“There’s no evolution in industry digitalization, there’s only a revolution! Everything needs to be set up differently, in a new way! That’s why I will repeat the words of my colleagues from Kolektor Ventures and Kolektor Labs, and say that innovating for the industry has never before been this sexy, because there are many problems and pains that beg to be solved but at the same time we also have the ultimate test environment and all the possible resources – from financial to people and tech resources – that an idea or young startup needs on their path to success!” This is how Valter Leban, board member of the multinational corporation Kolektor, working in the field of highly specialized industrial manufacture, describes the transition from words to actions – which also happened with the foundation of Kolektor Labs and by now already six investments into startups. He also reveals how managing processes for establishing smart factories of the future is connected to terms such as vision, wellbeing, passion, and empathy.
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If you look back to the beginnings of your journey in leading the digitalization process in Kolektor, what was the thing that needed to be changed first?
When I tackled digitalization in Kolektor about two years ago, I soon discovered that most people think it’s an evolution, but in fact there is no evolution in digitalization of the industry. It is, in fact, more of a revolution, where everything needs to be set up differently, in a new way. So, we shouldn’t let ourselves be caught in the trap of doing the same things in a slightly different way. In the industry, we use Product Lifecycle Management to manage the entire lifecycle of a product – from the idea, technical planning and manufacture to sales, servicing and recall. This system simultaneously ensures an information backbone, but until the emergence of the internet of things, we were actually in a sort of an information eclipse, without real-time data. Now we have this data and we would like to set up sensors everywhere. Then we come to a sea of information, where we find it difficult to separate the forest from the trees. And how to now correctly look at the data, analyse it and connect it … Well that leads us to analytics and artificial intelligence.
Besides artificial intelligence and the internet of things, a popular topic in the field of industry digitalization is mostly platforms. What is actually their role?
We talk a lot about platforms because at the very beginning of introducing new approaches, we might be able to work manually for a while, but in time, everything needs to be automatized. And a platform following the plug & play principle enables us to plug in the different sensors, placed across industrial plants, and they’re already working, meaning everything is quickly connectable. And that is now the Holy Grail that everyone is looking for, it’s the basis for the development of smart factories. Until these platforms don’t exist, things aren’t scalable.
And has anybody found this Holy Grail yet? Do such platforms exist already?
Yes, they exist, but currently a lot of stories and PowerPoint presentations are behind them, showing that there is something … A good salesman quickly pulls you into a story, but once you’re in, it’s like quicksand that pulls you to start building something … But in order to launch everything, it’s first necessary to make a leap of thought.
This leap of thought is probably the prerequisite for introducing anything new?
That’s true, it’s the foundation. Like the azimuth or direction in nautics. Of course, one needs to study things first, understand them, only then do such challenges become simple. The boards of big corporations usually have alpha males who like to be informed, who like to be “in”. And currently, digitalization is “in” and everyone is talking about it. But if someone gave us a polygraph test and measured whether we believe everything we’re talking about, that’s a different question. Technically we are all for it, we all want to go into this direction, but the problem is that everyone is talking about what we’ll do, not why. And the why is the central question! That’s what we need to clear up first …
And how are you answering this “why” in Kolektor?
Kolektor is being transformed because of everything that’s happening in the business environment. And inside these changes, we need to keep effectiveness and create value. In the industry, there are still plenty of losses, planning needs to be even more optimized … After all, the wish of every individual and company is to be successful, but quality of life is also important. Kolektor tackled digitalization because we actually wish to test all these things, because we believe it’s possible to work differently, more effectively.
You say things will be done differently, but people will probably also live differently? Do you ever think about how all these things, like robotics, artificial intelligence … will influence the way of life?
When smart factories become a normal part of our reality, we will probably reach a certain comfort zone where we will worry about different things than we do today … But if I return a bit to the why … I think today we live in the fiction that we’re planning things, which isn’t true at all. Yes, we’re planning them by mentally determining the direction – for example, I’ll take a trip there and there. But I can’t plan a trip, in the sense that I’ll be here today and there tomorrow. What if something unexpected happens in the meantime, for example your car breaks down? I need to adapt to that. It’s the same with manufacture. To adapt more easily, it’s good to have solutions as soon as possible and on-site. And if we have technology in the background, capable of transforming big amounts of data into sensible decisions, then that is also simultaneously the answer to why we do this in Kolektor.
In a big international company, how do you make sure that the direction is equally clear to everyone? Especially considering, as you say, that you first need to make a mental leap?
As I said, a transition needs to be made. In this case, we are talking about digital transformation, but it’s a principle that can also be used elsewhere. Every time you start something new, you need to have a vision. But even though this word is very cliché in the business world, the vision is actually most important! If you only go somewhere, without a purpose, without a mission and without passion, then you’re just a simple wanderer. That’s the complete opposite of someone who says I go because I believe in it! And in Kolektor, we believe that we will continue to grow, that we will have bigger sales, that we will have bigger value added and profit at the end of the day. But we’re also going in order to change, to work differently, to improve the working conditions, to ensure higher wellbeing.
It's interesting how a conversation on factory digitalization moves to terms such as vision, passion, wellbeing …
At the end, that’s what’s essential. People respond to stories, stories drive us forward, we can identify ourselves with them. Nothing starts outside of us, somewhere externally, everything first starts in our heads, then it’s a matter of motivation to get on the road. But what motivates us and drives us forward? That something that we don’t have or that we believe we could have better.
If we return to ensuring that a ship as big as Kolektor is sailing according to the charted path of digitalization … Where are currently your biggest challenges – on the side of technology or competences and people?
The biggest obstacle is the status quo of mentality, the fear of change. I’ll give an example … Imagine a cycling race as important as Tour de France or Giro d’Italia. Everyone is driving in a group and nobody pulls forward. Why? Because we’re stalling. But – the one who pulls forward first, comes to the goal first. And here is the same story. You simply need to believe in digitalization, it’s a megatrend that’s pulling us forward. With artificial intelligence and practically unlimited computing power, supported by an enormous amount of data, undreamed-of possibilities and opportunities are opening, which I simply can’t imagine. I only know that it’s exponential growth and that it’s a train that we simply had to jump on.
Probably also because you’re a successful company that needs excellent staff in order to continue to ensure its growth and development?
Of course. Satisfaction of people is measured in several ways – a higher salary is most important to one person, to others, it’s a bigger choice of jobs, roles and functions, the possibility of working abroad and so on. We need to ensure that this feeling doesn’t stop in the generations to come, that everyone who joins us sees possibilities and opportunities for themselves, is motivated by interesting work and challenges brought by change. A recent survey we carried out showed that our employees are fond of change. And that, even and especially in the time of digitalization, is very very precious capital!
When it comes to the challenges and opportunities brought by Industry 4.0, why is it important that Kolektor has its own venture capital fund, and that Kolektor Labs as an agile development environment?
The industry was the natural choice for us, that’s just where we’ve been traditionally present. Our own automatization and digitalization also need new technologies, new tools and new solutions. And this is where our opportunity for growth is. Of course, it’s good to build a certain logic around this and, considering that the “open innovation” concept is bringing a new paradigm for research management, it was logical for us to found our own venture capital fund Kolektor Venture and ensured an agile development environment in Kolektor Labs. That is why I will also repeat here the mantra of my colleagues from Kolektor Ventures and Kolektor Labs that innovating for the industry is actually sexy, because the industry really has a lot of certain problems and pains that beg to be solved, while at the same time we actually have the ultimate test environment and all the possible resources – from the financial and people to tech ones – that an idea or young promising startup needs on its journey to successful commercialization. With the fund and Labs, we are crossing from words to actions, from plans to implementation.
How do you motivate yourself for all these changes and shake off the worries and uncertainty that changes bring?
I think that I’ve always been a startupper by spirit. And I actually believe that the most successful stories can be developed from the fact that you take a problem and develop a solution for it because of your own needs, in short that you succeed in solving something for yourself. And it’s the same in the corporate world. Everything commanded by the Industry 4.0 and smart factories, we need to solve for ourselves, for Kolektor, anyway. And the next logical step is to offer these solutions to the market. And if you are asking me about my personal motivation, I’d like to emphasize that at the end, every business consists of people, with their own values and feelings. And when do sales usually happen? When something vibes with you personally. In short, empathy is also important in business, maybe even more than we realize at first. And at the end, we all want to live better, increase the wellbeing of ourselves and our descendants. And I think those can be very effective motivators.
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Get in touch with Kolektor Ventures!
If you wish to introduce yourself to the team of the Kolektor Ventures fund or have a suggestion for a project that could be interesting to Kolektor Labs, send an email with a short presentation of your business idea to mateja.lavric@kolektor.com or get in contact with them through the contact form on their website www.kolektorstartup.com.
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Kolektor
Valter Leban
Kolektor Ventures
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