S8E12: Becoming co-CEO, with Matthias Berlit (CEO, Inform GmbH)

Richard Medcalf
Matthias Berlit is the CEO of Inform software, which is a provider of advanced decision making solutions to some of the world's most complex businesses. In fact, it's not quite true. He's a co-CEO and he was part of this business for many years until the original CEO stepped away and they recruited four co-CEOs to take the job. It's a fascinating scenario, we get dive in with Matthias into his learning curve as one of these four co-CEOs. How do they work together? How does it work? What's the strength of the model? And what are the disadvantages? What does it like to take over a business as one of the four but we also get into how has Inform Software grown and sustain that growth over decades, using a really interesting strategy that he calls cell division. This is a really interesting conversation with a CEO who's had a unique journey to enjoy this and learn what it might look like for you in situations of shared leadership.

Hi Matthias and welcome to the show.

Matthias Berlit
Hello Richard. Thank you very much.

Richard Medcalf
Welcome. I'm really pleased to have you here today, I think you've got a really interesting background and you're one of the co-CEOs of Inform based out of Germany, don't just give us a start by giving us a bit of a quick background on what is informed as a business and what just a bit of the backstory about how you came to have the CEO role.

Matthias Berlit
Yes, great. Thanks. Inform is specialized in applying mathematical optimization to real world operations. So for example, what I always like to, to speak about is the operation of an airport, every one of us is fascinating by what are these activities on the ground of this out of the of the airport field and it's, of course, in very important to have this airport being handled as quickly as possible, you know, get the people to the plane, get the people from the plane, getting the fuel, they're getting the meals there, etc, etc, the cleaning and you can model all these different business processes in our application and our application is then optimizing the use of the different resources. For example, it dispatches a passenger bus, to a plane where people need to get to or get out of it dispatches the personnel at the check in counters. They are I don't know, I think in Frankfurt, alone at 1000 people being dispatched to these kinds of counters and, yeah, it's highly important for the customer satisfaction, that you really have the necessary amount of people. But on the other side, not people sitting there and being bored.

Richard Medcalf
Yeah. So you try to max match resources to demand in some ways and across a comple xsystem?

Matthias Berlit
Exactly and in doing this on a, let's say, on a strategic level, and on a tactical level, and then on the real operational execution level.

Richard Medcalf
And it's the pain point normally that people the costs are too high as they are or is it that it's just become unmanageable in the business? Or is it that people see new opportunities? Why would people tend to implement this kind of system?

Matthias Berlit
Yeah, it's a mix, I would say. Of course, saving money. eliminating waste out of the operation is always a hot topic but then also shortage of people today is really an important factor that you don't get enough truck drivers, for example, or that you want to offer jobs with a kind of flexibility. So there's a workforce management system in place, which allows you to have like dynamic shifts, working shifts, got it with dynamic length and so on. So you can offer jobs which are more attractive to to more people. I think Inform is a really special company. Actually, I started Hear around 20 years ago, slightly more than 20 years ago already now, when I studied physics before, so and then I decided not to go there into an academic career or something, I really wanted to go in the business somewhere to work with people communicate more, not sitting in an office somewhere, and simply doing calculations and well, and then I started with inform, looking in the first glimpse at a couple of years here, I'm not thinking about having a lifetime occupation and in the end, well, it's 20 years now.

Richard Medcalf
That's just like my marriage, right? I was living in France, I came to France for one year, too, and I got married, and now I've been over 20 years, right?

Matthias Berlit
Sometimes it simply works out.

Richard Medcalf
So you joined Inform, coming out of university or something similar in a junior level, I guess and obviously 20 years later...

Matthias Berlit
Actually, I started in project management, going into consultancy roles in project was great customers like Mercedes Benz, for smog in Mexico, and so on. So it's a really great and interesting project. And already in 2005, then I think it was like, like four or five years after I started, I got my first leadership role for a team of people working for a specific industry. So it was like manufacturing logistics. So back then it was like 15 people offering solutions for companies like Mercedes, BMW, etc, etc. So steel companies, chemical companies, and so on and well, we as a team, we, we grew the business and in 2010, the business, the this kind of business segment grew so big that we divided that business unit into two business units and so since then, since 2010, we had our own business unit, which then again grew to about, I don't know, 130 people, like at the end of 2020 and then in early 2021, I got appointed co CEO was three others. All of us. Were our crew here at inform, I think three of us are here for more than 20 years. One is with us for 12 years, the youngest and...

Richard Medcalf
Let me just slow you down on that. It sounds really interesting. So first thing I heard is you, you divided up your business unit or use you split, you multiply that you divide into two, what was what's the thinking at that point behind that? Right? Why did you take a successful business unit and turn it into two?

Matthias Berlit
Yeah, it's kind of one of the core principles of our former CEO, Adrian Beiler, who was the CEO for 35 years at infor right? Yeah. And his his principal there was to have like a cell division to have smaller neighborhoods, to have autonomous business units, who can really take all the necessary decisions more or less by themselves, because they know the business, they know the customers and so on and well, and in 2010, we were around 130 people in that business unit and I think we were 35 or something, and really specialized on a couple of topics and customer segments and therefore it makes sense. And it's Yeah, it kind of freed us to take our decisions, and therefore we could grow even stronger than.

Richard Medcalf
I think it's a great point. So for people listening, I want to ask you, I challenge you, you know, where in your organization, is there a business unit or a sub business unit? So we say or division or product that's doing so well that you can actually you should actually be saying, let's give these people for decision making autonomy, right, let's turn them into their own p&l or whatever and send them off to do exactly, I think it's a great point.

Matthias Berlit
Yeah, yeah. This is one of the success formulas, I would say from inform. We did that already in the 80s. Yeah, the company was founded in 1969 by Professor Zimmerman, he wanted back then to show that operations research this kind of mathematical optimization can really be used by companies in their daily operations and well, and after working more in project and doing consultancy, work, and so on, we started with Adrian, the CEO, then in the mid 80s, to work in particular application areas. And this was then also a success formula, not to do everything but to concentrate on on certain business segments, and and then we divided these business segments from time to time and today we have nine operational business segments. Right? Yeah and all working really successful and doing their business.

Richard Medcalf
Perfect. So let's fast forward back to this moment where you were appointed as one of four co CEOs. So you all basically the four of you kind of took on from this, I guess this legacy from this 35 year old? Yeah. 35 years of one. Yeah and so you're kind of came in? And what was that? Like? Because that's a pretty unique situation, right? To a follow in the footsteps of somebody who's been the heart and soul of the business and so many, so many ways, for a generation and, and then to find yourself as one of four. What was that experience like?

Matthias Berlit
Let's say, luckily, we had some time, it was already one and a half years before it was actually then the appointment, the official appointment, that the shareholders gave us this task, that the task of coming up with a concept of how we as a group, could manage the company, once once Adrian is not there anymore. So yeah, we actually we used these one and a half years to prepare ourselves, we, we got to know each other because that was I said earlier that we have this autonomous business units and this autonomy sometimes was really strong. So we didn't really knew each other, we haven't worked really together. So of course, we needed to understand ourselves and so on. We were checking a lot of things, how do you think about the future about the vision about the purpose, etc, etc and, yeah, and for example, one of our principles was a kind of continuity program. Now that we wanted to conserve a lot of the good things of inform, obviously, for obvious reasons, like the culture and so on but of course, we also identified some areas where we wanted to set new marks.

Richard Medcalf
Yeah, it's so yes, having the time was was important, right. So you're able to kind of prepare and get to know each other's visions for the company, what I'm hearing. Exactly, which is important and then what was it you think that the shareholders, I guess, saw in you, or in the four of you, right, so were you all pretty much like all, just the strongest operational leaders in the company? Or were? Or was it that one of you was really great at innovation? One of you was really good at strategy and one of you was, you know, were you kind of complimentary? Or was it that it was kind of like, we're looking for the same kind of thing? In all of you?

Matthias Berlit
Yeah. To be honest, I think you should ask the shareholder, it's always difficult to say that about 1/3. I think overall, the four of us has shown that we can manage a business unit and our former boss always said us something like a managing director of that business because you have this kind of autonomy. So we kind of have proven ourselves there already. We always had like, strong financial results, etc, etc and I guess, well, I think that the shareholders, they wanted to, obviously secure the future of the company and preserve the culture, and, well, the whole company as it's working today, because they are really, I think proud of it. It's like they are, yeah, that legacy. I don't know if this negatively correlated, but no, it's their inheritance or how you say, you know, for the future, and maybe they saw this in us that the team of four could really do that. And yes, we have some, some some strength in different areas and, and therefore, we also decided to organize the work in different work areas and for example, I'm responsible for for innovation, for cloud activities, and central marketing, etc. So yes, we have like different footprints, I would say.

Richard Medcalf
Yeah, makes sense. It makes sense and what was the what was the biggest surprise you found moving from that business unit management role to the co-CEO role?

Matthias Berlit
Maybe that there was not really a surprise. Okay. Yeah, because Yeah, maybe it's also because we are here for these 12 years or 20 years or something and we have really grown up here. It was Adrian always who was our boss, so we are working in his in his footprints and so on. No, I don't think that that was really a surprise, which was like completely new.

Richard Medcalf
Yeah, cuz, okay. See, it's really in that continuity, I guess. Right? What it was designed for, right? You've all been in the business 20 years? Are you new to business? Well, and so it makes sense. And so what would your what would your advice be for CEOs or for new CEOs? You know, what have you found as has worked well, for you in these couple years? And what's been difficult?

Matthias Berlit
I think it's always this dilemma between strategy and an operation, that you are distracted for often, then you like, with all these operational stuff, and so on and I mean, then there are security incidents, somewhere, there's flooding around here was there last summer, and so on. So you have, of course, these very important issues. But you need to find the time to work on strategy as well. I think also that we neglected kind of strategy in the past. So we emphasize more on strategy in our team, but also with our complete leadership team, which is like the new the new CEOs, plus the business unit leaders, who are then part of the top leadership team. Yeah. And I think what what helps me to organize these kind of strategic thinking, is to look at kind of transformation metrics, which we got from a consultancy and Cologne, which looks at actually like, working on strategy working on the structure of the company, on the processes, but then also on how leadership is working. You know, what kind of principles do you want, like servant leadership, for example, or more command and control? Then what kind of HR tools do you have at the start? And then what kind of culture do you want? Yeah, where our culture, maybe it's the most difficult thing to change and I think, maybe for new CEO, you have to admit that activities you do simply take even more time, then when you are working for an organization with maybe 100 or 150 people.

Richard Medcalf
That's, that's funny. You said that I was speaking with the CEO, one of my clients literally call before this one an hour ago, he was actually saying, you know, it's like because he's within a complex group structure as well. So yes, you know, he's got a lot of things to manage stakeholders in all directions and he was like, everything does seem to take so much time there's so much cajoling and persuading and getting buy in like, Is this my life? Now, you know, this this doesn't have to take so much time and I think it's so fascinating that you mentioned that just I just picked that up. What we got to in that call was you know, it definitely does take a lot of time and can take a lot of time. But here's an insight that we got two which was sometimes you need to make a request, close the deal. You Know, make an offer, it might not always get accepted by the other person. But sometimes you can say, You know what, I think let's move ahead with this, you know, or are you okay? If on this one, we just go with this for now. And so sometimes you can kind of short circuit some of those decisions or some of those discussions by saying actually, given his relative importance, would you trust me on this or whatever? And interesting to put that offer out there? Because sometimes people go, you know, what, Fine, let's move on. Right, right. Not to deny anything that you just said. But it's just interesting to have this discussion and that was one of the insights that we found was that sometimes, especially when your collaborative leader, you can kind of want to keep collaborating until everybody's on board? But actually, it's okay sometimes to say, Should we just try this and see what happens?

Matthias Berlit
Yeah, exactly. Yeah, I think there are a couple of tricks for these kinds of directives, emails, you know, wherever you can accelerate the decision making process. Yeah. And one is to make the problem actually the problem of somebody else, yes. To get them in the boat. That is also their topic and yeah, perfect.

Richard Medcalf
Perfect. Well, let's move on to our kind of quickfire round of questions and always think it's interesting to find out what some of the influences behind the guests on the show. So what's a favorite quote, that that you live by? Or this influenced you?

Matthias Berlit
Favorite quote, I don't know. Of course, there are lots of great sayings. What I really like is this build, measure, learn. It's not a quote, but it's like a concept from from Eric Ries, I love this book, it really changed my thinking, the lean startup in lots of ways. I think it's not only for startups, it's for many topics and build, measure, learn always, when maybe, maybe not always but in lots of cases, you should you should build something and be even before you build, you should think about what do you expect? And then set a threshold, even if you don't have data available, or something like this, but you have a feeling? Yeah, and put it somewhere and then later, once you measured it, compare the measurement with your expectation and this is this can be so helpful.

Richard Medcalf
Yeah, that's great catch. What about a favorite app? Like what's an app on your phone that you can you know, as your go to pets, and the not everybody uses? But you find particularly relevant?

Matthias Berlit
Not really, I think that the apps I use, most of them are teams and outlook. Pretty boring. I used to work with Trello a lot. Yeah. Now I move to Microsoft Teams and better planner.

Richard Medcalf
Yeah. Okay, fair enough. What about a book? I mean, you've just talked about the lean startup is another book you'd want to mention and that's had a big influence on how you lead?

Matthias Berlit
Yeah, I think the lean startup is great, for sure and I think really, everybody should read it and then I think reinventing organizations from Frederick Laloux is really great as a visual version, actually edition of that book, which is just fantastic. Lots of pictures and then it highlights. Well, it compares a company with an organism and how strong companies can be built, and where people really flourish in these companies and yeah, it's for the good of everything. Everybody, the shareholders, the people who work there and the customers, of course,

Richard Medcalf
Yeah, yeah, we were talking about earlier on, you know, it's easy to have a Smart Company, but having a healthy company, that is another thing and it's what really makes a difference, I think, to great companies and they are organism organisms, right? They're full of people and relationships, which are very organic things and if you don't attend to those things go wrong. On things often do with executive teams is getting to really think about who are all the stakeholders, who are actually you want to be in the room with you, even with industry leaders who wants to be in the room with us right now. whispering in your ear, asking things right and actually looking who those are. Because it's already that is incredibly complicated, right? Most executive teams have threshers because they're representing different stakeholders, very naturally in the room. What about what advice would you give to 20 year old self?

Matthias Berlit
I think I made the right decision to go with a company of a moderate size and not go into a corporation for example. Maybe like 20 years ago, I should have thought more about founding a company.

Richard Medcalf
Right? Yeah. Yeah. It's interesting, isn't it? It's like often when we were young, it feels hard but on the other hand, you don't have that much to lose either. So it can be, it can be more freeing and then the other question I have is, is there an impactful CEO? Who's inspired you Right? Or who inspires you somebody that you've come across in your own career? I asked him if science, many of the best guests on the show come because of referrals, right? People who say, you know, this person is inspires me as a CEO. So I'm wondering, you know, who comes to your mind?

Matthias Berlit
I think it's, it's our former boss, maybe he's not a current CEO. To have Adrian interviewed here would be would be really something.

Richard Medcalf
Yeah, yeah. With a 35 year tenure, I'm sure he's got some great stories to tell. So funny math, yes. No matter how much we've achieved, there's always a next level to get to. So where does informe go from here? As a business? It's obviously achieved a lot but what does it go from here?

Matthias Berlit
Yeah, as I said earlier, we have set up this kind of areas where we want to emphasize new things and one of the things is innovation. So we actually want to be able to have not only, let's say, one business model, as we have today, with these enterprise, IT systems which we deliver but we want to have different business models, so maybe more standard products, more SAS models, etc, etc. So this is one thing, the other thing is to grow internationally, and to help our business units to do so. So just last year, we are we opened an office in Australia, at an office in South America, we have for a couple of years in office in North America, and this year, we are going to start an office, it's in Singapore. So this will be also a challenge for us to grow the company internationally to collaborate on an international level. And we we are we have, I think, a good starting point. Yeah, but this is going to be a challenge. For sure. Yeah.

Richard Medcalf
Yeah. exciting challenges, though, with Miss quoting, as you get to expand the reach of the business. What would you say?

Matthias Berlit
Yeah, it's not that we are not working internationally, you know, we we have customers around the word but I think we can grow that and actually have some have had by more people on site, closer to the customer and this would be the difference. For now. I mean, our our airport division, for example, is like the world leader in airport resource management systems. So every larger airport, you go to, our systems are in place in order to dispatch resources on the ground of the of the airport, and so on and we do that, as I said, with 170, large airports. So it's around the world and in every continent, and so on but most of the time that people go from an awesome external shop, to that customer, in the last two years, not so often learn how to work remotely, which is really great.

Richard Medcalf
Even if it is a strain on the business and it limits you to some degree. So Yeah. Fantastic. Last question. What were you personally need to do to multiply your own impact as the company expands?

Matthias Berlit
Hmm. Yeah, maybe learning to let go at some points. For example, I think I let go with my former business unit, which is now really in the hands of my successor. Yeah. But other things which are now just built up, I think there's today I'm spending lots of time actually operational to get the innovation, the cloud activities, etc. Get started and there to find the right moment to let go and then to to work on new things.

Richard Medcalf
Got it? Yeah. Yeah, it's, you're building things up getting them on a fitting, but they're not being the bottleneck,

Matthias Berlit
Right. And it's so much fun, you know, I love this kind of technology and innovation and so on. So it's going to be also hard to let go.

Richard Medcalf
Yeah. Fantastic. So if people want to find out a bit more about you, or about Inform, how do they do that?

Matthias Berlit
Well, you can drop me an email on matthias.berlit@inform-software.com or simply go to my LinkedIn profile. You can find me under Matthias Berlit and then maybe arson or Inform contact me via LinkedIn would be great.

Richard Medcalf
Perfect. Well, hey, thank you so much for, for the conversation, it's been really fascinating to kind of dive into, you know, the whole philosophy of the company as it's grown and multiplied and kept that independence and autonomy, how it's really lived that out in terms of the co-CEO model and, and you know, how you've kind of been trying to move the company from this one business model into more diverse business models, more markets, and more diverse portfolio. So thank you for sharing some of that with us.

Matthias Berlit
Yeah, we all need our challenges.

Richard Medcalf
Well, thanks once again, and we'll look forward to hearing stories that involve evolve.

Matthias Berlit
Thank you, Richard.

Richard Medcalf
Well, take care.

Matthias Berlit
Thanks.