Johan Salenstedt of Configit On How To Use Digital Transformation To Take Your Company To The Next Level
An Interview With Tyler Gallagher
Cross-functional Collaboration- this is a critical core competency for today’s digital organizations, especially in manufacturing. Ensuring that the end-to-end product design, manufacturing, sales, delivery and service processes — or product lifecycle — can be continuously improved and adapted to meet new customer demands and competitive challenges is of utter importance. This requires cross-functional collaboration on a scale unseen to date, and that can’t be achieved without digital transformation.
As part of our series about “How To Use Digital Transformation To Take Your Company To The Next Level”, I had the pleasure of interviewing Johan Salenstedt.
Johan Salenstedt, CEO of Configit, has over 30 years of experience in executive leadership positions in high growth software companies such as IBM, Adobe and Qlik.
Thank you so much for joining us in this interview series. Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
When I went to university, I wasn’t sure what I wanted to do. I was choosing between all kinds of things, like becoming a journalist, which was something I was interested in at the time. But when I started to read about IT and computer science, I realized I knew very little of it and that seemed like a great challenge to me. Not a lot of people knew about the field back then. It was something new and fascinating. I realized that if I actually went and learned something about it, it would potentially open some doors and for sure it was something that was going to grow in the future and give me access to senior people, even if I didn’t have a lot of experience. I would know something that was interesting, something that would become important.
Today, I’m not particularly fascinated by technology itself, but I’ve always been fascinated by what you could actually do with it. I started off as a programmer and I was later drawn into project management. From there, I went into sales and marketing for the remainder of my career. So for me, it’s always been about understanding what technology can change, and who can interact with it, that lights a fire for me.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I make mistakes every day. And I think we all do; the goal is to not repeat them. I still remember one of my first jobs when I was given a tour of the new office by my manager, and it was so fascinating because they had this big data center where everyone wore a white coat and had white caps. It was as if I was walking into space. Today, it’s so much different, and it makes me think back on how there was something so mystical about IT. To me, it’s funny to witness the development of what IT was then and what it is now. I find it fascinating.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I think I learned from everyone that I’ve interacted with throughout my career, especially the leaders in companies I worked for. I can give two examples. I loved the way that the CEO at Adobe dealt with innovation, which I thought was fantastic. He put an emphasis on company culture and company value, and basically said that “innovation comes from everywhere within the company.” We really saw the value of that. Everyone had the right to raise their hand and say, I think we can do better, regardless of your rank, role, nationality or gender. Everyone had the same voice. I also learned a lot from the CEO at Qlik, Lars Bjork. He was very much into company values and how that drove the company in the right direction and guided every employee. I thought that was fantastic.
But I have to say, I’ve learned quite a lot from some of the customers I’ve spoken to during the pandemic and the immense challenges they’ve had on a personal level — dealing with things that you take for granted. But also, learning how fast you can change a company to survive. How can you adapt a big corporation? And what kind of sacrifices do you do you need to make to survive, live it out and prepare for the return? I’m grateful for many people, both customers, as well as some of the managers that I had the opportunity to work for.
Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
While I’m not the type of person that reads a lot of management books, I do like to focus on the key drivers that help me understand what motivates people. What is the motivation behind people moving up and performing tremendously? What is the motivation behind why people change, adapt or improve? It’s something we, at Configit, have been working to apply amongst the leadership team.
Lately I have taken impressions from Jeroen De Flander. He used to be a management consultant, with super advanced strategy sessions and plans. At one point, he said to himself, “I think I can do better by simplifying this process.” We agreed and we’re actually adapting to his simplification on how to, one, develop a plan, two, communicate, and three, execute. That’s something that really appeals to me — when people don’t over-complicate things. That’s tough to do, but if you can do that, it can really make a difference.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
In June of 1996, an unmanned rocket launched by the European Space Agency exploded just forty seconds after lift-off. This rocket, named Ariane 5, was on its first voyage after a decade of development costing $7 billion.
An investigation into the cause of the explosion found it was caused by a software error in the inertial reference systems. Specifically, a 64-bit floating point number relating to the horizontal velocity of the rocket was converted to a 16-bit signed integer. The resulting number was larger than the largest store-able number, and thus the conversion failed. As we watched this unfold, we knew the research we were doing could hold the key to preventing such disasters in the future.
This research ultimately became Virtual Tabulation®, the patented, compilation-based software present in all Configit’s products and solutions. VT calculates every possible correct configuration before a product is manufactured, ensuring only valid configurations are ever sent to the manufacturing floor. Since its founding, Configit continues to grow, developing products and solutions to address digital transformation, Internet of Things, and the increasing proliferation of software consumer products.
Are you working on any new, exciting projects now? How do you think that might help people?
We are currently focusing on shaping a new category to help the manufacturing industry.
This category, configuration lifecycle management (CLM), enables manufacturers to extend collaboration on configurable products through flexible knowledge capture using the most powerful modeling in the industry.
Unlike most PLM, CRM (including CPQ) or ERP systems, Configit’s solutions place a priority on the power and efficiency of the product modeling experience. By capturing product knowledge from both system and human sources, companies can release new products and product updates to both the market and downstream systems faster, giving them a significant competitive advantage.
CLM Modeling is a set of feature rich tools enabling you to obtain full control of all configuration definitions across the enterprise through authoring rules and converging master data across engineering, sales, manufacturing and service functions.
For the benefit of our readers, can you help explain what exactly digital transformation means? On a practical level what does it look like to engage in a digital transformation?
Digital transformation is not a new trend. In fact, it is decades old, especially for manufacturers.
It is essentially changing how you do business to adapt to the new digitized world. However, digital transformation challenges and opportunities still remain, one of which is the need for end-to-end integration of siloed digital solutions that are focused on digitally transforming a specific functional process. For Configit, the ultimate vision is to connect all of these siloed systems to enable one end-to-end product lifecycle management process that transcends departmental functional barriers.
The goal of digital transformation for any company should be to not only make it efficient, but also more agile, responsive and competitive.
Which companies can most benefit from a Digital Transformation?
Manufacturers are facing digital disruption on many fronts and manufacturing enterprises are currently amid a major transformation as a result. Industry 4.0 and new customer demands for personalization require investment in smart factories and adoption of new business models.
This is forcing manufacturers to rethink how products are designed, manufactured and sold. With increased digitalization, automation, and software in products, ensuring consistency and reliability in the delivery of products to meet customer needs is now critical.
We’d love to hear about your experiences helping others with Digital Transformation. In your experience, how has Digital Transformation helped improve operations, processes and customer experiences? We’d love to hear some stories if possible.
In our experience, we have seen our customers who have put in place the right tools and solutions become more prepared and, in some cases, continue business as usual despite the recent global challenges.
A customer success story I can share, was the seamless integration of Configit’s Configuration Engine and Viessmann’s extensive product portfolio, which resulted in greater efficiencies and cross-selling opportunities.
With a broad range of global partners and multiple price lists, Viessman’s partners were finding it difficult to match the demands of their customers to the correct product and price.
Working with Configit, they created a solution called The Quote Assist that provides their partners guidance when configuring complex heating systems, including technical validation, that ensures the final product is complete and functions properly.
Today, Viessmann’s partners are able to quickly and easily configure heating systems while reducing product complexity, ensuring technically valid configuration, and eliminating error.
Has integrating Digital Transformation been a challenging process for some companies? What are the challenges? How do you help resolve them?
Several studies have shown that the main barrier to success with change initiatives and digital transformation efforts is the lack of cross-functional collaboration. For the manufacturing industry, specifically, customer demands are increasing, and new business models are emerging. This necessitates for new cross-functional processes and a reconsideration of how products are designed, manufactured, sold and serviced. It is worthwhile to explore how solutions like Configuration Lifecycle Management (CLM) provide the single source of truth that enables cross functional collaboration, which is a necessary first step in enabling true digital transformation in manufacturing.
Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are “Five Ways a Company Can Use Digital Transformation To Take It To The Next Level”? Please share a story or an example for each.
- Cross-functional Collaboration- this is a critical core competency for today’s digital organizations, especially in manufacturing. Ensuring that the end-to-end product design, manufacturing, sales, delivery and service processes — or product lifecycle — can be continuously improved and adapted to meet new customer demands and competitive challenges is of utter importance. This requires cross-functional collaboration on a scale unseen to date, and that can’t be achieved without digital transformation.
- Increasing Product Complexity- Innovation doesn’t stop. Increasing features, functions and options that reflect changing customer preferences continue to rise. With CLM, the product definitions created by engineering are aligned with the customer preferences from marketing, resulting in faster time to market with new and updated products.
- Evolving Customer Experience- Customers need to know which options are valid when ordering a product and they also need to know which options are no longer valid once a choice is made. This information needs to be consistent with the original product design and current manufacturing capabilities including parts and material availability. Personalization and customization are intended to enhance the customer experience, but not delivering on that promise can prove more damaging than never making the capability available.
- Manufacturing Optimization- Stopping a production line can cost your company millions of dollars per hour, not to mention the negative customer experience. By having only accurate, verified configuration data available to sales, manufacturing, engineering and service, there is no chance of one business unit building a quote based on outdated product or pricing data.
- New Product Introduction- If you’re not first, you’re last. As previously mentioned, your company needs to be responsive to changing market preferences to execute new product introductions at scale. With CLM, marketing and engineering data is shared in a way that enables companies to leverage customer input into new product design faster.
In your opinion, how can companies best create a “culture of innovation” in order to create new competitive advantages?
Embracing unanticipated disruptions. This is exactly what technology has been preparing for. With the right technological systems in place, things like virtual collaboration, new product development, and remote work, change from being a roadblock to a competitive advantage.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
Something I learned over the years, is many people preach that you should know your customer, which is important. It’s super important. But, then at times you forget about your customer’s customer. Knowing about your customer’s customer is next level understanding of behaviors and strategies from your customer, and what they do and why they do things. Acknowledging that will actually drive a deeper level of understanding on the challenges that you need to address to help your customers succeed.
How can our readers further follow your work?
This was very inspiring and informative. Thank you so much for the time you spent with this interview!