insights! #110: No future without data – Kristin Lichtblau on Germany's Mittelstand in transition

Joubin Rahimi

Great to have you back for a new episode of insights! Today with Kristin Lichtblau. Hi Kristin.

Kristin Lichtblau

Hello Sabine

Joubin Rahimi

And your superpower is what?

Kristin Lichtblau

My superpower is, as many people tell me, my clarity, which I always express very plainly, and at the same time my humor and my joy in many things.

Joubin Rahimi

But tell me, why is clarity the superpower? Where do you need that?

Kristin Lichtblau

People often beat around the bush, and when people don't know what you want and it isn't phrased clearly enough for them to walk out of the room and get started, then a lot of time and resources are wasted. And that helps especially in my job and in many other companies.

Joubin Rahimi

In your job. You work in business development – sum that up in two or three sentences.

Kristin Lichtblau

Yes. So I'm responsible for business development at the Swash Group for Megabad and two other brands. And, well, it's structured like this. We have a great many projects because we're in upheaval and are, so to speak, overhauling a lot of things in this mid-sized company that was acquired before 2021. And those projects pile up. So it's really more program management when you have 40 projects running at the same time. At the same time it's a change process taking place in the company. That's why development, corporate development. Lots of strategy that we develop and question – we can talk about that in more detail later. And this transformation that is taking place through acquisitions. So the whole M&A business, leveraging synergies within the group, is tucked under the umbrella of business development in my area.

Joubin Rahimi

And that's an exciting task, because you have the different brands from a mid-sized company. You have to change the culture, or you're forced to. The investor has expectations too. It shouldn't just carry on as before, but rather.

Kristin Lichtblau

Growth is what's called for.

Joubin Rahimi

What is the number one priority? When you're in a situation like that.

Kristin Lichtblau

That you bring everyone along in order to reach this growth target, and you only manage that through the manpower that sticks together in this change and in this process, so to speak. Because if you lose them, you lose sight of the strategy, of the big goal. And that's it. You have to bring everyone along.

Joubin Rahimi

Bring everyone along. That's a big, big phrase too. Bring them along to where? So from where to where? With what – the strategy, you said, that's one thing.

Kristin Lichtblau

That's where it starts: presenting the vision or the mission, the purpose of the company, what you intend to do, in a way employees can understand. A certain mission statement and value principles are important for the individual person, so they can identify with them, and then putting that into a strategy with the how. How do we achieve it? And what focus do we set? So what exactly do we want? Which levers, which enablers do we have, which drivers do we have to implement it – and then you simply screen the company. What do we have? Which resources, which skills? What are our systems like, what structure? What is management like, what is leadership like? To then examine and identify what you focus on, and to prepare it so that the individual person understands it – that is the biggest challenge right now.

Joubin Rahimi

Lots of good things said. I have a question about the very beginning.

Kristin Lichtblau

Then let's go back for a moment.

Joubin Rahimi

We're in Hamburg. Yes, and a formerly very well-known politician said that anyone who has visions should see a doctor. There are companies that say: it's always worked this way. Why are you coming to me with this now? Have you already given part of the answer, or all of it? Are you saying the answer is there because you need it to explain where things should go, or where are the visions still visible?

Kristin Lichtblau

Well, the vision has to become visible, because if you want to change, then it's a change process and it has to be described. Because change only happens if you repeat it again and again and remind yourself what the change is. And that's what's contained in a vision.

Joubin Rahimi

Okay. Remind yourself what the vision is. And that's probably the challenge. You can't just say it once and stick up a poster. We worked out a vision, it's right there.

Kristin Lichtblau

You do have to live it in daily life and also be a role model. I think that's always a big aspect too, because if managers don't stand behind this vision and don't pass it on to the teams and aren't role models in implementing it day to day, then you can't demand it from the employees.

Joubin Rahimi

And how do you deal with it when the vision – you can't. From my experience, correct me if I'm wrong. We also worked out this strategy, goals, vision, values as a team. We were still very, very small back then. Yes, that was okay. But I wouldn't do it again. It isn't the employees' job to say where things are heading – that's the managing director's or the entrepreneur's. Bringing people along, yes. So listening too. But where our market is heading, how we position ourselves, I'd always say that's a different circle, and there you don't bring everyone along. And then you have a manager who says: nice, what you're doing there. What do you do then?

Kristin Lichtblau

On the one hand, saying you don't bring them along. So you take parts of it. If you're a good entrepreneur and a good leader, you already know who the tricky characters are that you'd best involve. So that's partner management inside the company. Yes, and somehow also a sales topic inside the company, in order to crack exactly these hard nuts. And you manage that either by actively involving them after all and shaping the idea together with them. Or through topics you give them where they notice that their work gets better. So those would be the two levers I'd try in order to bring the hard nuts along.

Joubin Rahimi

And not weed them out.

Kristin Lichtblau

No.

Kristin Lichtblau

Not at first, because that then also leads to the mood – well, first of all everyone notices it, and then we're quickly at the culture topic, and especially in transformations like the ones we're carrying out, you do have to watch out for what affects the mood.

Joubin Rahimi

So the easiest way, saying we part ways with them, isn't the right one.

Kristin Lichtblau

Not always.

Joubin Rahimi

Mhm.

Kristin Lichtblau

Yes.

Joubin Rahimi

I'm asking about that because these are always the questions people have. Yes, yes, digitalization is actually always a change process too, the way I see it. Now AI is added on top, and then it will go much faster. Yes, can you actually bring people along at the speed you need? Or?

Kristin Lichtblau

It also varies a lot, I'd say, from area to area. In a marketing team like ours, in our digital team, they're all so well up to speed that they explain the world to me rather than the other way around. But there are also areas like logistics or HR, where many people have simply been doing their job the same way for years and don't engage with it. And of course you have to be open to taking on the topic, because training costs enough money and also a lot of capacity and time. If a person doesn't want to, then that's misinvested time. But if you have people who get excited about it and then bring that spirit along and bring it into the team and say okay, my work gets easier this way, I'm a role model, a guiding function – then I do believe you can achieve it again and again.

Joubin Rahimi

The role-model role – I've actually heard that twice already today, now for the third time. Yes, that leaders have to be role models. There seems to be something to it. Purely empirically, yes. How easy or how hard is it when you have leaders who take on this role-model function? To some extent you have to – if you now say okay, we're an open-minded community now, because we're switching to working for one another. However that goes, people have been running in a different direction for ten, fifteen years. What's your experience? How easy or hard is this change when it comes to bringing the leaders along too? Because if they don't join in, the rest doesn't work. That's a cascade, I'd say, or translate it that way.

Kristin Lichtblau

Well, every person is different, as we say in Cologne, but with every person there is something you can get them excited about – I'm convinced of that. And you have to sense that and find it out. And then to satisfy this strength or this desire – that's good leadership work. Depending on the hierarchy, the next boss up has to recognize it. And then try to coax it out.

Joubin Rahimi

How well positioned are we in the German Mittelstand there? I do have my doubts.

Kristin Lichtblau

We still have potential. Is that politically correct?

Joubin Rahimi

You're allowed to answer incorrectly too. That's much nicer, by the way.

Kristin Lichtblau

Yes, there's also a saying: the fish stinks from the head, starts stinking from the head. And yes, there's certainly a lot of potential there. And then you do have to look closely. That's simply how it is, it's part of good management. Because making decisions like that too – when you extend a hand and support and try to lead accordingly, to work together toward the same goal and also convey the same values, and values are always a huge point in this – and that doesn't work over a certain period of time, then at some point you have to part ways. That's just how it is.

Joubin Rahimi

Then find the clear words.

Kristin Lichtblau

Yes, exactly. Find the clear words.

Joubin Rahimi

When I say okay, I'm an entrepreneur, I notice something is changing there – what are the three points where you'd say: dear entrepreneur, this is what you should do to move forward?

Kristin Lichtblau

Joubin Rahimi

Yes. So the question is completely generic. You can put anything into it. You have a plan. Yes. That doesn't surprise me at all. So, Kristin, we have a Behind Closed Doors. We never really made a big deal of it. And the exciting thing is, you're among the best prepared. She always has a plan about who she wants to talk to and about what. That's great. I think you get the most out of the events.

Kristin Lichtblau

Yes, that's true. Yes, that's how I am.

Joubin Rahimi

I threw you off.

Kristin Lichtblau

That's the plan. What was the question again?

Joubin Rahimi

What are the three things you'd share with an entrepreneur?

Kristin Lichtblau

Well, data. So the most important thing is data.

Joubin Rahimi

I'm hearing that again. Today.

Kristin Lichtblau

Because that's the basic prerequisite for becoming successful. And in what is currently changing, especially through AI. If we – as a mid-sized company – if you don't have your own data under control and well placed and in systems so that you can feed it in, you've lost, because what is an AI supposed to access if you can't feed it? Yes.

Joubin Rahimi

I understand.

Kristin Lichtblau

Yes.

Joubin Rahimi

Which data else do you mean? Data covers a great, great deal.

Kristin Lichtblau

Content, product data, product data in particular.

Joubin Rahimi

I was somehow thinking about projects.

Kristin Lichtblau

Well, I was really thinking about product data, because that's the prerequisite for doing good projects too. Starting with the PIM system. If you want to grow and present your product data on marketplaces, then you have to have a good structure there and also how they are described, which content with which words, so that you can respond in Google, SEA and so on. So that's the basic prerequisite. Many still have homework to do there.

Joubin Rahimi

I completely agree. And earlier we had Fabian Haustein on the podcast, and he also said data and curating it is a huge thing in the high-end fashion segment. Now you – I'm a customer of yours too, I built a house. Yes, I think everyone is a user on your platform, because you have so much detailed data. But what I haven't seen, maybe you'll get there – maybe it isn't necessary either – is that curation. So I have the washbasin fitting. What do I need for the concealed installation? That's maybe still easy, but what else do I need? Or what else goes with it? And specifically not the same series from AXA, but.

Kristin Lichtblau

The spare parts you need for it, or the vanity unit and so on. Well, first of all you have to think about it. Or we do, too. We do it again and again. Which customer is the one making the query at that moment or looking for the product – classifying the customer properly. And there we are back at data. Customer data that you hopefully have or enrich in order to then serve the customer what they're looking for. The other thing is having the data in such a way that you have leader-follower products. So we also have private labels, so that our private labels then follow the product at that moment or can stand in comparison, where the customer may get a more attractive price but simply doesn't have the brand behind it or doesn't know it as well. And of course the whole spare parts business, so everything you need to use this product at all, which is then in turn necessary for installation, for the tradesperson and so on, and where our customers – that's our USP as an e-commerce player in this industry, that we offer the customer everything comprehensively and they understand it and can put it in their basket without needing advice from the installer.

Kristin Lichtblau

And that only works with a perfect description of dimensions and technical details. So the content has to be right from start to finish.

Joubin Rahimi

That's why I kept ending up with you privately too, even before you were there. So this isn't advertising. I bought there. For us it's relatively easy to say okay, data, and then you can picture it. An entrepreneur who has perhaps decided a lot about purchasing from the gut. Yes, they have the challenge. They're now heading toward a new world. What do they need for it? PIM, you said, but what do you need in the organization? So that you can collect data, as you said, evaluate it and improve it.

Kristin Lichtblau

Yes, so a good cloud, a good system, a DAM, a PIM, a pricing tool. Those are the tools you need in order to present the product to the customer in this comprehensive way.

Joubin Rahimi

And organizationally and in terms of people?

Kristin Lichtblau

The expertise not to translate by retyping lists, but – and there we're back at the AI idea – to engage with it. How can I set up a process chain so this product is presented, automated, so that the product gets into our shop?

Joubin Rahimi

How big are the teams? So how much do I have to invest? You just named all the technology. How many people would a typical mid-sized company with 100 million euros in revenue need?

Kristin Lichtblau

As things stand today, if I say AI doesn't replace all that much yet, I would say that a content and product data team like that is easily ten, 15 or 20 people you pay to do it properly.

Joubin Rahimi

Yes, I think that's important too, so that this data – I'll do it on the side. I once had someone. No, that doesn't work, does it?

Kristin Lichtblau

And above all especially when you get to private labels, where you then need a team that also creates the photo, so to speak. So if we think in 3D data, in order to have a 3D-animated planning tool on the website, then you first have to have the product data for it plus the images of the product you want to display. And of course the manufacturers aren't yet at the point of providing this data for all their ranges and products. And of course we also have to create these photos or these pictures ourselves first.

Joubin Rahimi

And that's typical for all industries. So now it's bathrooms, but also electrical and whatever they're all called. Proper data is really missing everywhere. Yes. Has data quality – well, let me speculate. Data quality is getting better. I know manufacturers are working on it. Yes, if it's really good now, can you then just take it, or do you say I can't take it because then I no longer have a USP, or I have to take it and look for a new USP? Are you already at that point, or would you say it's still a few years before it even gets that far?

Kristin Lichtblau

Yes, you do keep discovering mistakes, so where you can clearly see, okay, that was created with AI, where the tap simply sits a bit crooked or the shower fitting isn't centered on the wall. You still need the expertise of people who have been doing it for years. They see it at a glance and can then also use the tools properly. I think the quality standard people have for an image these days will also drop, because we'll be dealing with this quality more and more. And then the standard goes down too, because everyone does it that way. That's my assessment.

Joubin Rahimi

Would you then have a USP again if you do it better, or not really?

Kristin Lichtblau

Because then we're back at the customer perspective. I always think it's good to put yourself in the customer's shoes. So always think from the customer's point of view. And I think the customer has also arrived in this world to the point where they no longer have that standard. That's my impression.

Joubin Rahimi

There's a robot running behind us on the left right now. They're standing still at the moment – that's the clattering. And once we have the assistants, an image like that probably won't matter to them at all. It recognizes that the color blue matches the specifications. Yes.

Kristin Lichtblau

Then it's probably more about the content. Which then also influences the decision. And then the one mistake maybe isn't so interesting.

Joubin Rahimi

Like looking into a crystal ball. I've been asking this question a lot lately, and I've never yet had anyone with a plan for it. So all answers are completely fine. The point is: you use ChatGPT too. More and more people use it, and the way we search is changing. Because we no longer search at all, but rather write in concepts. So if someone says I want a new shop platform, then you probably no longer google e-commerce or a list of web shop vendors, but you write: I want my shop – and then you don't just get a selection, but also the first steps. Maybe service providers too, maybe concepts you have to work out beforehand. You can do a lot yourself. Yes, how in this world – and this is transferable to product ranges too – how do we have to set ourselves up in this world so that we continue to be found, so that we can win new customers, because the old way isn't it. How do we get into the new way?

Joubin Rahimi

There we're really looking four or five years ahead, I think.

Kristin Lichtblau

Well, since ChatGPT and Gemini and all of them will more or less replace Google, this Google search, I believe the same process will be required: that you present yourself on the web with the keywords so that you show up, and that will be the challenge, feeding the system that way. And there we're back at the point of how much you as an entrepreneur want to reveal about yourself and how far along you already are on this path. It will probably pay off for those who are already taking that path, and those who want to protect their data and themselves for a long time because they're worried about coming to harm in this new world – they probably won't survive.

Joubin Rahimi

 For you. I don't even know whether I'm the typical customer. What can you tell me? We had a general contractor who installed the things. But he isn't an architect. We said okay, this and that, here you go. And then he pushed it together a bit in his program. But in the end we either sourced the products ourselves, when they couldn't get them through their suppliers. From you, that is. Or he sourced them. Someone installed them. I don't know whether that's the typical case. Or rather, is it more common for you that people install it themselves, because the tradesperson – we were incredibly lucky, because he did all the trades. He was always there. Yes, but many people always say I can't find a decent tradesperson, so I'll do it myself.

Kristin Lichtblau

Yes, because we're always dealing with water and also electrics, many people have respect for it and don't go down that route and instead spend longer looking for that tradesperson, who then – it has to do with quality and warranty, that they don't want to take that on. And yes, it's slowly shifting, so that tradespeople are open to it too and take it on.

Joubin Rahimi

But doing it yourself is out of the question. I just had the idea.

Kristin Lichtblau

With various things that will be the case and is the case. But when it comes to the big things, like installing a toilet, then some people don't dare.

Joubin Rahimi

A shower or something.

Kristin Lichtblau

Yes, it is.

Joubin Rahimi

Because you're always wet.

Kristin Lichtblau

Yes, and dimensions are important there too, and then it happens quickly that you end up with water sitting in the walls – you don't want that.

Joubin Rahimi

You don't want that. As we can see, we have a lot of details that are hugely important for driving this forward. Data becomes important there again too. So for you data also means content data, right?

Kristin Lichtblau

Definitely, yes.

Joubin Rahimi

And creating it yourself. I'll do a wrap – creating it yourself is also the case, or bought in.

Kristin Lichtblau

Both, exactly. Fifty-fifty. The way I see it, we do have to present our products. They're fed with data. And likewise the manufacturers have an interest in presenting their products well.

Joubin Rahimi

The generation of data through AI. That was the last loop, then. That's where you say quality is declining. So did I understand you correctly that quality is declining and we're fine with it, or did I interpret that wrongly?

Kristin Lichtblau

Yes, I was primarily talking about image creation, that quality is declining there. In terms of substance, so in content, in text descriptions or product descriptions, it mustn't decline – there it will become even more explicit, and you'll draw on what other building blocks there are and take the input from the manufacturers and so on, and then you'll find some middle ground, I'd guess. Yes.

Joubin Rahimi

What would you say as a closing thought? I'm handing you the closing word, so to speak – we like to pass on three tips. To your peers, from your experience.

Kristin Lichtblau

Well, bringing people along is always. That's a topic close to my heart, that in my communication I always try to speak so clearly that you have followers. So not just followers on LinkedIn or somewhere else, but followers within the company. Exactly – bringing your peer group along and at the same time doing the homework with a sense of sustainability and not forgetting to follow through on it. That's how it is, because it's so much part of my.

Joubin Rahimi

What exactly do you mean by that?

Kristin Lichtblau

Yes, not micromanagement, but leading people in their daily work in such a way that they enjoy closing out topics and celebrating successes and being satisfied. We've now finished another project. Okay, now let's take on the next one – and not overwhelming them with it.

Joubin Rahimi

Great, a nice closing word: finish things and celebrate. Yes, I think that often falls short with us Germans in particular. I was just talking with a Brazilian and he said no, we celebrate more than you do. We do things and celebrate, celebrate the successes.

Kristin Lichtblau

We Germans do that too little. That's true.

Joubin Rahimi

A call to action: let's celebrate. We'll definitely have many more exciting conversations. Have a nice evening.

Kristin Lichtblau

Thank you.

Joubin Rahimi

Thank you for your time. Dear Kristin.

Kristin Lichtblau

Thank you very much for having me.

Joubin Rahimi

My pleasure. And if you have questions, feel free! Write to Kristin Lichtblau or straight into the comments below. We love to discuss.

Kristin Lichtblau

Thank you very much.