Ralf Kannefass: You can't plan a career ► Leaders Cafe Podcast #30

Thank you for the invitation to this exciting conversation. I'm really looking forward to it, not only to your questions but also to the feedback from your listeners. I'm curious whether it will fall on interested ears. How did I get from Siemens to KSB? I studied mechanical engineering and aerospace in Aachen, and also completed a supplementary degree in engineering and business administration in '94. Then I started at Siemens in the board's strategic marketing department. I had various positions there, and since 2002 I've been consistently in roles related to rotating equipment - gas turbines, steam turbines, compressors. What was missing were pumps, and KSB is one of the best pump companies in the world, certainly one of the largest with a global network of manufacturing and service locations. That appealed to me - a medium-sized company, not a huge conglomerate like Siemens with 90 billion, but rather 2.5 billion and 15,000-16,000 employees worldwide. Also a very traditional company since 1871, 150 years old.

You can't plan a career. Strengths and weaknesses come naturally; you probably carry them with you since age 12. I don't think mechanical engineering is dry; it's exciting. I studied aerospace engineering because it's at the edge of technology. But I saw that aerospace is a narrow field, heavily influenced by national interests. At that time there were only one and a half companies building large aircraft - Airbus was just emerging. Space was heavily regulated. So I thought to learn a lot at a multinational like Siemens, which was an ideal springboard. I started in strategic marketing with a focus on M&A - we did country strategies and bought and sold companies. Very exciting right out of university. I remember one board member asking me why I hadn't coordinated something with him. You learn quickly. You can't plan a career; you have to take opportunities.

I was interested in mechanical and aerospace engineering because it's cutting-edge technology, but also in business. I never wanted to work in a design office; I wanted to build and sell complete packages - rockets, aircraft. Selling and making profits was always my interest. That's why I studied that combination. You can't plan a career. My principle that got me through the early years was: if I think I can do it better than my boss, then I'll become the boss myself. I acquired the knowledge needed for different jobs. For example, I did commissioning of power plant components - a year in the Philippines, half a year in the USA. I got my hands dirty and learned the strengths and weaknesses of my own company and products. You learn your limits quickly. In front of the customer, you can't hide; it has to work. That's where the excitement began - interacting with customers.

No, it's completely different. Siemens appears bureaucratic from the outside but is very professional. Many things are handled very professionally due to the large number of people. That's something smaller companies try to copy when they hire people from large corporations - they bring the toolkit and professional training. The exciting thing about KSB is that it's a very tradition-conscious company with loyal, competent employees who have seen all facets of the business. But we also need to develop. We have a strong technical affinity, and now digitalization is coming, which changes a lot. We have many hydraulic experts, but we need more electronics, mechatronics, IT security. We need products that are more electronic. We are constantly evolving, and the fact that we have the DNA for change is shown by our nearly 150 years of history.

Definitely. We see it as our task. The four of us cover the whole range of digitalization topics - my commercial colleague, HR, technology, and also in sales and service. Digitalization is the theme. We already sell a lot through our electronic webshop; we started in 2002 when few were thinking about it. Today it generates revenue in the high three-digit million range. It's not only efficient, but 60-70% of customers inform themselves online beforehand. They know what they want and find it with us. Beyond that, we have remote service - a technician with 3D glasses at the plant, an expert at home who can be deployed multiple times a day without flying around the world. That increases efficiency. Also, spare parts logistics, warehouse management systems - many digital topics. We will build more digital DNA in the coming years.

The combination of both. When you sit in front of a customer, you need to sense where they are coming from - whether they are stressed or angry about your company or a competitor. That's pure people management. But it doesn't work without technical understanding and context. You need to understand roughly what you're selling - not just a pump but also the control system, motor, etc. I had a customer in Japan who said he had three good competitors and KSB. A month later, we became his supplier because one competitor had angered him. That's people management - sensing the moment. But you also need technical knowledge.

That reminds me of an experience when I took over a global sales team. My first call was with a Chilean at 2 AM on a Friday, negotiating the last 25,000 euros. You have to do it yourself to understand the dynamics and lead your people. You have to have won and lost yourself. How much time? I try to be out as much as possible. KSB is in over 130 countries with service workshops, over 30 factories. We are very international. I've been in about 50 countries in my first year. I go to China every two months, India is high on the list. Recently I was in Singapore, Malaysia, Thailand. I always visit customer plants to see how they make money and what their problems are. For example, biodegradable plastics - I was in a factory in Thailand discussing how to increase availability from 98% to 99% and how KSB can help. That's what gets my blood flowing and makes me get up every day.

The most important principle for me is involving the knowledge and competencies of my employees. I've been able to put together a very good team over the last twelve months. There are competencies I don't have - for example, I don't come from the standard business that KSB has, so I need someone to fill that gap. I've assembled various competencies, also through acquisitions in marketing communications. It's important that the team has partly competing but also complementary properties to be most powerful and successful. I am part of the team and have the final word when needed, but the team brings together knowledge for high performance.

You have to remember that the leaders I have also lead hundreds of people and large businesses. For example, the person responsible for standard business handles about a third of total company revenue. The service business is about 40%. They need to be able to lead other leaders, have a winning spirit, and build teams that can achieve goals. I expect them to take responsibility and say what they need. I tell them my expectations and goals, but they are big enough to act independently. Independence is very important.

There are certainly countless situations. For example, when my bosses expected me to replace someone who wasn't performing. I had a case where a manager said the business was barely profitable. I said let's measure it for a few months, and if it doesn't work, we'll close it. But it became profitable. Another painful situation was when my boss wanted me to fire someone, but I couldn't because he had competencies I couldn't easily replace - he knew the business and many customers. So I managed him tightly; he had to call me for every tenth of a percent discount. He hated calling me, but it made him one of the most profitable salespeople, turning losses into double-digit EBIT margins. That was a great experience. Nothing motivates more than early small successes - it's a snowball effect. With teams that previously played in the first league, you can become champions league winners with extra effort. I experienced that; we became market leaders by a wide margin.

We actually didn't want to do consulting. We were interested in large projects and everything that can go wrong - like Berlin Airport and Elbphilharmonie. My partner came from construction. We wanted to give smart presentations and write up our construction knowledge. Then we slipped into consulting projects. It was exciting to see the other side. But I must say, I really enjoy being back on the operational side - being able to take transactional responsibility. That's what gets me up every day. Consulting was a nice phase, but not for the long term. Creating value with a larger team is very exciting.

It's hard for me to judge because I would have to foresee what these talented young people will do in 30 years. We have many good young people coming to us. Recently I met a woman who started in sales and from day one was working internationally on our webshop, flying to Thailand with great English skills. We are trying to strengthen digitalization in HR, looking for not only nerds but also talented IT specialists, mathematicians. We need a broad range of young people to help us advance pump technology. How will they lead? I can see from our own children that they don't see leadership as a motivator initially, but they take on more responsibility, which often leads to leadership in teams. I've seen many young people who are very good at leading in teams, not caring about titles but about team results. They can work in temporary teams. We have implemented design thinking and agile methods. We have a young woman who led a new electronic product from development to market readiness in an agile team. Young people can definitely do that.

That's a good question. Are we doing enough? We are known in the industry and many young people visit us at trade fairs. But we are not doing enough in overall outreach. We are currently establishing a platform under our brand KSB Digital for temporary external teams and talent pools. It's already online but not highly visible yet. By the end of the month it will be directly accessible on our homepage. The first talent pool meetings were exciting - two young people came out who are interested in working for us and we have long-term interest in them. We also find many through conventional channels, and many find us because we have a good image and brand. I was impressed at the IFAT and Achema trade fairs where HR was present and spoke directly with students. Talent acquisition must be present everywhere.

Thank you very much. I can only say that you can find much more than you think on our YouTube channel. You can inform yourself very well about KSB there. Thank you for giving me the opportunity to tell a few things about KSB. I hope your listeners now know a bit more about us. Maybe they think he has charisma. Thank you.