We will 'spotify' innogy
Kuldip is a digital executive with a strong experience in digital technology adoption and digital business scaling. He has held C-level leadership roles in reputed global media companies and is now driving forward the digital transformation at innogy, the company at the forefront of the European energy transformation. He leads the digitization of the international energy retail business and coordinates the innogy-wide cross-segment Digital Leadership Circle. Some of the keywords associated with him are: entrepreneurial mindset, results focused, strategic thinker, gets things done, inspires & motivates.
Detecon: Kuldip, thank you very much for sitting down with us today to discuss the digital journey of innogy. Can you give us some insights on the digital approach of innogy? In particular, how do you see the digitization in the retail business at innogy?
Kuldip Singh: innogy is active in 11 different retail countries and we have about 22 million customers, both in B2C and in B2B. What we try to do on digital is deliver bottom-line business impact. We have identified several areas within the retail segment where we feel that those are must-win battles and areas we need to really scale up, organize ourselves across all countries and coordinate our activities.
One of the most important areas is the Retail Data Strategy, where we are looking at how we can gather data, monetize data, do it in a GDPR-compliant (regulation in EU law on data protection) way. We want to be more relevant for our customers, to cross-/upsell to them and to retain them better with personalized offerings. Of course, we also want to find new customers. We try to not boil the ocean all at once but focus on specific proof of concepts, which show that there is a business value. Then we see how we can scale that across the group.
We’ve also put together a sales and marketing technology stack (consisting of e.g. a Data Management Platform (DMP), a Customer Data Platform (CDP) and Marketing automation), and we are rolling this out now in a more harmonized way across all markets. That’s to enable innogy to build 360 customer profiles and be smarter in our customer marketing and sales approach; I see it as an important hygiene factor. For our existing business, for example, we have on the IT-side in 14 different markets 18 different SAP versions and I don’t want that to happen on the digital side. Therefore, we are stricter here, try to be more on top of it and jointly drive things forward. That leads to speed and less wheels being reinvented. Sometimes it takes a bit more time because you need to get everybody on board, but in the end, it is more effective, I believe.
As a third pillar, we are also looking very much at digital customer services on the retail side. How can we serve our customer even better and come up with very specific digital services around it? We want to really give them a seamless digital experience.
Is that focusing on the traditional commodity business or are you looking at completely new business models?
That’s a very good question. It’s both. It is also on the commodity side on which I feel that we can still improve. For example, giving our customers a great mobile first experience. This is something that is not happening now across the group. You might have that in a few brands, but can we do this better and more coordinated? Recently, I’ve therefore initiated within Retail across all markets a mobile strategy project. We want to come up with some guided frameworks to be more stringent, faster, at less cost and better. Currently our mobile approach is quite fragmented. I do believe there should be room for localizations. But I want to look at it from the 90% which is the same across Retail markets instead of the 10% which is different.
Also, we are doing several proof of concepts in conversational AI, working with chat bots in a proper way to give customers a good seamless experience such as 24/7 services, instant answering, etc. for specific use cases. At the same time, we are trying to lower the cost to serve which is also an important task. People used to say “mobile first” but now it’s actually “AI first”.
That’s an ambitious program. What is your personal role in this? Can you say a few words about yourself?
I have a Retail role as outlined before and I was also asked to coordinate the DLC which is our Digital Leadership Circle. There we have all the heads of digital from all our business segments represented plus management support functions. I am the coordinator of this board and try to make sure that we address the right topics and are aligned on the overarching topics.
I’ve also initiated the set up of so called ‘guilds’ across innogy, in an attempt to “spotify" innogy, as I call it. We build communities around very specific topics that are relevant across different business segments and also our management support functions. With the guilds, we try to foster best-practice sharing, harmonization across the group and spreading of knowledge. We want to ensure that we don’t reinvent the wheel everywhere and speed up the impact. We have set up the guilds in several areas.
Integration API was the first one. Actually, this is more of IT Infrastructure topic but we felt that there was a clear need to really do this in a coordinated way across the group. RPA (Robotic Process Automation) was the second one. In Retail we already have 400 bots live, but also in many other areas such as management support functions, financial service center, procurement, IT side, etc.. We find it extremely interesting to see how we can put bots in place and thereby make sure that our colleagues are focusing on things with more impact instead of routine tasks.
You mentioned integration APIs. Are those used for internal integration or for interfaces with the external partners?
Yes, it is used internal but also external. Again, we want to harmonize that and wherever appropriate open up to the outside world and developer community. We do not want the colleagues from Retail or Grid to do something completely different and reinvent the wheel everywhere.
Do you have a specific partnership program set up within innogy to address the special needs of startups?
We have that of course. We try to channel this through our innovation hub, with a focus on so called horizon 3 initiatives. Our colleague Thomas Birr is heading that up. We have created several outposts in Silicon Valley, Berlin and Tel Aviv. With the small team in the hub, we are trying to be close to the startup scene and really foster it. It is the venture-developer role, which we put in place to foster it and make the bridge towards the business.
Working with startups, you have to be clear about what you bring to the table. Money is not a scarce thing, money you can get everywhere. So funding is one part of the cake, the other thing, which is actually more important for startups, is the know-how from the industry and the customer base. Everybody wants to be part of the 22 million customer base. That’s where you can help the startups to scale. However, you need to build the bridge towards a local organization, which is running the daily business.
Talking about guilds, what does it mean in specific form for innogy from an organizational perspective? What is the purpose behind the guilds and how did you put them into place?
This is actually a first easy step in the agile way of working at scale. It’s quite challenging to have agile ways of working across a whole corporation – scaling that. Of course, everybody is doing agile ways of working across in specific teams. Everybody can put together a cross-functional team and that team itself is doing a product, a roadmap, developing it, testing stuff and putting it in the market. But if you want to do it at scale, that's not easy. Not many companies are successfully doing this.
We also want to get 42,000+ people to start working agile, but from one day to the other? That is a big challenge. I think these guilds are the first good step to show how things can be put together in a non-formal way. There is no formal mandate; it's a community that we bring together. We designate someone to drive it, coordinate it etc. - without a strong formal mandate. Mainly, we want the community to work, to come together and decide for themselves what kind of mission they have, what their objectives are going to be, how they are going to do it, what kind of impact they are going to bring. From the DLC coordination team, we help them to put it in a format so they don't have to reinvent the whole way of working from scratch.
How do you recruit the people for the guilds?
The recruiting part is also something we discuss at the DLC. Partly, we bring together people from our own teams. Then when you put that team together, you also find that you are missing people. The good thing is, that will balance out organically. Across guilds, we have also brought the guild leads together to learn from each other: what is working in your guild, what is not working in mine, how you can tackle this? We also invite them into the DLC and share what is going well and what is not going well and where we can support.
What is the incentive for managers to free up people to work in these guilds? Normally, when you have talents in teams, these people tend to be hidden from the outer world and not given away for broader initiatives.
I'm with you. However, I think that is the old school thinking. It does not fit this time and era anymore. People will work where they are happy, where they can flourish and shine. Therefore, if there is a manager trying to stop that, you can only do that for a very short time.
In addition, in the DLC there are very senior people. They have the full mandate for their respective units. Therefore, it starts actually with the DLC, supporting our approach entirely, standing behind it and wanting to make that a success. Then you try to get the best people onboard and motivate them. In the end, you have to give people the perspective and the room to do this jointly. What is in it for them? They grow in their roles, they grow in the complexity that they deal with and they grow in dealing with this topic from multiple angles. Therefore, I think there are lots of gains for people who participate in such guilds.
How exactly do you measure the success of these guilds? How do you do that? What is the value in that context?
This is something I don't decide. This is what the teams decide themselves. They will come up with what is their mission, what do they want to create, what kind of impact do they want to give, and what does success look like? But the DLC is of course interested in the progress and achievements and tries to support to speed this up.
Are all of the people contributing to the guilds part-time? There are no full-time roles, right?
The good thing is that they are actually working on a topic, which is already their day job or part of their day job in many cases. A data scientist is doing his daily job, and being part of this guild is not something, which comes on top as a completely new activity. The guild activity relates extremely to the existing daily jobs. We will keep a close eye to see if the ‘part-time’ model is not hindering us in the speed up.
Do you believe that ‘digital’ is still something that needs to have a special separate focus, which needs to be driven across all the line functions? Or, will it at some point become a daily business in every function so that all of the leadership that you now put in place, including your role or a CDO role, in general, will go away? What is your perspective on that?
That’s a very good question. I think it all has to do with maturity of the organization in respect to digital. I believe, a CDO-type of role -- we don’t call it like that -- will be temporary. It is about transition: a company is coming from a certain area and moving to an area where there is a “digital first” approach to everything. Once that kind of mindset, mentality, knowledge and capabilities are set up and you are organized around it in such a way, then it will be a second nature. But we are not there yet. That is the whole thing. It is a journey.
Do you think a traditional energy company like innogy has the chance to stay in the game or will they be pushed away by players like Check24 or similar intermediate platforms?
It is a constant reinvention. Can we, as an organization, make sure that we are able to act in an agile enough way and reinvent ourselves wherever needed? As an energy company, we are a trusted brand. That is a great starting asset that a disrupting start-up does not have. We need to just make sure that we are testing a lot on new products and services, and try to scale those things fast. Value added services around smart meter and data disaggregation are going to be wonderful opportunities that we should be on top of.
This brings me back to the cultural issues. You have probably heard about the concept of ambidexterity: how to have both the capabilities to incrementally improve your existing business and to ensure that you are able to radically create new business at the same time? Do you believe in this concept? What is your view on it?
Of course, I believe in it. But at the same time, with the same people, I think it is extremely difficult to execute. Because both parts of the organization are running at different speeds, with different scopings, with different responsibilities and set of activities that they need to deliver. If you want to optimize your current business you are taking the as-is as the basis and start to make it more efficient and effective with things such as process automation, horizon 1 and 2 product development, etc. Then you introduce end-to-end customer journey thinking, give our customer an improved digital experience, new digital services, take a mobile first and conversational AI first approach, etc. which are all related to the current business.
The next thing then is, can we also start thinking of many new other venues? At innogy there are things related to our current business, we call them Energy plus. These are produts & services concerning everything around your house like the insulation of your house or providing you with solar panels, a battery, smart home devices and all the things around it. Can we leverage decentralization and the data insights that come with it smartly? How can we in those areas go into new subscription-based models where we have a recurring revenue model and keep the relationship going? Much of that is still very close to the current business, horizon 2.
Then coming to the truly disruptive stuff, I feel some of it should be done slightly using arm's-length principle. Because that can be completely contrary to what you are doing in your own organization right now. To give an example with Fresh Energy, which is from the innovation hub. Fresh Energy is attacking our own brands in the back garden. That is a great approach. Completely digital-first, data-first, with the main intent to build all kinds of value added services for the customer. Could you have also done this within innogy? Maybe, or maybe it would not have been that successful, due to existing legacy. I think keeping it a bit at arm’s length, but not entirely disconnected is the key to success. There should be some business connect. It should not just float around, then it is like lost.
Kuldip, thank you very much for this very open and insightful discussion.