Innovating by combining existing things in new ways at Deutsche Post DHL

By: Anders Frick

Petra Kiwitt is Executive Vice President of DHL Solutions & Innovations at Deutsche Post DHL. The Group with nearly 500.000 employees in 220 countries provides package and mail services as well as comprehensive logistics solutions for customers all around the world. Petra Kiwitt’s biggest challenge is to stimulate and coordinate innovations which ultimately will lead to even more efficient logistic solutions for the customers. A new built Innovation Community brings people together, lets them share ideas and sometimes encourages them to do ‘old’ things in new ways.

What differences have you seen regarding solutions and innovations during your time at Deutsche Post DHL?

– I would say innovation was always important for DHL and for the Group. The main difference is that nowadays we are managing the innovation processes in a more structured and organized way and on a global level. This was also the reason for setting up the DHL Solutions & Innovations unit a year ago, an entity which didn’t exist before. The fact that we directly report to the CEO of the Group demonstrates the strategic importance Deutsche Post DHL is attaching to this new inter-divisional approach.

– We increasingly work with the collaboration of our huge partner network. It’s a combination of our own experts, product managers and external partners. These partners are big technological companies like Oracle, Intel, IBM and SAP, smaller specialists such as 7ID, Infoware and Tricon, research partners like MIT in Boston , Fraunhofer Institut and DLR as well as industry partners such as the Metro Group.

As I see it innovation is not only about research and development of new technologies…

– We are focusing on bringing existing solutions to the market faster. As I see it innovation is not only about research and development of new technologies, a big part is also integrating existing solutions. We are a global company so what we do a lot is to focus on developing cross divisional solutions which simplify the business lives of our customers. There are a lot of already successful products or solutions that can be combined and standardized to even better meet the requirements of many of our clients.

– So innovation is not solely about new technologies. I would say a big portion of my organization is to bring together established and interesting products, services and procedures, develop them further and group them in a new way that accelerates the logistics business of various industries.

 

How do you inspire your colleagues to be more innovative?

– By linking people together. We are for example working to establish ‘innovation communities’, both internal and external, as communication is extremely important to be able to reach out and get people involved and inspired. You have to involve not only the top management –  we have to try to reach all sources who can provide valuable input to the solutions and innovations process, i.e. people from different business units, in different functions and with different social and cultural background. That’s where the corporate culture starts getting impacted.

– Since Deutsche Post DHL exists in 220 countries with about half a million of employees, there is probably a person or an entity out there which has created a solution that could be used at other places too. And in order to do so, we need to link people and business units together.

– We use various tools to connect and inspire people.  We use the more conventional printed media, but we also have a very sophisticated intranet including document sharing, web seminars and an idea management system – dialog is an important factor in this. For research and development colleagues, there is a special zone for sharing documents, best practices etc.

– Often innovative people are not only benefit driven, so in order to best foster the creative potential of our employees we have to involve them. And everybody should be involved – from operations and sales to middle and top management.

 

Having those tools in place is not the same as people actually using them – what are your thoughts on that?

First of all you have to realize that this takes time.

– You are right, we can offer our people different tools, but the big challenge is to get them to actually use them! How to attract them then?  First of all you have to realize that this takes time. We have different incitements. One of them is our ‘Idea Management’ program which has been existing for ten years. In 2009 alone our employees submitted some 227,000 suggestions for improvements and the benefits derived for Deutsche Post DHL amounted to € 262 million. Our employees value this tool as an opportunity out forward their own innovative proposals and therefore to contribute to the company’s value creation – of course, employees submitting most beneficial ideas will also get rewarded for this. But as I mentioned before we are in the process of implementing various tools and processes, amongst them our annual DHL Innovation Award. This annual presentation recognizes ground-breaking logistics solutions in the categories of “most innovative customer,” “most innovative scientist” and “most innovative employee.” The Innovation Award honors people with special developments, publicizes them and helps launching new ideas into practice.  The selection of the award winners is assisted by a commission of business and scientific experts.

 

How are innovations managed at different levels of Deutsche Post DHL?

…everybody should think about innovations…

– Due to the wide spread network of our company innovations at Deutsche Post DHL are handled in a combination of a sometimes decentralized development process and the consolidation of solutions on corporate level. Last but not least this is the reason why we established the DHL Solutions & Innovations organization. Nevertheless, even if I have to repeat myself here, everybody should think about innovations, not only people at corporate functions, like my team and me. And I do certainly not want to be the bottleneck for innovations, rather an orchestrator for collaboration to drive innovation.

– I just talked to the innovation head of another company from a different industry who told me that they encourage their employees to think about new things for about ten percent of their working time. Not everybody is innovative, but I agree that it is good if people also try to think outside the box a little. But you cannot force people to do this. You have to offer it and encourage people.

 

Why there is a need for a new unit called Solutions & Innovations at Deutsche Post DHL?

…we need to transform ideas and innovations into solutions for our customers.

– We need to integrate ideas from different parts of the Group. And from a market perspective, we need someone who can look for the latest product portfolio. Finally we need to transform ideas and innovations into solutions for our customers. This is why Deutsche Post DHL established an organization looking after solutions and innovations rather than implementing a ‘standard’ research and development department. A year ago, the Group’s new strategy was presented, in which both solutions and innovations were put together, and focusing on integrating the different parts of the company to be able to come up with even better solutions to meet the needs of our customers. For our first full year we will focus on three topics: ‘Recall Solution’, ‘City Logistics’ and ‘Cold Chain’.

Which other companies do you consider being good at innovation management?

I have three personal favorites; Apple, Audi and Ikea.

– Sometimes you can read something which is innovative and you can get inspired, but usually every industry is somehow different. But I have three personal favorites; Apple, Audi and Ikea.

– My favorite quotation from Steve Jobs is: “Innovation distinguishes between a leader and a follower”. Apple has pretty much a similar approach as we have. It is not just about developing new technology, but rather about repackaging existing technology into new applications which make the life of the users easier. We at Deutsche Post DHL call this ‘simplifying services’.

– Audi established themselves next to BMW and Mercedes as a successful player in the premium car segment by creating a new category – ‘technology leader’. They became leaders by using aluminum as main material for the car and their four wheel drive technology. Once again, it is about using existing things in a new way, developing them further and integrating them. Once again, combining existing things can bring out new and innovative solutions.

– Ikea builds quite ‘basic’ furniture but for years their racks, chairs and tables are part of a new and holistic approach. Furniture shops in Germany and elsewhere in the world are often old fashioned, but Ikea is a ‘feeling’ and this creates a different living experience – it already starts when people are anxious for the launch of the new Ikea catalog und does not even end when complete families leave their homes for their shopping excursion to the Ikea outlets on weekends. Ikea sells houses now!

…you can be successful if you put existing things into a new and different context.

– All of these examples prove that you can be successful if you put existing things into a new and different context. This was the case when DHL invented the express delivery industry. Until 1969, there was no express industry. In those days shipping services could become expensive, much due to the fact that toll clearance and administration in conjunction with the unloading of ships at their destination was a very time consuming business. The founders of DHL started to use airplanes to fly in all the paperwork in advance, so that when the ships arrived you could start unloading at once. This saved a lot of both time and money. This was not about new technology, the ships were already there and so were the aircrafts. The new thing was combining these existing things in a new way!

 

What are the biggest challenges to make innovation management most efficient, especially in the logistics industry?

Another challenge is to have a long term perspective…

– It is to know what the customers want – now and especially in the future. This enables you to take the right decisions – mostly. Another challenge is to have a long term perspective, so you don’t shut down potential money makers too early. Nevertheless, at the same time you – and the management – have to accept that there is still the chance that you might fail. We are actively working on the innovation culture in order to allow more risk taking or “try and error mentality”.

– One very successful example for all of these three aspects it’s the DHL Packstation, an automated solution where you can send and receive packages in a convenient way 24/7, every day of the week. The project started in 2003 and required some inspiration, time and resources. We were ahead of our time in the beginning, but the top management believed in the concept and continued to support it. Now we have about 2,500 Packstations all over Germany. Consumer surveys confirmed that the customers love their Packstation.

 

And finally; what is the most fun you had in your current role at Deutsche Post DHL?

– I enjoy doing diverse things and I feel I have one of the most diverse jobs in the Group. The various aspects of innovation, my work with so many different colleagues, gaining results and being involved in the future development of the Group is what fascinates me. This motivates me to motivate others.

– I enjoy seeing the people’s reactions when we show them our latest developments in the showroom of our DHL Innovation Center.  It’s a combination of showroom and laboratory and people get excited about our new solutions.

– Logistics is a people business as it is for the development of solutions and innovations: you work in a team, you share knowledge and experiences and the results you achieve are based only on collaboration.

By Karin Wall, Chief Editor and Anders Frick, Freelance Journalist