Joachim has been on the digital transformation journey for over three years now at his Hugo Boss factory in Izmir, aiming to achieve a huge tailor shop with his 4,000 people and machines. His grand plan is more than functional, so he is clearly doing something right and we sat down with him to talk about how he did it. For more insight, you can watch our episode of The Boardroom to see Joachim’s operations in action yourself.
The Leadership Network: It has now been three years since you attended Leading the Factory of the Future Masterclass. What did you change since?
Joachim: We started from the organisation, continuing with the layout of the factory, the way we deal with new employees, with technology, the way we plan with regards to digitisation, the way we treat people and so on. Basically, we changed everything!
It all started with the realisation that in an ever more connected market, that is becoming more unpredictable, we needed a different setup for our factory. Yearly plans became obsolete because customer behaviour and the market environment kept changing every day. We had to disappoint management, because they were too confident in their ability to predict the future. They had been performing extremely well over the last 15 years, but they struggled with change. Operational excellence is always great until you change something, because everything is standardised. I had to be clear that this is not going to fix future problems.
“We had to make top management understand that everything had to be changed with regards to technology. The market is just so different that if you want to survive you need to accept the new rules.”
The Leadership Network: You said it yourself, you don’t like to be a follower so I don’t expect you to follow anyone’s rules on how to drive transformation. What is your take on getting the people on board with the mission?
Joachim: The good thing was that we had a very neat analogue system here to start with. What we learned fast is that if you have a messy analogue factory and you start building a digital system on top of it, you basically end up with two messy systems. Digitalisation is just another tool in the toolbox of already existing tools. I had to learn that not everything can easily be digitised because things are just not defined perfectly.
The Leadership Network: How did you go about communicating this to the people on the floor?
Joachim: Fundamentally, I think you will always need to understand that as a manager there will be people who like you and people who won’t.
“The important thing is to find people who believe in your vision and want to follow you. You need multipliers.”
I remember that we were celebrating the line of the month, maybe eight months into the journey and there were some colleagues from shop-floor who were thanking me for the technology that was introduced. It made their life easier and that was the best feedback one could get.
The Leadership Network: I would imagine you have to go quite deep with people about what is happening, how does digitalisation affect them and at least, at a basic level, reassure them that you’re going to support them. How do you do that?
Joachim: If you create a mission, a vision or a journey, you should never specify this journey too much. Otherwise people will hold back because they think the boss already has all the solutions. You need to think about what role you will be playing in the world in 5 years’ time and then you put it into a story, into something everyone can understand. You need to give people a lot of space and trust in order for them to be able to understand and fill this vision and not define everything by yourself.
The Leadership Network: What happens if they question you?
Joachim: As a leader you always have to give direction to people. However, if you have people questioning the basics you sometimes need to be rigid and realign everyone and once you are on course again you can give people more space. It is a balance and something that very much happens with your gut feeling. There are just so many different personalities. There are leaders and lagers and sometimes there are very good reasons to be a lager because they ask questions others don’t.
The Leadership Network: Before you got out there to talk to everyone you had to be pretty clear on the direction and where you wanted to take it. How do you get that clarity?
Joachim: I think after having done Leading the Factory of the Future Masterclass, I came back with a feeling that something had to change. The really inspiring moment to me was when we visited a Siemens factory. We were able to a have a look at the production area from above and I saw all those robots running and the people monitoring them. I noticed the incredibly low rate of failure and compared it to the factory I was running. In that moment I realized this wasn’t science fiction but is something you can really do, and we should create engaging environment that people want to work in and are able to be efficient. From there onwards I was just waiting for the chance to act on it, which I got in 2015. The thing I was worried about was convincing proud manufacturing people, who had a well running factory, that things had to change.
“There are tons of PowerPoint slides on Industry 4.0, but there you see little action in the field. The Masterclass tour at Siemens made me realize what’s possible.”
The Leadership Network: What were the key areas of focus in your factory in Izmir? What needed to change in the biggest way?
Joachim: The challenge was to build a digital twin of the physical factory and then manage both of them. We first had to think about connecting parts of the factory and we thought a lot about sensors. The second step was collecting data from those sensors. In a third step we analysed this data and started making sense of it. Some of the data we collected was completely useless but other data points were extremely valuable for gaining insights into how the factory operated. Additionally, we realized that we could not just buy gadgets but had to convince our managers and workers to use it, which meant we had to make the software as easy as possible to use. We leveraged gamification a lot when designing the UI.
“I don’t need a manual to start using WhatsApp, so why should that change when we move into professional software?”
The Leadership Network: How did you tackle organisational silos in this process?
Joachim: Silos exist because of the managers who build them. This means you need to reduce the number of leaders in an organisation and you need to give everyone more autonomy. Additionally, you can build career plans for leaders that involve job rotations, because what you want is holistic leaders who understand the ins and outs of the organisation.
The Leadership Network: Nowadays things change so fast that you often don’t really know which skills you need in your organisation to succeed. How did you know that you had the right talent in your factory?
Joachim: First of all, you need to preserve the current production, so you need skills that are needed nowadays. As a second step you need to spend a certain amount of time understanding the future trends, which can be driven by political, technological or societal change. I fast forward 5 years and picture the world there and then I go back year by year to see what I need to achieve in order to get there.
The Leadership Network: With so many directions to go in, how do you identify priorities?
Joachim: I don’t have time to focus on only three things, because the probability of me missing something important is just too big. We strongly follow the scrum mentality and work in two to three-week sprints and then we decide whether to invest more or not. This way we build in flexibility and can react fast if something changes.
The Leadership Network: How close do you think you are to reaching you bigger vision?
Joachim: Simon Sinek has just released a new book called The Infinite Game and this would also be my answer. There is no end, there are always going to be things to improve for the better.
Stay tuned for more articles to come in the series of conversations about leadership and managing transformation.