Innovation through transformation
Ellen Kuppens, vice president of human resource at multinational life sciences and materials company DSM Netherlands, talks to Russell Gilbert, managing editor of RSM Outlook, about the importance of innovation, the crucial human factors, and how new ways of working will enhance the company’s innovation capabilities.
Story by Russell Gilbert
As a global organisation with 24,500 employees and annual sales of €10 billion, DSM is acutely aware that sustainable business success in highly competitive markets requires great speed, agility and flexibility in innovation. To facilitate this, the company is currently engaged in a major transformation process.
For Ellen Kuppens, central to this transformation are new ways of working and a rethinking of traditional models of employment which, ultimately, will create a more innovation-driven business culture.
Russell Gilbert (RG): Thanks for taking the time to share your thoughts with readers of RSM Outlook magazine. As a first question, how important is innovation to DSM?
Ellen Kuppens (EK): Innovation is the lifeblood of our company. It is through innovation that we stay ahead in extremely competitive markets. At the same time, we want our innovations to have a beneficial impact on society, not just through the products that we make, but also in the way that we make them; for example, by reducing energy consumption and waste by-products. Our approach to business is very much to add value across the three dimensions of people, planet and profit.
RG: Sustainability as a business philosophy is very much a driving force within DSM?
EK: Yes, very much so. Sustainability is at the core of our strategy: it’s in our DNA. Involving stakeholders, including customers and NGOs, is crucial as they bring an outside-in perspective to the innovation process. Partnerships are very productive and bring great value to both parties. Working together means we not only have access to the knowledge within DSM, but we also benefit from the expertise brought in by partner organisations when identifying what developments or improvements are needed. And the cross-fertilisation of ideas in tandem with knowledge exploitation helps us to inject innovations into other areas of our business.
We want everyone – inside and outside of the organisation – to develop an innovative mindset. This is why we’re transforming the DSM culture through a cultural change agenda that will encourage the conditions in which that mindset can flourish.
RG: What are the conditions needed to create this culture of innovation?
EK: Diversity is absolutely essential. However, to make the most of the diversity within the organisation there has to be inclusiveness. DSM has always made products of which it was proud and that add value for our customers and society. This level of innovation requires increased speed and agility today. It’s a challenge that I know a lot of large companies are facing right now.
RG: How are you convincing people to buy in to the transformation?
EK: First you have to be completely clear about the changes you want to make and why they’re needed. You also have to create a common language within the organisation so that everyone clearly understands what is meant when we’re talking about issues like the outside-in perspective or collaboration for speed.
I think we’re very fortunate in that everyone who works for DSM has a clear understanding of our ambition to positively impact future generations through what we do. Our people understand that, like many other companies, DSM faces heavy competition, especially from countries such as China. They understand we need to change the ways in which we work so that we can focus on developing the innovation breakthroughs that will keep us ahead of competitors.
Changing the culture within an organisation is very challenging and requires a step-by-step approach. We measure our progress by various means, including an engagement survey that enables us to see the ground we’re making and what areas need more effort. The purpose is to make the heart of the agenda very real for individuals at a personal level.
RG: People can be notoriously resistant to change. While DSM has a very positive story to tell, has there been resistance to the transformation agenda and if so, how are you overcoming it?
EK: It is true; there is always some resistance to change, so it’s important to keep focusing on the positive aspects. As a good example, at the end of every year we have what we call our “glass half full week”, during which we pay extra attention to people’s concerns, address them, and come up with solutions to turn negative feelings into positive ones. It’s an effective way to create positive energy around the change agenda. It’s important that people feel that what we’re proposing benefits all – both the individual and the company as a whole.
Diversity is an important building block for change. If the members of a diverse team really listen to one another, have clear goals, build on each other’s strengths and make the most of the different perspectives the group has, then you have a great environment for creating ideas and developing innovative solutions.
RG: So the goal is to create a culture within DSM in which idea generation and innovative thinking is the norm?
EK: Absolutely. We have a well-organised framework in place to help us get the best out of people’s ideas. Front-end loading – undertaking feasibility analyses for the conceptual development of projects – really helps. We approach ideas with the questions “what are we starting?” and “what problem will we solve?” To find the answers, we seek as many different perspectives as possible from inside and outside DSM. This really adds value, particularly in understanding, avoiding or finding solutions for the risks a project might encounter.
It’s really important to listen to different opinions, which brings us straight back to diversity and inclusion. Having diversity without a culture of inclusiveness is self-defeating. We have facilitation techniques in place that make sure everyone’s ideas and opinions are heard. And an innovation monitor enables us to track and assess what progress we’re making. Ultimately, we want innovation to be in the genes of all our people, and the only way to do that is to listen, encourage and support.
RG: In some areas, DSM currently has 20 per cent of its people on flexible employment contracts. In a recent newspaper article you stated that this might rise to 40 per cent. Why is that?
EK: A streamlined and more flexible workforce is essential for DSM to maintain its front runner position as world-class innovator. Historically, innovation teams had the time to develop the knowledge they needed to bring projects to life. Technology has changed the world and speed has become critical. This means that knowledge needs to be accessible immediately, even when it’s not available in-house.
Hiring consultancy firms is one route, but that’s an expensive option. There is an incredible amount of individual knowledge and experience in the minds of our people. We want to tap into this huge resource at the right time.
In R&D and innovation functions in particular, it makes good sense to find more flexible ways of working, through temporary contracts or collaborations, for example, so that we have the knowledge we need when we need it. At the same time, our innovation centre partners with universities, entrepreneurial start-ups and NGOs because it’s often much more practical to use and build on the expertise of others than it is to try to develop it yourself.
RG: This approach will become pervasive?
EK: Yes, although it will take time. DSM, and we’re not alone in this, has an ageing workforce. Inherent with it is the traditional “job for life” mindset. This is a challenge because we need to work with that perspective while at the same time adapting the organisation to the new mindset.
The only way we can be a high-performing company is if everyone is a high performer. There are differences between a high-performing 30-year-old and a high-performing 50-year-old. Bridging these differences and getting the best out of both can also be a challenge.
RG: Today’s generation is completely immersed in technology while preceding generations are not. Is this a factor?
EK: Pre-digital generations have adapted to technology as it’s become ubiquitous. Today’s generation looks at and interacts with the world completely differently and quite naturally this requires new ways of working and new ways of innovating.
In our technology-driven world, knowledge is much easier to acquire, but at the same time is much harder to keep. Look at our Dyneema product range, which we market as “the world’s strongest fibre”. In the past we could keep the secret of what makes it so special under wraps for a long period of time. Now though, that knowledge is all too quickly out in the open. That’s why speed and agility in innovation is so important.
RG: To the ageing workforce these changes must seem very dramatic.
EK: To some it might. However, you also see that some fully embrace the digital world. Faced with a shift in traditional employer-employee relationships, we must have an open dialogue with employment unions and stakeholders about the nature of flexible working and how best to make provisions for people in areas such as sickness coverage and pension rights.
Regardless of the changing nature of working relationships, it’s very important to me that DSM is an inspiring place for people to work. In the future, not everyone who works for us will have a DSM name badge and an employee number, but that doesn’t matter. I want people to be involved because they believe in our mission. It’s through belief that people become engaged in what they’re doing. It’s profoundly important to remember that people create innovations; technology by itself doesn’t.
The only security employers can give to people is to invest in them; make sure they have the skills that improve their employability, not just for working at DSM, but with any company. People are not disposable commodities.
To bring this full circle, to inspire people to give their best we must focus on their strengths. In turn this leads to the innovation breakthroughs that add value for our customers and benefits society at large. At the same time, being innovation-driven enables us to deliver value to investors, which is also our responsibility. It’s through this triple bottom-line value cycle of people, planet and profit that sustainability drives the business.
RG: Ellen Kuppens – thank you very much.
This article first appeared in the Winter 2014 issue of RSM Outlook.