whether it be a car or an enclosure, you know, purchasing 501 00:30:14,480 --> 00:30:17,680 material, getting the right tools in place, that all costs 502 00:30:17,680 --> 00:30:18,520 time. That's true. 503 00:30:18,880 --> 00:30:24,280 But there are methods where you pick just distinct mechanisms 504 00:30:24,720 --> 00:30:27,280 where you are maybe uncertain whether they work or not. 505 00:30:27,760 --> 00:30:30,680 And then you can use methods of rapid prototyping like 3D 506 00:30:30,680 --> 00:30:34,520 printing or, you know, just bending something in the 507 00:30:34,520 --> 00:30:37,760 prototype workshop, which might not be ideal and perfect like 508 00:30:37,760 --> 00:30:41,080 the like the real product, but good enough to produce an 509 00:30:41,080 --> 00:30:44,280 indication whether that path will lead to success or not. 510 00:30:45,280 --> 00:30:50,920 And where wherever you, you, you, you can show teams that, 511 00:30:50,920 --> 00:30:53,720 you know, that big elephant can be cut into slices that are more 512 00:30:53,720 --> 00:30:56,600 manageable. People see that, oh, OK, that 513 00:30:56,600 --> 00:30:58,960 already works. We don't know if it works in the 514 00:30:58,960 --> 00:31:01,520 integration level, but you know, on the component level we proved 515 00:31:01,520 --> 00:31:03,320 already. And that gives you certainty to 516 00:31:03,320 --> 00:31:06,240 take the next step. So that's, that's different. 517 00:31:06,240 --> 00:31:09,240 But on the other hand, you know, it can be also carried over. 518 00:31:09,240 --> 00:31:14,160 So the method stays the same. And you might, you might need a 519 00:31:14,160 --> 00:31:17,040 little bit, a longer Sprint sometimes, or a prototype can 520 00:31:17,040 --> 00:31:19,720 only be built in two sprints. Doesn't matter. 521 00:31:19,720 --> 00:31:22,680 It's still faster than waiting, you know, for the first 522 00:31:22,680 --> 00:31:26,320 prototype being built after 1 1/2 years and then discovering, 523 00:31:26,320 --> 00:31:30,440 oh, on a component level, we made so many, so many mistakes, 524 00:31:30,600 --> 00:31:32,200 we can't even test the prototype. 525 00:31:33,320 --> 00:31:35,640 I think it's so interesting the ways of work and how they evolve 526 00:31:35,640 --> 00:31:36,880 through the different industries. 527 00:31:37,160 --> 00:31:40,840 When we talk about agile ways of working, many things come from 528 00:31:40,840 --> 00:31:44,480 Lean, which has a production or factory level background, right? 529 00:31:44,960 --> 00:31:50,080 And even when we talk about methods like Scrum, they come 530 00:31:50,160 --> 00:31:53,920 out of a paper from electronics companies about electronics 531 00:31:53,920 --> 00:31:56,680 companies and teams from them. So that is hardware and software 532 00:31:56,680 --> 00:32:01,440 already combined in the very, very early years of Scrum, where 533 00:32:01,600 --> 00:32:03,720 Scrum didn't really exist back then, right? 534 00:32:05,160 --> 00:32:08,840 But then today you have software teams saying that, oh, and 535 00:32:08,840 --> 00:32:11,440 hardware, it's very different and software is very different. 536 00:32:11,440 --> 00:32:13,480 And on the other side, it's the same way around. 537 00:32:14,640 --> 00:32:18,360 So I think that's really interesting how people map their 538 00:32:18,360 --> 00:32:20,600 methodology to their specific context. 539 00:32:20,800 --> 00:32:24,480 So in terms of hardware, I would assume that you don't have to 540 00:32:24,480 --> 00:32:28,240 have those two weak iterations that you mentioned like like you 541 00:32:28,240 --> 00:32:32,040 mentioned, but as long as you're iterating a little bit faster 542 00:32:32,040 --> 00:32:34,000 than your competitors, you should be good, right? 543 00:32:35,080 --> 00:32:37,120 Exactly that. That's in the end what matters. 544 00:32:37,120 --> 00:32:41,520 So you can, you can adapt the time frames, maybe 3 weeks is 545 00:32:41,520 --> 00:32:43,800 appropriate, maybe 4 weeks. It depends a little bit on what 546 00:32:43,800 --> 00:32:48,600 you're building, but doing it faster than than the rest in the 547 00:32:48,800 --> 00:32:51,360 in in the respective industry gives you the competitive 548 00:32:51,360 --> 00:32:53,440 advantage or. Maybe not fast matters more 549 00:32:53,440 --> 00:32:56,760 frequent, definitely, yeah. Yeah, I mean iterating faster 550 00:32:56,760 --> 00:32:58,440 means more frequently. Yeah, exactly. 551 00:32:59,040 --> 00:33:02,760 So I mean there are companies out there that that proved, you 552 00:33:02,760 --> 00:33:05,600 know, that you can be very successful with iterating fast 553 00:33:05,600 --> 00:33:07,800 and then having very complex hardware products. 554 00:33:07,800 --> 00:33:11,400 And one of one of the things that I really admire in, in 555 00:33:11,400 --> 00:33:17,000 terms of how they move forward is Space XI mean it's probably 556 00:33:17,000 --> 00:33:19,480 one of the most complex products that you can build, you know, a, 557 00:33:19,480 --> 00:33:23,280 a, a huge spacecraft. Literally rocket science. 558 00:33:23,720 --> 00:33:25,160 That's rocket science. Yeah. 559 00:33:25,160 --> 00:33:27,920 And it's it's absolutely fantastic. 560 00:33:27,920 --> 00:33:30,080 What? What different domains you need 561 00:33:30,080 --> 00:33:33,920 to bring together, you know, material sciences, flow 562 00:33:33,920 --> 00:33:38,720 mechanics, a lot of things, you know, so it's, it's really 563 00:33:38,720 --> 00:33:41,400 complex, different departments have to have to work together. 564 00:33:42,040 --> 00:33:46,160 And they built rockets, you know, with a new design with, 565 00:33:46,160 --> 00:33:50,320 with adaptations, with, you know, new versions every other 566 00:33:50,320 --> 00:33:53,560 week in, in the intense phases, you know, and that of course, 567 00:33:53,560 --> 00:33:55,560 that varies. And there are phases where, OK, 568 00:33:55,560 --> 00:33:59,680 it's, it's not as intense, but there is the evidence that it is 569 00:33:59,680 --> 00:34:03,320 feasible whatever you do. And they are much faster than 570 00:34:03,800 --> 00:34:06,480 any other competitor. I mean, they out competed NASA, 571 00:34:06,480 --> 00:34:09,960 you know, SpaceX is about the only company now that's flying 572 00:34:09,960 --> 00:34:13,400 to the International Space Station, which is, which is a 573 00:34:13,400 --> 00:34:15,920 crazy success. And they lowered the costs of 574 00:34:15,920 --> 00:34:19,520 bringing, you know, a kilo to low Earth orbit by a factor of 575 00:34:19,840 --> 00:34:21,520 1000. And that's still not the end of 576 00:34:21,520 --> 00:34:26,960 the of the story. So it it shows that those 577 00:34:26,960 --> 00:34:30,600 methods approaching the same problem with a totally different 578 00:34:30,600 --> 00:34:33,960 mindset can give you a huge competitive advantage. 579 00:34:34,000 --> 00:34:37,880 And if you do only a 10th as good as as SpaceX, you're 580 00:34:37,880 --> 00:34:40,639 definitely a leading company in your in your industry. 581 00:34:41,600 --> 00:34:44,679 I think part of part of this basic story is also that they 582 00:34:44,679 --> 00:34:49,920 industrialise rocketry, so to say, compared to NASA, which is 583 00:34:49,920 --> 00:34:53,400 more of a research facility. I had an interview with Tom 584 00:34:53,400 --> 00:34:57,600 Soderstrom from NASA Jet Propulsion Laboratory, and he 585 00:34:57,600 --> 00:35:00,640 said that the main difference is that we have research budget and 586 00:35:00,640 --> 00:35:05,240 they run a company, right? So the pressure of like making 587 00:35:05,240 --> 00:35:09,880 those things reusable, working more efficiently is way 588 00:35:09,880 --> 00:35:13,280 different between those two organisations, yeah. 589 00:35:14,160 --> 00:35:18,400 And and the the mindset is as a consequence a totally different 590 00:35:18,400 --> 00:35:20,840 1. So NASA developed all methods 591 00:35:20,840 --> 00:35:26,800 for first time right approach. So FMEA and, and, and all these 592 00:35:26,800 --> 00:35:30,840 things were basically an outcome of, of the research of NASA. 593 00:35:31,760 --> 00:35:35,560 And the aim was whenever we fire up a rocket, it will go to space 594 00:35:35,560 --> 00:35:37,520 and come down in a controlled manner. 595 00:35:38,280 --> 00:35:41,280 And that's a totally different approach than what what SpaceX 596 00:35:41,280 --> 00:35:43,600 did, you know? So they said, well, the first 597 00:35:43,600 --> 00:35:45,520 one was not going even going to be a rocket. 598 00:35:45,520 --> 00:35:50,600 It's a flying water tank. Yeah, let's just boulder an 599 00:35:50,600 --> 00:35:54,480 engine below that that propane tank and then see whether it 600 00:35:54,480 --> 00:35:57,080 lifts off the ground. And we are totally sure it will 601 00:35:57,080 --> 00:36:00,960 explode. But we learn and and I think 602 00:36:01,040 --> 00:36:04,560 that that proved in the end, you know, that's, that's an approach 603 00:36:04,560 --> 00:36:09,840 which which is hard to to digest because you produce failures. 604 00:36:11,640 --> 00:36:14,080 I mean, it's already designed in that you produce failures, 605 00:36:14,080 --> 00:36:16,320 right? But you learn so much more and 606 00:36:16,320 --> 00:36:19,280 so much faster that in the end the total result is much better. 607 00:36:19,840 --> 00:36:21,440 And it's totally out competing NASA. 608 00:36:21,960 --> 00:36:25,920 I think what we can take away from from SpaceX is that it's 609 00:36:25,920 --> 00:36:28,400 really important to build a machine that builds the machine 610 00:36:28,400 --> 00:36:32,160 because that enables you to iterate more frequently, right? 611 00:36:32,160 --> 00:36:36,480 If you have a good operating model for building rockets, 612 00:36:36,480 --> 00:36:40,800 reusing rockets, launching rockets, that gives you all the 613 00:36:40,800 --> 00:36:45,120 space you need in to really launch rockets more frequently 614 00:36:45,120 --> 00:36:47,000 and launch new products more frequently, yes. 615 00:36:47,840 --> 00:36:51,520 Yes. And of course, you know that 616 00:36:51,520 --> 00:36:55,760 that might be an extreme case, but I, I like to pick out, you 617 00:36:55,760 --> 00:36:58,760 know, some of the things where, where they make a difference and 618 00:36:58,760 --> 00:37:03,080 try to transfer that into, into my way of work or into my 619 00:37:03,080 --> 00:37:09,120 responsibilities. It's not, you can't copy that 620 00:37:09,160 --> 00:37:13,640 one to 1, you know, and and there is also, I mean, SpaceX 621 00:37:13,640 --> 00:37:16,040 didn't have any legacy, you know, we are a 60 year old 622 00:37:16,040 --> 00:37:17,600 company. So we need to take that into 623 00:37:17,600 --> 00:37:19,840 account. We, we cannot change as fast. 624 00:37:20,240 --> 00:37:23,200 There are some things that are just like they are because, you 625 00:37:23,200 --> 00:37:27,960 know, we are still private owned and also our owner has, has 626 00:37:27,960 --> 00:37:31,600 some, well, some values that he didn't, he doesn't want to see 627 00:37:31,600 --> 00:37:34,000 being conflicted by, by any transformation. 628 00:37:34,920 --> 00:37:36,600 And that needs to be taken into account. 629 00:37:36,600 --> 00:37:42,320 No matter, you can still use some of those of those elements 630 00:37:42,320 --> 00:37:44,600 in your in your daily work and integrate them. 631 00:37:44,720 --> 00:37:46,360 The mechanisms are always the same. 632 00:37:47,720 --> 00:37:49,320 All right. Let's jump to the final 633 00:37:49,320 --> 00:37:55,400 question, which is what would you advise other managers, 634 00:37:55,400 --> 00:37:59,320 leaders from other companies should do when they start their 635 00:37:59,320 --> 00:38:02,560 transformation or when they're thinking about doing a 636 00:38:02,560 --> 00:38:04,800 transformation within their their organization? 637 00:38:05,040 --> 00:38:06,440 What would you advise them to do? 638 00:38:06,520 --> 00:38:08,240 Any tips or tricks from your side? 639 00:38:11,280 --> 00:38:13,800 I, I, I guess there is no silver bullet we, we came across. 640 00:38:13,800 --> 00:38:16,760 I think many of the, of the things that add value to that 641 00:38:16,920 --> 00:38:20,120 transformation need to be patient. 642 00:38:21,800 --> 00:38:25,440 And at the same time, you know, you need to be present and, and, 643 00:38:25,440 --> 00:38:28,160 and push things and, and, and teams forward. 644 00:38:28,160 --> 00:38:31,040 But you need to encourage also that you know, they make their 645 00:38:31,040 --> 00:38:33,840 own experiences and, and, and, and fail with them, even even 646 00:38:33,840 --> 00:38:36,040 though you, you know, it already let them fail. 647 00:38:36,600 --> 00:38:38,640 And that's, that's something sometimes it's, it's really 648 00:38:38,640 --> 00:38:41,760 painful because it takes an additional loop, you know, it 649 00:38:41,760 --> 00:38:45,240 takes another one or two months that will test out the, the new 650 00:38:45,240 --> 00:38:48,640 method And, and you, you already know this will not work. 651 00:38:49,480 --> 00:38:51,600 Let them experience that by themselves. 652 00:38:51,600 --> 00:38:54,840 It's so important to, you know, then have a retro lick your 653 00:38:54,840 --> 00:38:57,400 wounds and, and say, well, OK, let's try something better. 654 00:38:58,520 --> 00:39:02,920 If if you try to draw that path straightforward, even though you 655 00:39:02,920 --> 00:39:05,040 might be right, people will not follow. 656 00:39:06,240 --> 00:39:09,000 That's some of the thing or one of the things I experienced and 657 00:39:09,040 --> 00:39:11,920 that I would recommend everybody to respect. 658 00:39:13,080 --> 00:39:15,400 Any tips? On, on gaining the right budget 659 00:39:15,400 --> 00:39:18,160 and getting the right people on board for such a long invest, 660 00:39:18,160 --> 00:39:21,200 long time investment. Because I would assume that A, 661 00:39:21,360 --> 00:39:26,440 it costs a lot of money and B, if it takes like 5 years, you 662 00:39:26,440 --> 00:39:29,440 would get asked a bunch of times in between those five years, 663 00:39:29,560 --> 00:39:31,720 hey, where is this money actually going? 664 00:39:31,760 --> 00:39:34,720 When do we are we going to see the returns of it? 665 00:39:35,520 --> 00:39:37,720 Yeah. Well, it depends a little bit. 666 00:39:37,720 --> 00:39:40,600 If the question is will it cost so much money? 667 00:39:40,600 --> 00:39:44,080 You know, it will cost time management attention. 668 00:39:44,600 --> 00:39:46,880 Of course you need to have workshops here and there, but 669 00:39:47,080 --> 00:39:49,840 we're on a pretty small budget because it's also not well 670 00:39:49,840 --> 00:39:52,320 respected here to spend a lot of money on on these kind of 671 00:39:52,320 --> 00:39:55,040 things. But but you have a lot of people 672 00:39:55,040 --> 00:39:58,720 in the company and I said, well, if, if we manage to take it's 673 00:39:58,720 --> 00:40:04,720 safe 5% of our of our time and invested into working on the 674 00:40:04,720 --> 00:40:08,160 system rather than working in the system, you need to make a 675 00:40:08,160 --> 00:40:11,280 5% efficiency or effectiveness gain and then it's already 676 00:40:11,280 --> 00:40:13,560 compensated. So I'm not convinced that this 677 00:40:13,560 --> 00:40:16,360 was, you know, a huge capital expenditure. 678 00:40:16,960 --> 00:40:19,520 In the opposite, if you if you manage it right, you know you 679 00:40:19,520 --> 00:40:22,480 you will get some early successes of because of low 680 00:40:22,480 --> 00:40:25,040 hanging fruits that will already compensate the effort that you 681 00:40:25,040 --> 00:40:29,320 put into it. So it, it depends a little bit 682 00:40:29,320 --> 00:40:31,600 on how you approach it. Of course you can make a huge 683 00:40:31,600 --> 00:40:34,640 transformation program with a lot of budgets, but I saw also, 684 00:40:34,800 --> 00:40:37,760 you know, from many companies that I exchanged with failing 685 00:40:37,760 --> 00:40:40,160 those huge programs. Yeah. 686 00:40:40,160 --> 00:40:45,200 So I I think it can be a good thing to approach small and 687 00:40:45,200 --> 00:40:50,040 steadily. All right, Philip, we reach the 688 00:40:50,040 --> 00:40:53,200 end of the episode of today. Thank you so much for recording 689 00:40:53,200 --> 00:40:54,600 this with me. It was really interesting 690 00:40:54,600 --> 00:40:57,880 learning a bunch about Rachel, about your work and about your 691 00:40:57,880 --> 00:41:00,040 perspective, perspective on transformation. 692 00:41:01,200 --> 00:41:03,840 Yeah, thank you so much and thanks everyone for listening. 693 00:41:07,240 --> 00:41:08,480 Thanks Benjamin for having me of. 694 00:41:09,480 --> 00:41:11,480 Course. Alrighty, bye. 695 00:41:12,640 --> 00:41:15,560 Goodbye. Hey, thank you so much for 696 00:41:15,560 --> 00:41:17,360 making it to the end of today's episode. 697 00:41:17,880 --> 00:41:20,440 Thanks for listening to this point and special thanks to 698 00:41:20,440 --> 00:41:23,640 Philip and retail for providing all the insights about retail's 699 00:41:23,640 --> 00:41:26,960 transformation. If you want to learn more about 700 00:41:26,960 --> 00:41:29,640 what retail is doing about Philips work, make sure to 701 00:41:29,640 --> 00:41:32,680 follow them on LinkedIn. They regularly provide more 702 00:41:32,680 --> 00:41:36,120 insights about the ongoing strategies at retail. 703 00:41:36,440 --> 00:41:39,040 And make sure to follow the seller work account as well, so 704 00:41:39,040 --> 00:41:40,400 you never miss an upcoming episode. 705 00:41:40,800 --> 00:41:43,120 Thank you so much for supporting this channel. 706 00:41:43,120 --> 00:41:44,520 Thank you so much for all your feedback. 707 00:41:44,680 --> 00:41:47,600 If you have more feedback, if you have an idea or a cool guest 708 00:41:47,600 --> 00:41:50,040 that you want to see on the show, make sure to reach out. 709 00:41:50,360 --> 00:41:53,320 That is either through the link provided in the show notes or 710 00:41:53,320 --> 00:41:57,760 you just write us an e-mail at info@stellarwork.com. 711 00:41:57,760 --> 00:42:01,760 That is info@stellarwork.com. See you soon. 712 00:42:02,040 --> 00:42:02,320 Bye.