Clarity and credibility
have become
invaluable
This week we get Up-Close with André Heinz, Chief People & Culture Officer at Celonis and former Chief Human Resources Officer at Siemens Healthineers. Join us in this interview as we discuss with André how the role of a people leader has changed over the years and Celonis’ approach to understanding the needs of their employees.
What is your career highlight to date and how has that influenced you as a leader?
So, I have pondered that and there is a bit to ponder as it has been 26 years in this profession for me but, honestly, the move to Celonis stands out as my highlight. I came from a much larger corporation —60,000 people, a fantastic business with a great purpose, highly profitable, and amazing people. Yet, making that wild shift from 60,000 to 600 employees at the time, I completely underestimated what lay ahead, if I am honest. Reflecting on it, it has been quite humbling because it is an entirely different environment. In a hyper-scaling company, the challenge is not managing complexity, as in large corporations; rather, it is about managing the speed of change. Considering that, we tripled the company in two and a half years. I have learned a great deal about decision-making in a pioneering environment and scaling the culture at that rapid pace.
How do you think the role of a people leader has changed over the years?
I love this question too and I have been contemplating it quite a bit. It is always beneficial to receive such questions; they prompt reflection. Throughout one's career, there is an evident shift from starting as a first-line team leader to reaching the C-level. I would summarize it such that when you are a fledgling leader, your expertise significantly influences your role. You usually step into a team leader position because of your knowledge. You are closely connected to the issues you are solving. At the C-level, my experience tells me that you have to make numerous decisions despite having incomplete information. Intuition plays a much more substantial role than expertise might.
Thinking about leadership over the past 20 years, three aspects strike me as significantly more relevant than they were before. The first is about purpose, which has become crucial. Observing the challenges globally and how governments struggle to resolve issues independently, it is clear that business corporations need to play a role in collaboration and contribution. Talent now expects companies to define their contributions to global problems and how individuals can participate. It is a shift from the past.
The second aspect revolves around authenticity and transparency. Particularly with younger generations, I have noticed that they grew up surrounded by fake news, making them incredibly critical and suspicious of corporate deceit. Clarity and credibility have become invaluable in a world where falsehoods and distorted facts are prevalent.
Lastly, diversity, equity, and inclusion have undergone a significant change. Society has rightfully become less tolerant of hierarchical, old-school behaviors. As a leader, fostering a diverse team and creating an environment founded on respect and mutual appreciation for different perspectives is crucial. Failure to adhere to these principles becomes evident very quickly as there have been recent examples where those who did not embrace these changes faced stumbling blocks.
What interesting and game changing trends have you seen emerge in your function in the last year or so, whether that be measurements, tools etc.?
I’m going to advocate a bit for Celonis here and it is not even for marketing purposes! Honestly, process mining and process intelligence offer a truly disruptive approach to examining organizations and enhancing their overall health. I say this because, in my past role, I had no knowledge of process mining. I inherited 600 HR IT systems as part of a carve-out. Despite the constant talk about digitalization, we were rather clueless about digitalizing HR. Frankly, we did not fully comprehend how our function actually operated in so many legacy systems, and many of our processes were not streamlined. Simultaneously, there was a call for increased productivity and pressure regarding our digital agenda. We were experimenting with RPA’s and similar tools three to four years ago to automate processes we did not truly understand.
When I first encountered the Celonis solution, I felt an immediate connection. I thought to myself, "I must be part of that leadership team or become a customer." Just this Monday, I participated in a networking session discussing this very topic with HR-focused customers. We are experiencing an exciting yet challenging time. There is a severe talent shortage, so finding ways to attract and retain talent is critical. Simultaneously, we have a great opportunity with new digital tools to enhance productivity.
Celonis can play a vital role in this scenario by providing transparency into the inner workings of an organization. It can help customers drive process improvement, sustainability, and productivity at scale. So, if you can forgive the sales pitch; I genuinely believe in this approach. It is a completely new and disruptive way of analyzing and improving how organizations truly operate.
In your opinion, what does the future of the People function look like in 2025 and beyond?
In my opinion, taking a long-term view is imperative. It is crucial, especially in a pioneering market environment where establishing a new technological layer entails rapid growth. Understanding future trends is essential. On the human side, our approach involved collaborating with academics like Professor Peter Turchin, to base our projections on data rather than assumptions. This enabled us to outline our vision for the next decade. Living in a highly dynamic and crisis-laden environment, we identified critical future human needs.
Regarding the broader aspect of the people function, two key elements stand out. Firstly, organizations must thoroughly comprehend the demands of their talent. Similar to how a sales or marketing team understands its customers, clarity about the organization's mission and a deep understanding of employee needs are vital. For instance, foreseeing the growing social divide, we realized the importance of education for future success. We thus introduced an equity program for the newborns of our employees to support their education, emphasizing our commitment to contributing to the next generation's long-term success.
Secondly, a strong emphasis on transformation is essential. Rapidly adapting to diverse changes such as pandemics, supply chain crises, inflation, and talent shortages necessitates a clear transformation agenda. Focusing on leadership development, organizational health, change management, and evolving skill requirements is crucial for every leader in the people function.
Moreover, it is noteworthy that around 80% of our workforce consists of Gen Y and Gen Z individuals. This generational profile is rather unique and in many ways, it positions us at the forefront of demographic change. Sometimes I see things coming where I tell colleagues “you are going to run into this aspect 10 years from now, perhaps you really should focus on understanding new generations and what their needs are, because it is coming faster than you think!”.
“you are going to run into this aspect 10 years from now, perhaps you really should focus on understanding new generations and what their needs are, because it is coming faster than you think!”
Out of curiosity, as an organisation how do you better understand those needs? Is it just colloquially by the coffee machine or do you proactively seek opinions on things?
Ultimately, it boils down to a listening strategy. When I initially joined Celonis, I conducted around 70 interviews throughout the organization to truly gauge how people perceive the company and what they genuinely require. As we began framing our value proposition as an employer, we engaged in extensive listening sessions, conducted focus groups, and carried out numerous interviews. We delved deeply into our engagement survey results to gain a thorough understanding. I capitalize on every opportunity to foster communication. Just a couple of weeks ago, during my visit to the US to inaugurate a new site, I sat down with a group of colleagues over a beer and asked, "Are we effectively communicating with you? How do you prefer to receive information?" and we ended up delving into the earlier mentioned topic of fake news for example. What holds significance is transparency. It is essential not to convey one thing and then have layers of fine print altering the message.
“When I initially joined Celonis, I conducted around 70 interviews throughout the organization to truly gauge how people perceive the company and what they genuinely require”
You alluded to the tumultuous time that it has been with supply chains affected by the pandemic, interest rates, the talent shortage, and the list goes on. How has the shift in focus from high growth at almost any cost to one of profitability impacted your people strategy?
Well, we are fortunate that we have been able to maintain our growth trajectory and keep hiring. However, two significant aspects come to mind that I find particularly crucial. Firstly, a key lesson for me was the necessity of involving middle management when transitioning from a pure growth focus to an emphasis on profitable growth. When a company needs to make tough decisions, it is vital to engage the middle management tier, providing them with the economic context, explaining what is currently relevant, and establishing integrated communication between the executives and the middle management. This ensures everyone comprehends and communicates the reasons behind certain changes. We address this through what we term as "Celonis’ Leadership Forum," where we gather 200 leaders and top talents to tackle these issues.
Secondly, it is imperative to foresee the trajectory of your growth and ensure it is progressing in the right direction. Growth is not always linear; it tends to be uneven across various sectors of a company, akin to the unpredictability experienced with children as they grow – one day the shoes are too tight and you get that sorted and then next, the trousers are too short. Hence, you must proactively strategize how to grow your company into the correct shape. On the people side, to facilitate this, we have introduced regular "Organizational Health" meetings with each executive. These meetings furnish them with a wealth of data on their organization, including engagement survey results, specific work design KPIs like manager-to-employee ratios, compensation data encompassing salary range penetrations, and an assessment of how many individuals fall within, above, or below the designated salary ranges. This transparent and comprehensive information allows executives to gauge their organization's standing and identify areas for potential optimization.
“When a company needs to make tough decisions, it is vital to engage the middle management tier, providing them with the economic context, explaining what is currently relevant”
What type of culture and leadership is required to successfully manage this current topsy-turvy macroeconomic climate?
As I mentioned earlier, our company continues to grow. It is crucial, as I pointed out before, to be extremely transparent about how we grow. Overcommunicating our strategy, outlining where we aim to steer the company in this environment, is incredibly important. Especially considering the demographics within our organization, as many employees have never witnessed an economic downturn before. Providing them with this context is pivotal.
Moreover, we are fortunate that our solution aids customers in this market environment where productivity and cash flow are key. Reinforcing that we are a part of the solution is exceptionally critical. Lastly, regarding leadership, humility plays a significant role in our role as pioneers. In this market setting, it is essential to acknowledge that we will not always get it right. While people seek stability, clarity, and reliability, it is normal to course correct. Emphasizing that our decisions are made with the best intentions based on our understanding of market dynamics is crucial. Adapting strategies if the market shifts is vital. It would be a grave mistake to assert, "I know it all, and this is the direction we will succeed in no matter what." That is a promise we cannot fulfill.
“In this market setting, it is essential to acknowledge that we will not always get it right”
How have you approached improving Diversity and Inclusion within your business, how do you measure it, and what does success look like?
Yes, Diversity and Inclusion (D&I) is extremely important for our company. It is critical not only for the executive team, Celonis owners, and managers but also for our recruiting team, my own team. This topic covers various aspects. It begins with ensuring we maintain diverse representation in our hiring process, but it also delves into the significance of cultural fit. We have shifted our focus from hiring at any cost to meticulously examining cultural compatibility and skill levels.
Our approach involves collaborating with partners and networks that connect us with diverse groups, such as women in tech networks or alliances like Handshake. These networks serve as valuable partners in our pursuit. Moreover, within our industry, we have established a Women in Process Mining network. This network represents not just female colleagues within our team but spans across multiple companies, encompassing women active in our field. Recently, we conducted a session with this network during our annual user conference ‘Celosphere’.
Considering our rapid growth, we have many new managers in their roles. Hence, we prioritize leadership training around fostering an inclusive environment. A noteworthy point in this regard is our inclusion in an assessment of companies and VCs, examining the likelihood of a woman's career progression within an organization. We stand above average, even alongside prominent brands in the tech industry. This represents a fraction of our efforts in this domain, which is truly promising and something that we are proud of.
What about striking the right balance in the post COVID world as it relates to hybrid working and being in the office? Obviously, this has its impact on fostering culture, teamwork, onboarding, learning and development etc. What do you think works and how do you strike the right balance?
This certainly is a hot topic at the moment as when I engage with peers, I notice that most companies are emphasizing this aspect. From our perspective in HR, especially in the current environment, focusing on the cultural experience holds immense importance. This became particularly crucial during the COVID period when our growth accelerated rapidly. Consequently, there was a sudden influx of individuals who had not truly experienced the essence of the company.
My view on this matter is that some companies approach it purely from a control standpoint. They aim to have their employees back in the office merely to monitor their work. However, our stance differs significantly. We believe it is essential for people to return to the office not for surveillance purposes but to create an environment where they can engage with one another, build relationships, innovate, and collaborate. Our aim is to foster an atmosphere where people can spend quality time together, fostering innovation, collaboration, and personal connections. Recently, I had a conversation with a neuroscientist on whether there is scientific evidence supporting the idea that in-person meetings are more beneficial than remote work. She affirmed that there is indeed proof supporting this notion, citing the importance of personal interaction for brain chemistry. She even said that it is actually healthier if we got together in the office to smoke and drink than be alone at home and eat a salad! This is of course an extreme and facetious statement but there is no scientific doubt that people need human interaction. So that is why we believe in this. Of course, it is a journey as we had lockdowns and people got used to working remote and adjusted their lifestyles around that. Similarly, if we now say “come back on average three days a week to the office”, people need some time to adjust the habits they built around childcare, pets and all these things that you could weave in, so it is definitely not a simple thing to change but one we are passionate about.
How do you keep up to date on all the latest people HR practices, tools, tech channels?
I genuinely really enjoy peer networks. I find some of the platforms provided by your group truly beneficial and there are excellent offerings available on the “S” side as well. There are also platforms and networks we tap into within the tech industry. It is quite an open environment, allowing us to openly discuss our challenges, receive comments, and engage in calls to share insights. We discuss various topics such as the tools we use, strategies for geographical expansion, and what is currently effective or ineffective. Additionally, I invest time in reading numerous publications to stay updated on the latest industry developments such as The Information.
“We discuss various topics such as the tools we use, strategies for geographical expansion, and what is currently effective or ineffective”
And in your opinion, what KPIs matter the most to the people and HR function?
Well, there are those classic KPIs that I still believe hold significance. In our context, it often involves measuring how quickly we fill roles, employee engagement scores, turnover rates, and the organizational health KPIs I previously mentioned—such as gender representation, pay range, geographic distribution, and so forth. Presently, we are exploring predictive analytics more deeply. This entails forecasting turnover risks within specific segments of our talent pool, among other things. For instance, identifying successful sectors within a particular job category to understand the defining features of successful sales account executives versus less successful ones. The aim is to isolate these factors to replicate success in our hiring practices.
Finally, do you have any suggestions of great books, podcasts, articles etc. that you consume generally, or anything that has really influenced your leadership style?
I would recommend a book that focuses on culture and work design. Though not recent, it profoundly altered my perception of organizations and organizational development. It is called "Reinventing Organizations" by Frederic Laloux. This book provided me with a deep understanding of an organization's cultural stage and how it evolves from there. Another author whose work I continue to appreciate over time is Marshall Goldsmith. Although he has been around for quite a while, I still find value in his insights. His recent publication from last year, "The Earned Life," emphasizes essential aspects of humility, leadership, and staying grounded. These are two books that resonate with me.
