Ep. 13 René Obermann headshot

Decoding Digital Transformation: René Obermann on Driving Change


37 min

Ep. 13 René Obermann headshot

37 min

Change is rarely easy, especially at large, global enterprise companies. It’s a lesson that René Obermann—the former CEO of German telecom giant Deutsche Telekom—learned first hand. In this episode, hear how René was able to gain alignment across tens of thousands of employees and transform the organization to become a digital leader in the telecom sector.

Read transcript

“You always have to think where you come from, never forget that. You are a human being who happens to be in charge for a couple of years to do this. The people on the front line… These are the people who matter.”

Quick takes on...

Preparing for Disruption

“As an industry, as a company, and as a leader, you constantly have to watch out for what can disrupt you and be ready to disrupt yourself, even if it's difficult sometimes to convince the capital market, your shareholders, that the company goes through transformation where the outcome is less clear.”

Company Ethics

“It is a must not to let the door open a single bit, a little bit even, for bad business practices or bad behavior, or even non-compliant behavior. An organization follows what you do and not necessarily what you say. You need to exemplify transparency, honesty, and compliance yourself. Otherwise, you don't deserve to run the company.”

How to Encourage Innovation

“There must be an institutionalized system for people to be encouraged to bring up innovation ideas. There needs to be an institution in the company, like a team or so, which regularly looks at those things and brings them for judgment as to whether it's applicable, it's doable and what kind of resources it will take, and the people get feedback.”

Meet your guest, René Obermann


René Obermann spotlight on Decoding Digital Podcast

René Obermann currently serves as Managing Director at Warburg Pincus as well as Chairman of the Board of Directors of Airbus. Previously, he was CEO of Deutsche Telekom, where he led the organizations through a major digital transformation. A lifelong entrepreneur, René founded ABC Telekom, a company distributing telecommunication equipment and providing technical services, while still in school.

Listen to the next episode

Ep. 14 Aaron Levie on Decoding Digital podcast talking about enterprise growth

Decoding Viral Enterprise Growth: Aaron Levie on Building a Brand

Decoding Viral Enterprise Growth: Aaron Levie on Building a Brand

32 min

“Work doesn’t have to be complicated and software doesn’t have to suck.” That’s the message that Aaron Levie—co-founder and CEO of Box—believes enterprise companies need to take to heart. In this episode, Aaron shares his vision on the new era of work and why companies need to focus on building simpler, better software that makes it easier for people to collaborate.

Episode transcript

Rene Obermann:  [0:06] You always have to…

Rene Obermann:  [0:06] You always have to think where you come from, never forget that. You are a human being who happens to be in charge for a couple of years to do this. The people on the front line, they make the money for the company, the salespeople in the field, the technicians, the great developers, and all of that.

[0:20] The service people who take 100 calls or 200 calls a day from customers and handle complaints. These are the people who matter. As long as you don't forget that, I think that's a requirement to be allowed to run a big company.

Dan Saks:  [0:35] That's Rene Obermann, Chairman of Airbus and Managing Director of Warburg Pincus. Rene is one of Europe's business legends. When he was 23, he started his first business ABC telecom while still in school. Two decades later, he rose to become CEO of Deutsche Telekom, the largest telecom provider in Europe.

[0:56] While there, he successfully led the company through an enterprise wide digital transformation. Rene Obermann is a luminary in the European business world, and I'm honored to call him a mentor and friend.

[1:09] This is Daniel Saks, co CEO of AppDirect, and it's time to decode digital transformation. Welcome to "Decoding Digital." A podcast for innovators looking to thrive in the digital economy. I'm your host, Daniel Saks, and I'll sit down with other founders, CEOs and change makers to decode the trends that are transforming the way we work. Let's decode.

[1:42] Rene really thrilled to be speaking today. Thanks for the time. I recall, we first met at CeBIT in 2012, which is a massive tech conference. You were on stage announcing Deutsche Telekom's cloud business, which was very innovative and risky at the time because a lot of people in Germany hadn't adopted the cloud.

[2:02] Would love to start by you sharing your experiences, CEO of Deutsche Telekom on embracing innovation and cloud.

Rene:  [2:09] Telekom was in a difficult situation as an ex monopoly company when I became CEO. It was losing a lot of customers. It was in the midst of the technology transformation. Prices were coming down, etc., etc. It had three divisions. One was the mobile division, one was the fixed line traditional division, and one was T Systems.

[2:30] Three divisions about 210,000, 220, 230,000 people and massive restructurings. On the one side, we had to restructure the traditional ex monopoly business to become competitive again. On the other side, we had to find areas to grow. That was a big challenge.

[2:50] Fortunately, we had the widest division and we had opportunities around the corporate and enterprise division because our corporative customers were looking for solution providers as opposed to just communication access providers. In our innovation efforts, we looked at what would be fantastic growth opportunities. We identified that the world would go into cloud.

[3:13] We probably were a bit ahead of our time because there was a lot of resentment against cloud migration. Since we had such a trusted relationship with a lot of corporate customers, we felt that we could also take them by the hand and lead them into the cloud.

[3:28] It was part of an effort to lead in innovative trends and to make use of the fact that we had the strongest [inaudible] customer base on the corporate side.

Dan:  [3:38] At the time, it seemed like many corporate leaders were resisting the cloud and not embracing innovation, particularly in Europe and in Germany for a variety of reasons, what led you to be one of the first to adopt and take that risk?

Rene:  [3:51] It was clear that on the long run the kind of transfer dominating, one was mobility and the other one was that it makes no sense that every company runs their own IT infrastructure, that eventually things will get into the cloud. We were convinced that this would happen. They didn't have a choice. You can either run behind or you can try and beat some of these developments.

[4:15] We decided for the latter. Again, once we were restructuring big part of the company, the latest part of the company, we had to embrace new trends and innovation early in order to create new perspectives. We had no choice but to drive some of the innovative opportunities and put results behind that.

[4:34] We did that successfully in mobile as seen for instance in the US you can see with T Mobile. We also did that in parts of all corporate barrier services and also leading in some of the trends such as in cloud.

Dan:  [4:45] Let's touch on that, on the mobile phase. Obviously you are one of the early adopters of Apple and worked with them to release the iPhone both in Germany and across your markets including T Mobile in the US. Can you tell me about what the decision was to bring it to market and some of the stories behind that our original Apple deal for the iPhone?

Rene:  [5:04] 15 years ago, 2005, 2006 around that time frame, there weren't any smartphone of today's [inaudible] . It was more like closed ecosystems.

[5:15] At least some of us in the team already believed that with IP we could do more and more things with a smartphone, and the smartphone would eventually convert into a control center for a lot of your personal services, information services, communications, and also for music.

[5:34] Then when Apple started to approach the potential customers and partners for introducing the device, we were immediately convinced. As we had done a lot of thinking about those new trends, we were convinced that this would be our opportunity to promote our brand to be, again, an innovation leader, not just an old ex monopoly company.

[5:55] We saw that as a big opportunity to partner with Apple will be at highest regards for, to introduce the product exclusively in some of the European markets. If I recall it correctly, we were introducing it in six European markets in 2007 and '08, and then later on also in UK. We'd put a lot of effort into winning Apple support. It wasn't easy because it was competitive.

[6:17] Others wanted to do the same thing, but we could convinced Apple we would be the best ports. A, we had the best network, we put a lot of effort into always best connected on the wireless side. B, we had a distribution system which was fairly controlled and strong. These were the key criteria also for Apple to pick us. We invested into that [inaudible] .

[6:38] Steve Jobs came in 2007 to do the introduction of the Apple iPhone into the German market. I will never forget that because the whole fan community wanted to be part of that introductory session in Berlin as [inaudible] .

Dan:  [6:52] Can you tell me more about that moment, bringing Steve Jobs to Germany there with his fans?

Rene:  [6:58] I guess I would say goose skin still, because Steve was so charismatic. We had a reception prior to going on stage. People were queuing outside the room. They all wanted to hear it from his mouth what he had in mind. A lot of senior business leaders joined, they all wanted to be part of that event.

[7:14] It was so impressive. He was such a charismatic individual, and of course an icon in [inaudible] . Yeah, he was very impressive. I will never forget that. I still cherish the pictures I have on my iPhone.

Dan:  [7:28] That's incredible. I know many people are a fan of you and your career, including myself. One of the things that I have to say about you is your incredible humility and passion for innovation.

[7:40] When we were first at that CeBIT 2012 moment, I went up to you, really thrilled to meet you and wanted a picture with you and you said, "Wait. I'm going to take a picture of you because you're an innovator, and I respect that." I'll never forget that moment that someone who's so highly regarded and runs such a large organization, took the time to think and compliment innovation.

[8:00] I know that you had a lot of early success in your career, starting as an intern at BMW, and then becoming entrepreneurial in your own right. Can you tell us about that journey, and what led you to be the CEO of Deutsche Telekom?

Rene:  [8:14] After high school and military service, I wasn't quite sure what to do next. I was torn between studying medicine and going into business. I did an intern at a small IT consultancy firm and learned a little bit about IT at the time.

[8:29] Then I heard about these education programs from BMW [inaudible] , IBM, and some large companies who would offer an apprenticeship program in the company, very structured and good program, at the same time, some evening courses at a local academy to deepen the knowledge in business, and it was paid.

[8:48] To be honest, I needed some money, so I had to sign for that program rather than go to university. Quite frankly, I learned a great deal there. When I studied later on macroeconomics in my first and second semester, it was fairly easy because I had learned quite a bit already. I started a business next to doing the university. That business grew very fast, it was in telecommunications already.

[9:12] Initially, I was selling hardware and doing some technical service out of my study apartment. I almost did a seven digit revenue out of my study apartment. It was a small room, and very improvised. I bootstrapped it. Then took it from there, the next step was to have a small office. Again, very improvised. No venture capital at the time.

[9:33] I didn't even know what it was. I bootstrapped this whole thing, and then it grew and grew. I had a partner for a couple of years who brought in expertise and also money, who left [inaudible] , who left three years again. From there, we took it to become one of the first mobile virtual network operators, some five years, six years after founding it.

[9:53] The company had to be brought to the next level. We did that by bringing [inaudible] as the majority shareholder and learn a great deal from these people in Asia. Also, they had some other activities in Europe. Did that for about another six years until end of '97.

[10:12] Then the former CEO of Deutsche Telekom wanted to strengthen his mobile division, which he had started from scratch on the green field basically and not as part of the large corporate elephant. He was trying to find some young rebels to build that business up because, at the time, it was the revolution.

[10:31] Fixed band was a predominant means of communications, and wireless was attacking fixed band in a way. He was a very far sighted person, very visionary person. He created his own competition by setting up the mobile business, T Mobile, as it is called today. T Mobile in US, T Mobile in Europe.

[10:49] Ron Sommer was his name. He hired two rebels, Kai Uwe Ricke and myself, and charged us with building his mobile division up and competing effectively against Vodafone and others. Our mission was very simple, just make sure you become market leaders as the market was growing so fast. He wanted us to become market leaders.

[11:08] We did that within, I think it took us some three years to overcome Vodafone and become the undisputed market leader in Germany, and later on also in other markets. Then eventually left the board of Deutsche Telekom, where mobile was only one division which I was running.

[11:26] I left the board of Deutsche Telekom to appoint me to and charge me with running the entire group. That was 2006. I was only 43 years at the time and fairly young to do that. The whole group was a massive restructuring case at the time. Whilst mobile was a growth story, the rest of the group was pretty much under pressure.

[11:52] Given the super intense competition, given technology change from legacy technology, proprietary technology to IP, which would mean delayering basically from service to network and having all kind of competitors come in, fast price erosion, etc. Here is this legacy company with 160,000 or so people just in Germany, of course, that had to be restructured.

[12:18] That was my mission from then onwards. It was an entirely different game than running a fast growing division of the group. Do you see what I mean? All of a sudden, I was confronted with something I've never done before. I must admit it was very tough. For three years or so, I was always at the edge of what I could manage because you have to restructure more than 50,000 jobs.

[12:41] We had to close down 100 locations and rebuild new, modern ones and consolidate. It was such an inefficient organization. I had to redo and re engineer all the business processes, create a new brand which was powerful and that people would rally behind. It was very, very intense. Eventually, it worked and the company stopped the bleeding and became competitors again.

[13:02] Then after seven years of being the CEO, I felt like the world goes too fast, and there's too much innovation out there, too many companies like yours, Dan, and I'm running this big elephant. I just needed change. I asked the board to accept that I would leave earlier than my second contract period. The board did not like that idea, but they eventually accepted.

[13:25] I had another year of transitioning to my great successor. I left the company with a good feeling, because it was more competitive, and it was on a good course. As you see today, it's still the strong company, the most successful telecommunications company in Europe.

Dan:  [13:41] It's incredible. During your tenure, it was a Fortune 100 Global entity, over 200,000 employees. What was it like going from student in the apartment with a bootstrap business to managing so many people and so many business lines that were critical for not just the country, but for the world?

Rene:  [13:58] You always have to think where you come from. Never forget that. Never believe that all the pomposterous environment, the private jet, the drivers, the security and all of that, that's got nothing to do with you. You are the human being who happens to be in charge for a couple of years to do this. Everything around you is somewhat artificial.

[14:21] You never forget where you come from. You never forget where the money is being made, and that the pyramid has to be upside down and not the other way around. The people on the frontline, they make the money for the company    the salespeople, the field technicians, the great developers and all of them, and the service people who take 100 calls or 200 calls a day from customers and handle complaints.

[14:45] These are the people who matter. As long as you don't forget that, I think that's a requirement for being allowed to run a big company. Never get carried away with power and never get carried away with big income, or so just forget where you come from. In a very people intense organization, this is most important that you never forget who makes the money.

Dan:  [15:03] Can you share more about your values and how that stems and grows your leadership?

Rene:  [15:11] My value system is multifaceted. I find it sometimes difficult to simplify that and reduce it to two or three key things. I want to try nonetheless. Personally, what I think matters most is remain a reliable individual. If you make commitments, that you honor those commitments, that you don't forget what you promised.

[15:33] Often, because there are other opportunities or things may be even more profitable in that very moment, that you stick to your commitment and be a reliable partner to other companies, to your employees, to your customers, etc.

[15:46] The second thing is, as a leader, I think it is a must not to let the door open a single bit, a little bit even, for bad business practices or bad behavior, or even incompliant behavior. An organization follows what you do and not necessarily follows what you say. You need to lift transparency, honesty and compliance yourself. Otherwise, you don't deserve to run the company.

[16:13] It has become even more important over the last years because nothing what the company does remains under the surface. You have to assume everything you do is good so it can be published, which is not easy to follow always. You often get into difficult situations having to make difficult choices.

[16:33] Then the third thing I said already, unless you always create room for innovation and you're always ready to disrupt yourself, success is extremely dangerous. If you run a successful company, and you're not constantly paranoid to be ready to disrupt, say you have great service but all of a sudden there came IP messaging.

[16:52] We as an industry and we as a company failed to see WhatsApp coming and eat away our text messaging revenue at the time. We as leaders didn't see that it was high time to kill the established business model and create something more customer friendly, more user friendly and also more affordable. When that happens, you pay the price.

[17:18] As an industry, as a company, and as a leader, you constantly have to watch out for what can disrupt you and be ready to disrupt yourself, even if it's difficult sometimes to convince the capital market, your shareholders, that the company goes through transformation where the outcome is less clear.

[17:36] When you attack your own revenue streams with new products, which are probably less profitable per unit, you can eventually make up for it because you get much higher marketing segments. That's always the journey of discovery, and it's always coming with uncertainty in the last years.

[17:50] It's very hard in established firms to drive a transformation innovation process and disrupt yourself. You've got to be ready for it. If you don't, somebody else will and you're dead.

Dan:  [18:02] Great advice and great value system. On the disruption point, what advice would you give to an employee within a large organization who has an idea, who wants to innovate, what do they need to do in order to convince the CEO or their superiors in order to embrace that innovation?

Rene:  [18:19] Well, I guess bring the point. Bring it to the attention of management, and try and argue the case. The first thing is, an organization has to be open for that. As long as there are direct channels to communicate and a CEO or a board who allows people and encourages people to communicate directly, bring up those ideas and rewards those ideas.

[18:42] There must be an institutionalized system for people to be encouraged to bring up innovation ideas. There needs to be an institution in the company, like a team or so, which regularly looks at those things and brings them for judgment as to whether it's applicable, it's doable and what kind of resources it will take, and the people get feedback.

[19:06] Not every idea of innovation can be done and implemented, but, at least as an employee, you need to get feedback. This has to be looked at, has to be evaluated and there are good points and there are probably less [inaudible] points, but you get feedback. An organization has to be open. The glass ceilings for people not to be able to communicate with their leadership need to be eliminated.

[19:30] Then to be pragmatic, as a CEO you can't deal with a hundred innovation proposals from within your organization per day, that just goes too far. You need to establish a little bit a team to help you do that. Unless you do that, people don't feel encouraged, you don't leverage the collective energy of an organization of innovation.

[19:49] See what I mean? Everybody has great ideas to [inaudible] and encourage people to bring them up and give them feedback.

Dan:  [19:56] It sounds like a key piece of advice you'd have for your CEO peers is to ensure that within their organizations there's a framework of how to innovate and how to bring these ideas. When you were at DT, did they have existing systems, or was that something you had to build? What was the process of getting support from the board?

Rene:  [20:15] Principally, there was the opportunity to write emails to your leadership team, that's key. I would not say that any of my predecessors would not have been open minded at all. We just evolved it further and we established a direct channel [inaudible] the intranet.

[20:32] Later on, we also established a team to judge, to discuss innovation and bring things up to top management's attention. Of course, not every single bit of juice which was coming inside the organization upwards could be handled directed by myself or by my board colleagues.

[20:47] We established a framework in the team to make those assessments, give people feedback and reward those things which eventually would be implemented. Could be new processes, could be frugal innovation, could be product innovation, could be small features, could be small features with a big effect, could be cost management or eliminating stupid processes.

[21:10] Innovation has many facets and that also needs to be clear in the organization.

Dan:  [21:15] Amazing. You mentioned balancing this innovation and ability to disrupt yourself, but then also living by the highest standard of ethical compliance. One concept that we really see and talk about on Decoding Digital is digital citizenship and the idea to be a good digital steward of the future when using technologies.

[21:37] Can you speak a little bit more to how at scale you institutionalize compliance and ethics in new endeavors that people are innovating on?

Rene:  [21:46] Well, that's a broad topic. Compliance has many facets. Let's say, do the right things on IT security or on safety, security by design, for instance, when you develop new products and new services or new business processes, don't put the brakes when the product is ready.

[22:07] Try and do the security experts right up front, make sure that potential vulnerabilities are seen at the beginning and taken care of before anything gets rolled to the market, as an example. A broader topic of compliance organization, first of all, the compliance officer has to be part of the top management team.

[22:28] In our case, after having gone through a number of your wrongdoings of the past. We sorted out big scandals, to be honest, like data breach scandals. We established a resort on the board, a segment of the top management team which will deal with data protection, legal and compliance overall. That was one of the top executive functions that is, today, more of a common practice.

[22:50] 10 years ago it was not so much common practice. [inaudible] these people would report to the CFO or so. Maybe the board function as such we gave resources to that person in the organization and we established rules that whatever parts of the other company would do and develop, they would run by that team in order to ensure that compliance is taken care of right up front.

[23:14] It's also a measure of how you design the structure of your organization, how much visibility there is. [inaudible] from the top is essential. As CEO you need to constantly make your organization aware that this is an important topic, and you need to take consequential actions if things are not going the way they should. It has many facets, I can't summarize it in a couple of sentences.

Dan:  [23:38] Specifically around hard decisions as a leader that might involve some of the essential scandals you discussed, whether it's a data breach or another challenge. When these things come up, how do you react to it?

Rene:  [23:50] History says that many companies try not to disclose, not to make their mistakes public. I've learned over the years that there's this law of candor.

[23:59] If you're open as an organization about things which you managed well and things which went wrong and explain, d also explain what your learnings are and how you take precautionary measures for not having that repeat into the future, I think the public usually appreciates that. Your stakeholders usually appreciate that.

[24:18] For instance, if you make a mistake with a customer's system, which you have been in charge of, and you discover that mistake and you inform your customer, you involve the customer early and be open about it, and then you fix it. That usually goes better than trying to fix it and not disclosing it and the customer finds out themselves later.

[24:37] That particularly relates to IT security matters, or to network security matters also. Be transparent and disclose rather than trying and believe that you can fix things silently and try to avoid any negative repercussions from being open and honest.

[24:52] On the more proactive side, for instance, when you are in a stress situation financially and you need to take hard decisions as to what to do and what not to do, you can cut a lot of costs, but you do have to think about your company's future. There are usually a couple of projects, maybe two or three key projects, which you can't afford to cut back costs.

[25:18] Then to tell your shareholders that you sacrificed the last few points of potential returns for a couple of years in order to maintain these important development projects because they determine your future. That's not easy but needs to be done sometimes.

[25:34] You've got [inaudible] what determines your next 5 or 10 years, particularly when you're an infrastructure, you can't run a company with two or three year view only. You have to company with a 10 plus year view, because you're building infrastructure, telecom communications infrastructure, in this case.

[25:51] I would always say, sometimes you have to make very hard choices, and sometimes they go against short term interests, but for the long term profitability of the company. That's very easy to say, but it's hard to communicate. For a CEO, you get under a lot of pressure, sometimes for two or three years, if you don't do what part of your constituencies want you to do.

[26:13] The same goes for restructuring. This is unpopular in Europe. It's easier in the United States, but it's very unpopular in Europe. To explain to your constituencies why some locations have to be shut down because they're no longer competitive, well, why do you have to let thousands of people go?

[26:31] You're free with every individual [inaudible] , and you need to take measures to mitigate your facts and you need to put a lot of resources to make sure that nobody has normal future there, and then invest in requalification of these people. You need to treat everybody with respect, but eventually, you have to do what has to be done.

[26:49] Those decisions can be extremely brutal and hard. Sometimes people procrastinate those decisions. The one thing I've learned is when you see a problem, tackle it and don't wait, even though it may be too difficult to do too many things at the same time. Tackle those problems right up front, don't wait.

Dan:  [27:06] Incredible advice. How do you deal with having so many problems, issues, things to deal with, when there's just an abundance of things to do and limited time? How do you personally keep yourself focused on what's important? Any advice you'd give to other leaders?

Rene:  [27:22] I usually have to [inaudible] of the top 10 things you got to do. That's part of the leadership role, is to ensure prioritization. Your day to day challenge is to prioritize, not to get carried away with the ad hoc things and forget about the mid to long term important topics. My advice is to make yourself aware constantly about your top priorities and not lose sight of them.

[27:50] Also carve out time to reflect, which is easy said, but we're all in a multichannel online world, get so much information from so many different channels that it's hard to sometimes carve out time to think. Not only think what happens, but also think what has to happen going forward. Carve out time to think.

[28:11] Unless you have self discipline and you have your rhythm in your day, for instance, my day often starts off at a very early time in the morning with doing some exercise. I use that, it's almost self contemplation, and it gives me time to think. I guess many of you will do the same thing anyway.

[28:28] I think it's important not to forget to organize your day and to carve time out for certain things to think through and not get carried away with the day to day business too much. Constantly remind yourself of your top few priorities.

Dan:  [28:42] You mentioned being the chair of Airbus and, obviously, a huge organization, global impact, but very dependent on the cycles in the economy. Currently with global travel halted, I'm sure there's challenges. How do you think through advising the board, the CEO, on the turbulence? What are some strategies you'd have for the organization?

Rene:  [29:05] I think, in the case of Airbus, it is the CEO who speaks for the company and not the chairman. That's our general policy. I can say that the industry, and Airbus as such, is challenged with a very abrupt effect of COVID. A year ago, we were struggling to get to the production rates we needed in order to fulfill our customers' expectations for supply and products fast enough.

[29:31] Our [inaudible] was full, and so on. Then within a matter of weeks, that situation changed. I am deeply impressed by the level of precision, methodology and consequential action of reacting to that crisis, securing liquidity, ensuring that our capacity gets adapted to the current normality.

[29:55] What we've introduced is much more flexibility and scenario driven planning to be ready and capable to adapt to situational changes. We also, I must say, have enjoyed great support from our governments regarding furloughs teams. We could save a lot of talented and great people in the company, in conjunction with these furloughs teams who are also trying to keep at full speed.

[30:21] With regards to innovation development, we want to be a pioneer in decarbonized air transportation and so these programs are being pursued and so on. I must say that, from a board perspective, I couldn't be more happy with how management responds to the crisis and how consequential this feedbacks and how dedicated they are. We have fantastic people at Airbus.

[30:46] I have been traveling quite a bit and seeing locations more recently, even last week in France. I was deeply impressed that level of engagement and commitment these people show. I'm very proud to be part of that company.

Dan:  [30:57] That's incredible. How different is it being the leader on, let's say, the Airbus board, and then contrast that with your experience as Spotify board? What is the difference in the culture and discussion? [laughs]

Rene:  [31:10] I'll let Daniel explain for Spotify. It's, of course, totally different dynamic, totally different business model. Airbus is a large company and requires a more formalized structural governance model. Then at the time, some years ago, I mean Spotify today is a listed company.

[31:27] I'm sure they evolve their systems further. I was deeply impressed with the level of innovation, the entrepreneurship and the cool products which I love.

[31:37] At DT, you may recall this, Dan, back in 2010 or 2011, I can't recall the year now, but we introduced Spotify as a partner of Deutsche Telekom and we increased marketing spendings and attention around the packaging with Spotify, zero rated Spotify data stream, so customers could afford using Spotify on their wireless device.

[32:02] We had a great proposition in Spotify at the time advertised, on their website, Spotify loves Telekom. That was one of our proudest moments really, because I had this old fashioned DT directly transform to the new world. We had brand ambassadors like Spotify or Phil Libin from Evernote or the guys from Box or other [inaudible] .

[32:23] We tried to cooperate with a lot of west coast companies at the time in order to get our company more innovative and to create value at services for our users. Spotify was one of the first, so I was very pleased.

Dan:  [32:35] It's incredible to see their success. To your point, the collaboration between different brands is fascinating. One of the things that I find you have a unique perspective on is embracing different types of leadership. You mentioned Daniel from Spotify and some other West Coast leaders.

[32:50] You worked and led at DT, Airbus. Even with DT you had John Legere, who's obviously an interesting character and personality. Can you tell me how you balance those personalities? Is there one secret sauce to success as a leader or do you feel like you can have many different recipes?

Rene:  [33:07] I think there are many, different recipes and really the situation. It depends on the industry. It depends on the situation the company is in. There are leaders for different phases of organizations, that's clear. Tim, my successor at Deutsche Telekom, for instance, he's a much better CEO for the phase which Deutsche Telekom is in now. He's a fantastic successor.

[33:27] When I was in charge of leading the group, the mission was basically to make the company competitive again and give that company an innovation appeal to the market, to small companies and start ups as much as to consumers in many different markets.

[33:41] Also, to hopefully then eventually get the US business back on track which was suffering for a whole lot of reasons and for several years before. John was a blessing for the company, [laughs] quite frankly, because when we found John. He was certainly the most unusual person. Initially, we had a meeting at San Francisco Airport. He came a little bit late.

[34:03] He looked like a very smart and very conservative business person. He wore the dark suit and he had short hair etc. The one only thing which I noticed with John, that was slightly different, was he had a purple or magenta, which was Deutsche Telekom's color, he had magenta shoe laces in his very elegant shoes. I found that was a sign of, let's say, creativity.

[34:26] We discussed the situation of the company. He got it immediately. He saw the opportunity, and he was very well prepared for that discussion. He saw the opportunity. Then I brought him over to Berlin, in order not to expose him to the head office of Deutsche Telekom, which was in Bonn. I brought him into Berlin first so he could see, we also had a big representative office in Berlin.

[34:47] He could see the innovation part of the company more so than the traditional part. Only thereafter, when I tried to enchant him, to charm him, to joining our group, I brought him into Bonn. Of course, he would not immediately be an appealing guy to all the more conservative characters at the company at the time, but we won him. The result is well known.

[35:09] I consider it was a blessing that John decided to join Deutsche Telekom. He even launched T Mobile in the United States for us, successfully. Together, then, we found, in 2012, Mike Seibert was also fantastic leader and a great marketing expert. He's now a great CEO.

Dan:  [35:26] It's super interesting. One of the things I have to say is your breadth of identifying such diverse talent in organizations and bringing partnerships together to create stronger outcomes. I just want to thank you again for all your mentorship and leadership you've provided me.

[35:45] You're such an inspiration on how to bridge the gap between large, incumbent companies that are embracing innovation and small upstarts. Thank you again for joining us.

Rene:  [35:55] Thank you so much for our kind words, Dan. The inspiration comes from you to me as much as the other way around. Thank you so much for all the good communication we had and interactions we had. I hope to see you soon.

[36:07] [background music]

Dan:  [36:08] Excellent. Thank you. Likewise. On the next episode of Decoding Digital.

Aaron Levie:  [36:16] We should all be building software that doesn't require training, that doesn't require to change management, because it's either so dead simple, so delightful or so obviously necessary that it's a better way to do things that we just want to adopt it right away. That's the Holy Grail I think we all are striving to get to.

Dan:  [36:32] CEO and visionary behind cloud software company, Box, Aaron Levie. Thanks for listening to Decoding Digital. Make sure you never miss an episode by subscribing to the show in your favorite podcast player. To learn more, visit decodingdigital.com. Until next time.