Innovation Diaries: Dealing with an Uncertain Future
In the midst of these crazy times, most industries still haven’t gotten their shit together. However, a few bright minds managed to understand the paradigm shift, act accordingly and reap the rewards. So, Catharina van Delden and I talked to some of them! Join us on our learning journey over the next few weeks to see how completely unrelated industries deal very differently with the same challenges we all share – and let’s become better together!
Franziska Mair is the senior manager of digital innovation at HARTMANN GROUP. In her role, Franziska supports innovation and digital transformation within the company. By identifying digital business models and establishing implementation and monetization strategies, she promotes new solution development and diversification at HARTMANN. She enables employees to innovate, develop and drive a sustainable digital solution portfolio.
Paul Hartmann AG is a leading provider of healthcare solutions for wound care, incontinence, disinfection, and surgical efficiency. Founded in 1818 in Heidenheim, Germany, the company provides its products and solutions in more than 130 countries.
What is innovation for you and how do you identify it?
For me, innovation is creating things that enable us to make new steps and to improve our business and will, simply said, make us future-ready. I don’t differentiate in the scale of innovation. Big ideas obviously get the most attention, but we shouldn’t ignore small changes that help us overcome hurdles by approaching something in a different way – they contribute to us becoming better just the same.
At Hartmann, we approach innovation in several ways. On one hand, we have internal innovation streams. This includes our strategies focused on current market situations or customer demand. Generally, the thing we always do is ask ourselves how to bring and maximize customer value. On the other hand, we’re obviously influenced by external factors: New technologies, start-ups and market trends are things that we always need to observe to see where our environment and economy are heading to. Bolstered with that knowledge, we can position ourselves in the market and see where there is space for new business models for us.
Hartmann is a manufacturing business; where have you been most affected by digitalization?
Many manufacturers focus their digitalization efforts on internal optimization in the likes of production and logistics. When we set up the strategy for our digital business, we decided to not only do only that but also build new solutions for our customers, focusing on the B2B environment. Obviously, optimizing e.g. logistic workflows such as the material flow for customers is part of creating more value for them. But it doesn’t just end there. We also think about providing completely new solutions and enriching our portfolio.
What have you been working on as of late?
We focus on either software or applications by themselves, or a combination of hard- and software, and offer these new products to our customers. One pilot project taking place in several hospitals right now is a sensor being installed in disinfection dispensers which are then installed in rooms throughout the hospital. Healthcare professionals are wearing a chip and whenever they get close to a dispenser, it measures if the professional disinfected their hands and how much disinfectant was used. All the data is anonymized and can help identify e.g. if the dispenser is positioned in the right place. Another digital solution we’re providing hospitals with organizes the flow of materials and products. They’re “digital cabinets” that automatically reorder supplies that are running low – this won’t only improve processes; it can also ensure the constant availability of necessary medical supplies.
That sounds like you’re in the middle of an amazing transformation. How do you manage such a shift, from a company selling physical products to one offering truly digital products?
This is currently one of our biggest challenges. On the one hand, we have amazing talent and are developing these super cool products. Yet, on the other hand, we don’t have sales processes to sell digital products like licenses and subscriptions. Questions of how the customers are paying and in which frequency they’re paying are entirely new for us. In the beginning, our approach was to simply create new products, develop them into a business model and then transfer them to our existing business unit. Later, we noticed that we can’t just move it to the current business because there were no capacities and experience from the unit to deal with that new process. We still have work going into this process and training the salesforce. We also need to maintain the product and its software and also develop our customer support further. So, we’re currently in the process of building up a team and training product managers that are working on all the mentioned points. This is a slow but important process, training the company and going through this transformation.
Are there any conflicts arising between the different streams in the company? And if so, how do you circumvent them?
It’s not an easy process for our business units. We, for example, in our digital business team have people with a digital background who know how to build digital products. Then, we have our colleagues with a medical background – they have all the expertise regarding wounds, for example. When we want to offer a new solution to a problem, obviously our unit needs to understand the whole process, a patient, a nurse, or a doctor is going through when receiving and giving in medical treatments. We can only get this knowledge from our colleagues. And they also need our digital expertise. In order to avoid a clash with those business units, in some cases we take external experts who function as a mediator. Having that intermediary really helps us translate with the other party and understand each other better.
An issue a lot of corporates during such a transformation have is giving people time and space to work on that process – how’d you go about it?
We first established a digital board that took place every month. It included the management of our different units as well as the heads of all countries. There, we could present several ideas and were able to explain why we desperately need this transformation. The big challenge, though, was that our ideas often were a bit too big and too disruptive, and management didn’t necessarily feel comfortable realizing new business processes as they could seem too far away from our core business. So, while they clearly saw the need for transformation in the company, it was tough getting them to commit to any of the “high-risk” ideas.
So, we started with minor changes and ideas which were closer to their daily business and had a direct impact on their work. We also changed the frequency of meetings as well as the people sitting there. The country organizations also showed very keen interest in more radical innovation, as they had direct contact with our customers, who demanded it. They had to drive transformation, and we wanted them to give us direct input from the customers. In the end, we realized that it is important to include operative management and to have a very customer-oriented view on innovation in the digital board.
It’s a pretty tumultuous time right now, with several crises at once. How do you still manage to have innovation be relevant?
For us, there is a big awareness that we need innovation and transformation to overcome crises. Listening to our customers and building products according to their demands has gotten more relevant than ever. As times have become quite uncertain, we had to become better at adapting to a changing environment, by being more agile and flexible. Covid, for example, with all its atrocities did have a positive impact on our processes. All of a sudden, we weren’t able to get to the hospitals and therefore our clients like before – but they desperately needed our products. Hence, we needed to change the way we interact with our customers by changing timeframes, team constellations, and overall processes.
What have been the most important learnings regarding successful corporate innovation?
People’s mindset is super important: Listening to the customers, being open to new ideas, and wanting to move forward to a better future is invaluable. I might repeat myself with this one but I really want to stress it: customer orientation! Professionals need to have open ears to listen to the customer and to identify where we – as a company – can improve. Ideas come directly from the client, you just need to listen to them as opposed to staying within your own little expert bubble.
Another thing I’ve noticed to be really worthwhile is collecting and making use of data. By gathering and analyzing, you can build new solutions and you can see what innovative ideas but also needs are out there. Next up, I’d strongly appeal to every corporate to never lose sight of its environment. Not only analyzing direct competitors but observing completely new solutions and business models that startups might bring to the market. And last but not least, never underestimate what impact management commitment can have. To truly transform a company and drive innovation, it needs to be driven by the management of the company.
Tl;dr for the lazy
- New technologies, Start-Ups, and trending fields always need to be observed to see where the environment and economy are heading to.
- Starting with minor changes and ideas which are closer to a company’s daily business improves the acceptance of change.
- It’s important to listen to the customers. Often, new ideas come directly from them.
- Establishing a digital board with top management that meets frequently and discusses several ideas improves the understanding and acceptance to change.
- To overcome internal conflicts, an external and neutral expert acting as a mediator can be helpful.