Innoboard: There is no consistent definition for innovation. Every industry and every department has its own definition. How would you define innovation with respect to your industry?
Hartmut Jenner: The concept of innovation has been used and abused so often for public relations purposes that many see it as no more than an empty phrase. I nevertheless believe that this concept and the idea that lies behind it must be taken very seriously. What I understand by innovation is not just product innovation either. For me, innovation is a frame of mind that forms the basis of all entrepreneurial activity. Without innovative thinking you cannot run a company. Every day is a fresh challenge that requires you to demonstrate your adaptability and creativity. Successes in previous years can only give you ideas on the shape the future might take. If you see past strategies as fixed formulas that must be copied as precisely as possible you will not survive in the long term regardless how successful you once were.
Do you see any major differences with respect to innovation between a family-owned firm like Kärcher and a large public company?
Family firms stand for successful, sustainable management, innovative power and social responsibility. This is accompanied by long-term thinking and action. That means setting forward-looking goals and pursuing them without allowing oneself to be influenced too much by current conditions in particular markets or sectors. In that way, one achieves continuous growth over longer periods. The basis is to invest continuously in key areas such as customer service, sales, manufacturing processes and research and development. In addition, in family firms, values are often put into practice intensively and authentically. Sustainable business success is based on values of this kind that are a fixed component of a company’s culture.
How does Kärcher react to the general trends of digitization, connectivity and ’Industry 4.0’?
Industry as a whole, and therefore Kärcher too, is facing an era of great progress in the area of productivity, triggered by smart products. This is illustrated by the fact that by 2020 50 billion devices will be connected via internet connections. Global competition requires innovation in product development and manufacturing – Kärcher is highly active in both areas. For example, we offer an efficient fleet management system that allows the coordination of cleaning machine fleets with a cloud-based system. It enables a progressive, efficient data management including predictive device maintenance and remotely managed diagnosis. Furthermore it makes a predictive capacity and use planning for floor cleaning machines possible. By the way, the knowledge of conditions is increasingly expected as a matter of course and has a significant impact on product development.
On the manufacturing side individualisation with the economic conditions of a large-scale manufacturer is required. That means that production becomes highly flexible, very productive and resource-efficient. We only need to look at the large variety of models manufactured on our scrubber drier assembly line to see how customers’ order behaviour itself is accelerating the reorganisation of the supply chain. The strong trend towards individualisation is shown here very clearly. While in 2010 there were only about 500 potential model variants for the scrubber driers produced at our plant in Winnenden, in 2014 this had grown to an incredible 200,000. In other words, no machine is identical to any other. We have moved from series production to piece production, or batch sizes of 1. This variety would be impossible to manage without elements from the world of Industry 4.0. So, the added value is optimised in real time to suit requirements.
What procedures has Kärcher established to successfully pursue really novel ideas, new breakthrough technologies or new business models?
One thing is certain, that innovation does not come about by coincidence. With the aid of our product development process we make it plannable. This process provides us with an organisational framework that helps us to develop product innovations systematically across business units and to take them to market in high quality and with great customer benefit. This process controls clearly the respective responsibilities and includes all process steps from project approval to series.
Some numbers highlight that innovation is one of our company’s most important success factors: Over 1,500 patents registered since the company was founded, 58 last year. We have more than 900 employees in R&D worldwide. Today 90% of the products we sell are only five years old or less, the portfolio includes 3,000 products. Last year we launched 120 new products.
Of course, not all product innovations are as spectacular as our window vac, for example. On the contrary, the majority of machine features designed to facilitate operation, increase efficiency or expand the range of functions. Many other innovations serve for sustainability: lower power and water consumption of high-pressure cleaners, improved recycling of utilised materials, longer product service life as a result of improvements in the design of motors or chassis, use of eco-friendly raw materials, taking back and environmentally friendly disposal of old machines, are a few examples.
Innovation is not limited just to products, but includes all departments within the company. General processes and procedures are consistently scrutinised. In addition, we observe technologies and evaluate them regarding the use in the business context. The structured support in the identification and assessment of technological developments can help to enhance both the efficiency and the quality of the evaluation, thus laying an improved basis for the subsequent technology and product development. We also cooperate with universities, associations and research institutions in this field.
Chief Executive Officer, Alfred Kärcher GmbH & Co. KG
Business studies and engineering graduate Hartmut Jenner has been with Kärcher since 1991. After completing his studies at the University of Stuttgart, he served as assistant to the Managing Director in charge of finance, accounts and personnel before being promoted to head of finance. In 1994 he was appointed commercial manager and assistant head of the systems engineering department. In 1997 he took over as head of the Home & Garden (Consumer Products) division. From 1998 to 2001 Mr. Jenner was also President and CEO of Kärcher North America. In 2000 he was appointed Managing Director, a year later Speaker and then CEO of the Kärcher Group’s Management Board. Since 2001 he has also been Head of the Alfred Kärcher Foundation.
Thank you for this interview.