#tomorrowtoday: Emese Weissenbacher, CFO MANN+HUMMEL

Thank you for the very nice introduction, Sebastian. So how I have perceived this change and what has kept me at MANN+HUMMEL for so long are actually two things. First, the people and thus the culture of the company. This culture created an environment where top performance was always motivated, and this performance was always visibly recognized and rewarded. The second point why I am still at MANN+HUMMEL is the development of the company. When I joined MANN+HUMMEL, it was just 800 million euros in sales, and today we are almost at 5 billion. So I think it goes without saying that on this growth journey, an enormous number of opportunities arose for me to grow as a person, professionally and as a leader. And because I had so many opportunities and was always supported, challenged and promoted to develop further and take on new tasks, that simply made my job always interesting. And that's why there was no reason for me to leave the company.

First of all, in 2016, we looked at about 100 market trends to find out which trends will really significantly affect our business. We defined the trends sustainability, mobility and digitalization for ourselves. And as you said, this transformation is not the first in the company's history. Nevertheless, this transformation has a different complexity. This profound change in the automotive industry is forcing us to rethink our business model. We want to evolve from a pure automotive supplier to a diversified solution provider for filtration technologies, thus contributing to cleaner mobility, cleaner air, cleaner water and of course cleaner industry. We defined the strategy based on a concept called 'Dual Transformation' by Scott Anthony. With this concept, we defined three transformation strands for ourselves. The first strand defines the transformation of our core business in the automotive sector. The second strand describes how we transfer our core technology into adjacent markets or industry segments. For example, we are building our market presence and market position in the heavy-duty sector, on-road, off-road, and in the industrial sector. And we describe a third strand, which is new business models. Here we count the transformation away from the automotive industry towards life science and environment, as well as new digital business models. The most important question is implementation. That's why we say strategy plus implementation is the transformation. Without a strong implementation capability of the organization, we couldn't really realize the strategy. In the past, we tried different methods, then we returned to a very classic project organization and project management. That led to us running almost 800 projects in parallel, and we noticed we were losing focus. You surely know the classic hockey stick effect: we always saw a shift in the realization of financial indicators on the timeline. The organization always hoped that next year would be better. Last year, my CEO colleague and I decided we had to change our approach. We had already founded a Transformation Office in 2020 because we thought the pandemic was the black swan. However, 2021 and 2022 taught us that this storm keeps perfecting itself. But it was good that we founded the Transformation Office in 2020. Last year, we introduced an OKR-based method that helps us, as you said, to cut the big elephant into digestible slices. We learned that not input and output are important, but outcome and impact. And within the framework of 'Puzzle Pieces', we measure the progress of this outcome and impact. With this method, we also believe that we empower the organization to decide faster, work more independently, and take responsibility at a lower level. With this approach, where progress counts, we generate success. This progress and success make one proud, and thus we also bring emotions into strategy implementation. We assume that we will reach a state where strategy implementation becomes fun.

I believe that in this complex world we live in, this VUCA world, different perspectives are already needed. And if you have only a CEO organization and only one CEO decides, then I think a counterweight is missing. Therefore, I take on two roles, and that suits me. If you look at my career, I am not a classic CFO. I have a lot of operational background because I was on both sides of operations and business units, and I am simply interested in the business. So one role is more of the classic CFO role: I am the guardian of the treasure chest. In this role, I have the task of allocating the limited financial resources so that the range of initiatives is designed to contribute to our strategy in the most effective way possible. The second role we call 'second shift CEO'. In this role, I am at the same level as my CEO colleague, and I am his sparring partner, coach, and strategic counterweight. I accompany him in this role. We exchange ideas, we deal with current and future topics and strategies, and thus we run the business together. I think it's important that I never saw myself as a consultant, but I want to take responsibility. That's why I am part of the solution, part of the implementation, and part of the steering.

That's a very, very good question. I actually ask myself every day: Am I really able to stay on the ball in this fast-moving world? I don't have a special recipe, I don't. I think it's more important what mindset we have. We need to go through the world with open eyes, open ears, and a keen mind. Through this filter, I let many topics pass. I go to selected events where I believe the topic is actually current and relevant for us, if not today then tomorrow. I continuously maintain contact with large consulting firms because you are in contact with so many companies, and I firmly believe that you can give us topics that could be relevant for us. I also learn from the CIO, CTO, and others. We talk regularly. At least once a year, we engage with futurists and study their perspectives. It's really difficult to derive concrete actions from that because sometimes it's far in the future, but I think it's important to at least hear these topics.

Yes, for me that is certainly data mining and process mining. Because I think, also from your experience as a consultant, you know that business process reengineering for a long time only existed on paper. But because we couldn't really digitally trace the digital footprint of processes, it was extremely difficult to discover inefficiencies, or only with a lot of effort. We now have a cooperation with Celonis, and you are also involved. It is already eye-opening for the organization. I believe those involved now look at processes with different eyes. And since we're mentioning this example, I use it to better prepare for the migration to S/4HANA. Because if we can standardize processes to that extent, we get closer to the one-template approach. For me, that is currently the only approach that can turn the migration to S/4HANA into a business case.

This is a real challenge. In earlier strategy cycles, we knew that communication is key; without talking much with people about our strategy, we can't bring it closer to the organization. We also made videos on different topics, but we noticed when visiting locations that it wasn't landing. I was often confronted with the statement 'We don't know the strategy.' And at the top, we thought after so much effort, talking, videos, and so on, it should have landed. But it's a fact, we had to accept that it wasn't the case. I think the mistake is that we managers tend to believe that if we make nice PowerPoint charts, describe the strategy in bullet points, present the development of key financial figures, or tell how we want to grow in different market segments, people will understand where we want to go. But that's not the case. Within the framework of the OKR approach I mentioned earlier, we also learned that strategy must be emotionalized so that we can emotionally touch employees, awaken their longing and passion, and get them to participate in shaping. To achieve that, my CEO colleague and I put our picture of the company on paper. We had the task of describing the company in the form of an essay as it would actually look on December 31, 2026, very concretely, even what has changed. I can tell you, that was a very challenging task. After two hours, I didn't have much on my paper, but we never give up, right? I sat down and actually wrote down that picture. With this target story, we then went out. And we believe, and the feedback shows, that it is well received and people now understand better where we are going. Naturally, this group target story is then broken down into different modules and Puzzle Pieces, and they are also concretely described verbally with outcome and impact. So we believe we are taking the organization with us. That's why we are also working on our leadership culture. We have newly described our leadership journey and, of course, our leadership principles.

As I mentioned earlier, we have three transformation strands, and digitalization runs through all three strands. However, we also define three directions for digitalization, which define how digitalization changes our business. The first transformation direction is how we make our products intelligent. The second direction is how we digitalize our processes. The third direction is digital business models. Taking the first direction, a very simple example: if we offer a tractor manufacturer an air filter equipped with a sensor, we give the tractor manufacturer the ability to monitor the filter performance and define the optimal time for filter replacement. And then even link this time with the service of an oil change or a brake pad change. This creates added value for them because we help extend the operating life of their engine and vehicle. Regarding the digitalization of processes, we spoke earlier, we are now heavily using Celonis. For digital business models, we know the market is not yet ready for us to actually offer clean air as a service or clean water as a service. Nevertheless, we digitalize the value chain to the extent that we enable our customers to run their own digital business models, such as e-commerce. We are B2B, so we have no B2C platforms, but we empower our distributors to operate B2C e-commerce, for example. To implement this digitalization strategy, we also created certain framework conditions. One is the further development of our shared service approach to standardize processes end-to-end. Standardization is the basic prerequisite for digitalization. Then we founded a Digital Transformation Office and appointed a Digital Transformation Officer. Then we set up a Digital Hub organization, creating a nucleus where we build a talent pool. These people help us break rigid structures, ingrained routines, and traditional ways of thinking. Naturally, that always creates a conflict that must be managed with the traditional part of the organization, because the question is how to make digitalization tangible and how to get the organization to actually adopt what emerges from the digital hub. Last but not least, we also have Digital Angels, young people who belong to the digital natives. They help people like me to adopt new technologies, to learn how to work better with them. For example, these digital tools that Microsoft offers. But I think the mindset is crucial there, and that's the biggest challenge: taking people along and taking away their fear that digitalization will cost their jobs, but rather that it takes many things off their hands and makes life easier, so that employees can focus on the essentials.

Well, maybe I'll start with the second question. In our discussions, diversity comes from my personal view but also from MANN+HUMMEL's view quite short: it is very strongly reduced to the topic of gender. Gender mix good, then diversity is checked off. Gender mix bad, then diversity is bad. And if we look at our management team, we see different nationalities. We have a Czech colleague, someone from Cameroon, our CEO is American, we have a Norwegian, I am Hungarian from Romania. We are of different ages. That's how we understand diversity. What is important is that each of us, as I mentioned earlier, moves through the world with open eyes, open ears, and a keen mind. Coming back to the topic of women's advancement: I think it is important that every young woman acquires the realization that 'can' begins with 'want'. What I sometimes observe is that some young women are not yet ready to really want to take responsibility. Taking responsibility requires going the extra mile, and for that you also need support in the form of mentors. Over the years, I have had many mentors; my supervisors were also my mentors, and by the way, they were all men. Last but not least, it is also important that young women build a network behind and around them so that all the topics that come up alongside the job, like organizing family life, children, can also be well caught. Because the truth is that women still take on the majority of child-rearing and housework, no matter how well they divide it with their partner or husband. And the truth is also that when we look at gender diversity in our company, where we need to take action, it's more in the technical professions: R&D, manufacturing, IT. And why is that? The pool of female talent for these professions is simply much, much smaller than that of male applicants. Here, I think Germany needs to do more to promote STEM subjects much more so that we naturally have the young talent we need. When I look around our societies in Europe, we have good examples outside Germany, in Spain or the Czech Republic, for example. In Spain, almost the entire management team is female: production management, quality management, work preparation, development is led by a woman. So there are really good examples, and that means it is possible.

I don't know exactly how I will celebrate it, but that I will celebrate it is certain. And I will also celebrate my last 50th this year. I will certainly celebrate with colleagues, and then also with family and friends. But it's incredible how the time has flown. I remember exactly the day I joined MANN+HUMMEL, 30 years ago. And if you look into the future, where will MANN+HUMMEL be in 30 years? What will MANN+HUMMEL look like? Well, believe it or not, we recently decided that our next strategy cycle will go until 2030. Then I thought, let me ask ChatGPT what it says. Go ahead: ChatGPT said, 'As an AI assistant, I cannot make precise predictions about the future. However, it is possible that MANN+HUMMEL will continue to be a leading company in filter technology in 30 years. With advancing technology, they could develop innovative solutions to meet the growing demands for clean air and water. It is also conceivable that they will expand their product range and focus on sustainable solutions to promote environmental protection. Ultimately, the future of MANN+HUMMEL depends on many factors, including technological developments, market trends, and corporate strategies.' So, my answer is that we are still a family-owned company with vision, leadership in filtration, and the mission 'We separate the useful from the harmful.' We are globally known as the leading filtration company and the brand for filtration. MANN+HUMMEL is no longer a hidden champion; we are pioneers in providing new business models together with solution providers for clean air, clean water, and clean mobility. We drive the filtration industry forward. We are clear technology and opinion leaders in our industry. MANN+HUMMEL has become synonymous with filtration. And that's what I wrote in our target story. That's quite a statement. What I also learned just now is that generative artificial intelligence is obviously a friend of the C-level.