“Always stay grounded” – Part 3


Interview with Volker Kronseder
Sequel of Parts 1 and 2 of the conversation.

What do you find particularly exciting about the technical advances in this sector?

 That there’s an endless stream of new ideas – not only from us, but also from other component manufacturers. Take the subject of digitisation and the automation it makes possible. They make life easier for beverage producers, improve the dependability of their production operations, and ensure better quality. These are innovations that are incorporated in machinery design. And they make the whole thing more interesting. I always say: the better is the enemy of the good. And “better” means higher-quality, more resource-economical, more cost-efficient. But one thing we have to be clear about: getting the better at any price is not going to happen.

Which technical innovations were you personally most enthusiastic about?

In the field of mechanical engineering, laser-cutting technology has radically altered the methods involved. Customised-machinery manufacturers like Krones can operate cost-efficiently with these machines from batch sizes of one. Previously, you had to produce everything with moulds, so a certain minimum batch size was essential. And, of course, digitisation, automatic control of the machines and the precision they can be used to achieve, all lead to more affordable production operations. And also to more ergonomically optimised workplaces, I believe, in that staff nowadays exercise more of a supervisory function than performing manual tasks requiring physical strength.

Krones itself, of course, possesses a multitude of innovations. The company owns more than 3,700 patents, all of them manifestations of a creative idea. I am thinking specifically of labelling technology in this context. Think back to the times when we only had glass bottles and paper labels, before my father caused a stir with his inventions. The most sensitive bottles in a line, wet bottles, wet glue, different outside temperatures, the labels rolling up – bottling was quite a risky undertaking. And thanks to a multiplicity of advances, this has changed very substantially – the labeller has become the most dependable machine in the bottling line. That was the foundation stone. After that, people were confident that we could be relied upon to build other machines as well, in line with the motto: “Krones has done a good job with the labeller, so they can surely be trusted with a mere filler.” Technical innovation continues to be a vital factor in our corporate success.

What effects can technical innovations have, in macro-economic terms, through lower energy and water consumption levels, for example? What perceived importance does sustainability-driven thinking in research and development have on the world’s ecological needs?

Raising public awareness of the sustainability issue, not least the costs involved and accepting that we have to manage the planet’s resources with all due prudence – all this meant that we took sustainability on board at a very early stage. The development of our enviro concept alone, behind which there is an entire management system and with which we are playing a front-runner role in the sector, shows that we are taking these issues very seriously. This means that we ourselves, and the beverage industry as a whole, can make a contribution towards meeting and mastering this major challenge of resource-economy.

How has the sector in your view changed over the past two decades?

 When the pendulum swings too far in one direction, it doesn’t come to a halt, but starts to swing back. In the brewing industry, for example, we’re now seeing it start to move back.

You have to differentiate between the various regions involved, of course. In Africa, Asia and South America, for example, people are becoming more affluent overall, and better able to afford luxury goods like beer. This leads to new breweries being built, these are the growth drivers. When you look at the USA and Europe, you can see a different trend: this young, up-and-coming craft brewer scene, which constitutes a counterpoint to the fading wave of concentration. These small, brash brewers come along and are audaciously undeterred. They find investors and consumers who are enthused, and so once again we see a multitude of start-ups. Not everyone, of course, is a new client for us straight away, but we have also expanded our portfolio responsively, and are now offering machines for the lower output range as well. Every trend generates a counter-trend, so to speak, which keeps the whole thing exciting.

Has ongoing internationalisation meant that personal relationships have also changed?

I think so. An automaker doesn’t know every one of “his” car-owners. But because we operate in the business-to-business environment, basically we do know each of our clients, “each” machinery owner – and everybody knows us. I myself know a lot of people, but if I were to know everyone, this would, of course, mean a pretty restricted volume of business. That’s why it’s important for our sales people to foster close personal relationships. My impression is that we’re perceived as likeable, competent and dependable. With many clients, in fact, we’ve built up some close friendships.

You know an especially large number of clients in China; this is your hobbyhorse, so to speak.

Yes, I love China, and I love the Chinese. I like the way they deal with each other; their ancient culture, shaped by Confucius and Laozi, is still perceptible today. I am deeply impressed by the people’s wonderful sense of humour and discipline. The Chinese have in the past 30 years accomplished a gigantic quantum leap in their country’s prosperity, something that’s unique in human history. I’m always fascinated by people who make a success of things.

The “crisis” China is currently undergoing – is it really a crisis?

To be honest, I don’t think it’s a crisis. It was obvious that China couldn’t keep on growing at these exorbitant rates. China has hauled 600 million people out of poverty, who can now become market players as consumers. That, too, is why the sales figures in China are rising. Putting the same growth again on top of that, that’s a sheer impossibility, that would signify an exponential function. It was always foreseeable that this growth would slow down, and that it would move up and down in a sort of wave pattern. I see that the Chinese are making a timely and correct response, which is why I believe that it’s not a genuine crisis. It’s important that the Chinese market can continue to grow sensibly, then China and the whole world will benefit.

Let’s finish with a brief look into the future. Christoph Klenk, your successor as Executive Board Chairman, is a typical Krones “home-grown talent”. Was that a precondition for this very important post?

 I think so. It was one of my early goals, to put in place an organisation, a team where basically everyone can replace anyone else. You have to have a management organisation that’s able to continually renew itself, you can’t allow it to depend on a single person. I believe a company will only achieve long-term, sustainable success if it succeeds in replacing sits management team not all at once, but at intervals. After all, it’s only me who’s stepping down, not all my colleagues on the board. In the shape of Christoph Klenk, we have someone who’s known the company for over 20 years, and has impressively demonstrated his abilities in a variety of different functions.

Christoph Klenk is, of course, thoroughly familiar with the firm’s philosophy, parts of which he himself has helped to shape. May everyone involved, the staff and the clients, as well as the shareholders, continue to put their trust in a soundly based but also highly innovative Krones corporate policy? What is Krones going to look like without Volker Kronseder as Chairman of its Executive Board?

I’m just going to say: the success story will continue.

What will you mainly be doing after stepping down as Chairman of the Executive Board?

I shall be coming here quite often, because the technology still interests me a lot, of course. But I won’t be interfering in the operative side of things any more and so I’ll be able to look at the whole thing from quite a different viewpoint. What’s more, I no longer have this daily pressure of deadlines. This I’m looking forward to very much, as you can probably well imagine.

I can also shed part of the responsibilities of the Executive Board Chairman. But I’d still like to have some sort of responsibility inside the firm, but then as a member of the Supervisory Board. That’s a different role, one that I’ll first have to familiarise myself with, because, of course, I’m resolved to do my best in this remit as well.

And privately?

Lots of people, after a watershed moment like this, book a trip round the world. I’ll be quite happy never to see the inside of an aircraft again. All my working life, I’ve been shuttling to and fro all over the planet, and to be honest that’s why I won’t be going on any round-the-world trips. The only thing I’d really like to do is travel to China on my motorbike again, simply because I just love motorcycling. As far as I’m concerned, the journey is the destination.

Mr Kronseder, we wish you a really enjoyable time.