S8E02: Radical transparency & the CEO learning curve, with Thomas Zanzinger (CEO, inriver)

Richard Medcalf
Thomas, great to have you with me today on the show.

Thomas Zanzinger
Richard, nice meeting you and pleasure to be here.

Richard Medcalf
I'm looking forward to this one, I know that you've recently taken on the CEO role, CEO role of inriver and I'm really looking forward to diving in with you to understand about that learning curve, what it's what it's been like, I know that you took on the role right in the middle of the first COVID lockdown, which must be a crazy moment to actually be given the CEO mantle. So this is going to be a fun one. Do now start by telling me what's inriver and you know, how did you come to land? The the CEO role?

Thomas Zanzinger
Absolutely and you're right, I think there are some really interesting angles to the discussion points today. Yeah, but let's first of all, do a brief introduction and stablish InRiver. InRiver is a Swedish based and globally operating software vendor in vivo provides Product Information Management in the software as a service solution and we have companies actually to open their digital front door and bring their products and solutions to their clients by enabling commerce, to our clients, are they either in the manufacturing or retail and consumer goods industry, and most of them you actually will even have at home or use in a personal way. Many of the global leaders now we are around 300 people globally, around 600 clients and we are in a high growth business. That means total business growth annually is around 30%. Maybe myself...

Richard Medcalf
So just to say there's a lot of change, right? I mean, you know, it's not just a you didn't come into a business that was very stable, you came into business where everything is changing quite dramatically year on year.

Thomas Zanzinger
Exactly. So it's a high growth business and also in some way, the market dynamics are changing at the same point of time where the market is developing itself, and we have a real opportunity to shape the market.

Richard Medcalf
Got it.

Thomas Zanzinger
I joined inriver, roughly two years ago, yeah and I'm living right now for the second time outside of Germany, which provides, which is my home country and the thing that provides us an interesting perspective on the previous home market, and gives quite a bit of an openness to many things. My background is mostly in the software industry, I would call myself technologically very aware and interested. I'm really commercially driven. It's the passionate piece of the pie that I'm enjoying pretty much every day was being the CEO and getting that then a commercial and very customer centric spin.

Richard Medcalf
Got it. Interesting. So, so yes, you came from that commercial side and then what was it you think that made you a pick for the CEO role? Right? Because it's, you know, it's a real expansion in responsibilities from perhaps, you know, direct your revenue, top line focus?

Thomas Zanzinger
Yeah, absolutely and I think well, but it definitely helped is I had tried in reverse six months before and was the chief sales officer in the organization and probably what I had managed quite well, it's actually to build even in a short period of time, a decent track record, and also be able to build out really good relationship safety related stockholders, shareholders, and that's very important and whether it's a venture capital finance organization in a strong growth class, and let's say the board has a key role actually then defining who is leading the company going forward and actually it has helped quite a bit.

Richard Medcalf
Yeah, so believe it's really interesting, because I'm sure a lot of people listening actually who might be in that role, right? They might actually be on the in the C suite. And they're wondering about, you know, do they have what it takes, or what might it take? And I think that point about obviously, you need to deliver your results. But there's also relationships to build, especially with the board and shareholders. Is there anything else that you would say would have characterized, you know, maybe made it clear to people that you were not just going to be in the sales role?

Thomas Zanzinger
Yeah. I think it helped us quite a bit, because then I became actually the leader to previous colleagues of mine. Yeah, let's say for example, person leading the services department, the person leading the people department and the finance team, but definitely has helped in order to really learn to roll is to have a broad approach and not just to focus on one single piece, but to cooperate and really collaborate very well with the other departments. There's always an understanding, there's a bigger thing behind when maybe then the core responsibility, and also having the support of the leadership team of the other leaders of the departments probably helped quite a bit in order then to get promoted into the role. So I'm pretty sure the board did consult also, then they find that's a good way to take it forward.

Richard Medcalf
Yeah, that's a great point. I think often when I work with leadership, team management teams often find that people have great functional leaders. But they're not always looking cross functionally right at the gaps between the different departments. I think what you're talking there is that, you know, making sure you're joining the dots and taking responsibility beyond your own function, which, which I guess is is, is key. So, okay, so you took on the CEO role, and you said it was pretty much right where COVID was just kicking in. So you were kind of stuck at home, behind the screen at the time where you would normally be out there meeting people.

Thomas Zanzinger
And at that point of time, I was still living in Munich, in Germany, and in various business, the headquarter of the organization and state of South of Sweden. in Malmo, we do have offices in Amsterdam, and also in Chicago, my meeting actually working out of the Munich home office, not having any possibility, way to meet some people face to face. That really was an interesting thing. So how do you build out and Relations at a much deeper level? How do you get even in much more close contact with the people? Because when you step into that kind of new role, you always forget your specialty. For me, that would be the commercial side. Yeah. But how do I learn fast enough about what's happening on the development side? How to get quickly enough, actually into a product vision? How do I assess, for example, financial structure of the organization and really come up, then maybe with my view on how the company looks like and how it should look like in the future, and at the same point of time, then also bring people in and make them part of the future solution. So also involve them in the thinking not just coming up with an idea, maybe just by myself?

Richard Medcalf
Yeah, tons of great questions, how to how did you do it? And what were your answers to those questions? How would you engage people and learn fast?

Thomas Zanzinger
I think most important is one of my previous bosses always said, You've got two years, you've got one mouth, listen, carefully ask a lot of questions. I think, in one way, it's also a bit about personality, it's really being humble, but really having a genuine interest in the job of the people. And that also, especially in the people itself, and how they can be successful. And as I found also out with my previous colleagues, and they have very different levels of levels of motivation, but ways to be motivated and what really triggers them. So it's very much about getting to know the person really, and then take that as a foundation. Yeah, when I look at my agenda, in hindsight, it was really stacked up quite extensively. So it means when you are in a remote world, there's a lot of ways for you to actively communicate and to drive communication, nothing is going to arrive automatically at myself to be launched, especially in the beginning.

Richard Medcalf
Yeah, so taking the initiative, right on those conversations. And I'm interested what you said about motivation. And what's your experience of how people are motivated? Right? A lot of people ask, you know, this a question that people say, How do I motivate people? And you say it's different? And I totally agree, it is different. But like, do you have like a mental model of these are kind of the areas that might motivate people? And I'm trying to figure out what each and every person is very different.

Thomas Zanzinger
Yeah, I think it's really important to understand what what are the inform what excites them. So it's a lot about getting to know the persons and certain ways how you actually can think, figure out motivation and personality, I think the key topic is really to build out a trusted relationship with the person Yeah. And then also to be there when, when I needed to be there. Some people are highly autonomous and are fully capable of driving a business. For others, it's more important actually, just to throw out some ideas, discuss and debate them and then take them forward. Others say, well, maybe in certain situations might need even very much closer handle and really work much closer together. So I think it's, it's a lot of situated leadership and how you work with people and then also adapted to their specific needs.

Richard Medcalf
Yeah, not okay. personalization. So obviously, you, you come into COVID, and this was the situation, you're going to take initiative, you're having to spend your time listening, talking with people. Well, the other things that you found you had to do or surprises that you found as you were going through this process, things that you weren't quite planning for.

Thomas Zanzinger
Yeah, well, as we as well, high growth company, recruitment and employee retention is a core topic first. And then all striving recruitment in a complete virtual way. Just a few weeks actually ago, when I did meet my global leadership team in Sweden, for the first time after the pandemic, actually met for the very first time, that then VP of sales for North America, yeah, who had hired and actually more than a year ago, and we've only actually had all of the interview process in a virtual world. We only interacted in a virtual world. And now 14 months later, we had the opportunity to meet each other for the very first time. And that was really great to see. I also think what I experienced when you've got the leadership team together and working with an organization it's also in a face to face environment important to communicate and to over communicate in a virtual world. It's even more important to you cannot over communicate enough because people will lose it. We have seen that very clearly, we've refined our strategy last year, and then also heard from the people. So how are we doing with strategy and that did send a very strong signal, communicate over and over again, and really help people to stay on track and actually help them keep the boundary that you're operating in four.

Richard Medcalf
Yeah, one of the things that I often speak with CEOs about is the idea of boring people, right, you're actually almost you know, your your lead your direct reports should be, you know, your leadership team should be bored your message, because if they're getting bored, you might just be getting it through to other people. But if it's always fresh and interesting, then it pre means is completely confusing. couple of layers down, if the agreed and the boring actually resonates, even if it's maybe not the most positive word, but we said, Hey, today, it's really a boring meeting.

Thomas Zanzinger
When we talked about communication, which led to a lot of very different communication mechanisms. So when I joined in river, and we had something like a town hall meeting, and then I saw people actually not joining us, and why don't you join the set, it's not worth the time. And then when digging deeper, in many ways, they said, okay, there's maybe it's always just very positive messages, but we don't actually seem to get to the real topic. And we launched especially Then, during the, during the pandemic situation, a really full transparency program. So the level of information that our teams are actually informed, I'd say has many components actually, of what the board actually is getting to see. So I'm not preparing special slides actually, for internally, people are getting pretty much the same level of information as the board does. And that level of transparency has been really greatly appreciated, because I said, Okay, now we're getting to the real thing, we hear the good stuff, but we also get clarity on the topics that actually need to be improved. In this communication transparency, also has really raised employee engagement to, to really very, very strong level.

Richard Medcalf
Were there any concerns about that? Were you worried about that in some way about giving too much information? Or about things being misunderstood or sensitive subject to money? It's fantastic, right? You know, if you can do one presentation is shared with everywhere, it's got a lot of advantages. But what was the fear or doubt in them?

Thomas Zanzinger
In the beginning, there was in some way, maybe the uncertainty, so what is it if that actually moves them clearly into competition? On the other side, we've got a great team and we are doing our best to hire really, extremely good people and we need to trust them, if we don't trust actually our teams. So what else should we trust? And then I think there's always nothing in life, this without risk. So far, it really has turned out very nicely for us and it's a trajectory that we are definitely going to continue because to turn self to transparency builds trust, and also to the leadership team and it's very important that people really know where to go.

Richard Medcalf
Yeah, what else? Does the transparency give you? I mean, I can understand that it's raised engagement and so forth but why do you think, you know, what's, what's it providing people with? They weren't getting before?

Thomas Zanzinger
I've got really good people, leaders for their respective departments but it's also really important that people understand what is the bigger picture behind and its avoid, and actually to not only work with the teams in from a departmental point of view, as we are a global team with offices in many places, we have a very broad partner network. So people need to be pretty much aware of what's going on without really speaking each and every day to a ton of people. So therefore, the communication enables the teams across the blood actually to run their business in a pretty autonomous and enabled way. It's fast. It's a very big benefit.

Richard Medcalf
Yeah, that's really interesting. I there's often a, there's often a cry for visibility from management down, right? They often don't think about providing it the other way, right? Because often people say, I want to, I want to have all the numbers work off the business and really do so I can manage it all. But I mean, I'm, but you're actually saying Well, yes. But also we need to provide that big picture to everybody, as well.

Thomas Zanzinger
Correct? Yeah. Because only it's really the teams understand what we're up to, they really can do their job. And then we will also enable them maybe to go a longer way than originally foreseen. 

Richard Medcalf
For the class. This has really proven very nicely, you basically democratizing the context, right? And often, the problem is that senior management have context which lower level people don't have. So how are they expected? How do you want them to make decisions? If they don't have the context? They can't, right? Which means that they have to come up to the senior leaders. So yeah, that's fascinating. So is there anything anything else that you found that was a surprise or a work surprisingly well or was surprisingly difficult about this transition?

Thomas Zanzinger
Um, it was a tough one. Yeah. Again, thanks to the pandemic. I think it's probably a unique experience that I will not gather in another way again. I think what you also see and let's say, you see You think things going well, but you also see certain things actually going maybe not expressively? Well, yeah. And the interesting pieces, how long does it actually take you then to assess the situation and take a decision? Now the interesting learning that I took away is, you see things and you often have really an extremely good gut feeling, yeah, that you actually can take some data points on top of that, and actually come to a conclusion. I think one of the things that I've learned also over time is, does that make sense then to go for a dozen more data points? Yeah, because at some point of time, the the assessment is really solidified. And you can actually go and take the decision. Yeah, it's also fine, then to involve other people really take them in for their specific opinion, that you're not just the lonely decision taker, which is sometimes must do our part in invoice inquiries. That is maybe not your core expertise. And for me, that was product and development. But it's really clear that after teaming places I'm heavily relying on other things can go wrong, there are there are ways that ever go wrong. And sometimes it's even accelerating, that other parts of the organization or of the market at the same point of time are moving up. And the level of complexity and the multitude of topics going on at the same point of time was definitely a change compared to a previous job, and the level of attention that it needed. 

Richard Medcalf
Also, how did you manage all that complexity? What was your response to that?

Thomas Zanzinger
Yeah, I think the first response for most is probably all, let's put in the hours. But then you also find out pretty quickly, okay, there's just a limit to the hours at the end of the day. Yeah. And the licensee wanted another life outside of business. So it's, it's also clearly relying on the teams that are built out and letting them do their job. That's probably one of the bigger learnings Yeah, take the hands off, which is difficult. For me, it was very difficult. And I even catch myself sometimes in order where I'm getting too much hands on, instead of letting the teams do their jobs. Because they know it best. I've hired them as two specialists for their respective areas. So they should be able to do the job.

Richard Medcalf
Yeah, and I guess that kind of goes back to that point about the gut feeling. And the data points as well, right? Even if you, even if you can perhaps take the decision is not always the best one for you to be taking it correctly.

Thomas Zanzinger
Because it's always when I take the decision, then it says, okay, yes, Thomas has taken the decision. But it's important also that people are owning certain topics by themselves. And they also need to feel encouraged to take the decision. And even if things go wrong, yeah, without having failures in our decision making, there will be no learning for the organization. Okay, if you do exactly the same error three times in a row anniversary timeframe, it's maybe a different topic, but we must actually have some things going in the wrong direction in order to improve the overall outcome.

Richard Medcalf
Yeah, I like to make the distinction that it's not so much that we celebrate failure, but we celebrate learning, right, and there is no learning without failure. But the point is not celebrating the failure itself is celebrating what are the insights that we have now? integrated as a result of that?

Thomas Zanzinger
Exactly. And it's also good when people can talk about that. Yeah, let's say what would I do differently next time? Yeah. What's my learning? And can I enable that actually to fail faster? Or am I afraid, actually, to take the decision? I know waiting on somebody else. And I think for us as a high performance and really fast growing organization, that's absolutely key that will make the experience pretty quickly.

Richard Medcalf
Thomas, what's the most courageous thing you've had to do in the last year or so? is an extremely good question. 

Thomas Zanzinger
Well, it's, it always goes back into the virtual world. As I mentioned, we are venture capital financed. And as an organization, we are close to profitability. But we do have very aggressive growth plans here we want to build out and are building out our business in North America. And we have opened the UK and Germany during 2021. That means inriver needed a totally different level of funding. I've never done fundraising by myself before. I was well supported, actually, by the board and by good coaching. But we managed to actually in a period of actually less than six weeks to close for him with a significant funding round of over 13 million US dollars that actually then enabled us to execute and our growth opportunities. And if you call it courageous, I don't know. But I definitely can tell you it was a steep learning curve here. It was something that had to happen and it went successfully. Then also in tandem, that said with other people of the leadership team, and that was very encouraging to see.

Richard Medcalf
Yeah, fantastic. So what about what's your top learning tip? Your top tip for a new CEO, right? What What would you What would you tell them to grab hold of and seize and what trap would you suggest that they avoid?

Thomas Zanzinger
Absolutely key is build a great team and do not do any mediocre hires probably anybody let's say who is leading people, and waste recruiting that's one thing for everybody but for people responsibility, make the best hires that you can even if they are more expensive, even if it takes longer, but otherwise Well, let's say in a negative way, pay the price. If you deviate from that, that's probably my number one recommendation. Yeah, just a great people build a great team, and doesn't mean that always the best or the most highly skilled people will form the best team. But you also need to have a very strong view. How are these people working together, and in the inriver, environment, probably formed a fairly complex leadership team structure, because my leadership team actually sits in Chicago, it's in Sweden, it sits in Amsterdam, and also in Munich, in Germany. Yeah, and just got at least five different nations in there. And you can imagine the cultural differences. Yeah, on the other side, it's a huge opportunity, because all of the markets are represented there. It's also a good split between female and male people in the team, which is really great for the dynamics. And that actually helps us then really to drive the business in a very good way. So build a great team. And don't be afraid of diversity, and also maybe in some way complexity. Yeah, fantastic.

Richard Medcalf
And it was something which you know, would say was a bit of a trap, or that you look back at now, it's thinking I would have done that very differently. If I were to do it again.

Thomas Zanzinger
And in some way, I think I would have probably should have looked into some things even faster, and even quicker. Yeah. And again, that goes into the topic, don't be afraid to take a decision when you get the science. Normally, you're not proven wrong. Now, with a limited number of data points, I think you'll get a very good direction. Yeah. The other learning is really, in some way, let go. Let the people do their job. And don't get in by yourself involve too much. Because otherwise, also, your time is limited. You cannot endlessly just be everywhere. Recognize and trust actually the people, yeah. The other topic we talked about that one was the communication piece, and was trying different ways of communicating with the teams here. And while I was writing blogs, so we have the townhall meetings that really work very well and are very engaged. I've also changed and adopted communication style to video locks of blocks that actually go out to the teams, and people are pretty receptive to that. And we all have lives in some way a mobile phone here that you can take, it's an easy thing doesn't need to be complicated. It's continuous.

Richard Medcalf
Yeah, in fact, I think when the more spontaneous, they're more impactful, right? Because people get to connect, rather than when it's to corporate video, and you know, too polished, right? Actually, it's not as authentic. So it's been great conversation. Thank you for sharing these insights. I'm really curious as to what's your next level, right? As a business, I've heard that you know, you're expanding into new markets, you're building out, you know, you're writing this growth curve. And what's your own growth going to be as a CEO? Where do you see that, you know, that edge that that opportunity for you?

Thomas Zanzinger
But probably better than this year to answer a question expert in my team, because they probably recognize maybe some of the edges even more, but I'll give it a try. For endeavor, definitely, we'll continue our growth class. And we'll even go further to accelerate that growth. Because we see a huge market opportunity. Ecommerce is very strongly thriving, and we provide a foundational technology which is really good and gets a lot of interest in the market. That means geographic extension will continue to be there. But it's also about redefining our set in the industry and that means the value chain that we are providing to our customers that we extended even more actually, to the actual sell where we actually have customers and really to make analysis space the right decisions to what is the next best action to take in order to increase their success. For me, it's so awesome, we we have an opportunity to reshape the industry in some way. And there are not many opportunities I think in life that you can have it was one of the reasons why I joined I will focus I will always stay very closely connected to the commercial part of the business because it's truly where my heart is. And I will concentrate stronger on the corporate development piece. Yes. How do we really set up the organization? How do we make it failure proof and that we actually can avoid failures and really can execute even better?

Richard Medcalf
So yeah, so is this using stretch there is really about leaning more into the corporate development perhaps rather than the comfort zone and the commercial but while still staying involved, right with customers and, and the market?

Thomas Zanzinger
Yeah, absolutely because I find and we see from our clients and partners and prospects that they really appreciate if the leadership team is very involved, you're not detergency, Okay? We need to understand what drives our customers because that's the only way how they will continue to use our software as a service because the customers could also decide just to turn it off and use something else that's the beauty or maybe the downside of running a software as a service business. Yeah.

Richard Medcalf
Fantastic. Well, hey, thank you, Thomas for sharing these these insights. You know, I think I've loved this. These points right points around decision making around transparency. You know around just yeah deciding when you got to move fast and act fast and when you also have to delegate and lead other teams you know the team's work it through and take ownership themselves so I think needs to be some great distinctions if people want to find out more about inriver or get in touch with you How should they do that?

Thomas Zanzinger
So first of all they can approach me at thomas.zanzinger@inriver.com for be a challenging one. Also could go Richard via you, we can easily found on the website, I'm on LinkedIn, and let's say please reach out and make the contact.

Richard Medcalf
Perfect. Well, once again, thanks a lot, Thomas and I look forward to continuing the conversation.

Thomas Zanzinger
It's my pleasure. Thanks for having me today.

Richard Medcalf
Goodbye.