Alexander Rinke: “Be Intellectually Honest with Yourself.”

People often spend a lot of time worrying about their competitors and space as a whole. It’s natural for humans to be thinking about that, but as a CEO, you’re better served thinking about your customers: What do they need from a vendor? How will they be successful? What are their pain points? Obsessing over […]

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People often spend a lot of time worrying about their competitors and space as a whole. It’s natural for humans to be thinking about that, but as a CEO, you’re better served thinking about your customers: What do they need from a vendor? How will they be successful? What are their pain points? Obsessing over those answers is the key to your success.

As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing About Alexander Rinke. He is co-founder and co-CEO at Celonis, which recently announced another consecutive fiscal year with triple-digit growth. Alexander is an expert in enterprise technology, and in 2015, he was named to the Forbes 30 Under 30 Europe list in science and technology. He is a frequent speaker at leadership conferences, university events and technology events. As an actively involved, early-stage technology investor, he supports other enterprise software companies — such as Testbirds, Rasa, Talentry, timeisltd and Landoop. Before founding Celonis, Alexander studied Mathematics at the Technical University of Munich and École Polytechnique in Paris.

Thank you so much for joining us! Can you tell us the story about what brought you to this specific career path?

When I was studying at the Technical University of Munich, I joined a club that permitted university students to work with local businesses. We started working with a company that was looking to improve IT services and it was clear from the beginning that there was a lack of transparency around how their processes operated. In fact, there was almost no alignment across the company about what the customer experience was really like. We thought that if we could get our hands on the log data in their underlying operations systems — like SAP, ServiceNow or BMC Remedy — instead of asking employees what they thought, then we could rapidly understand what was really happening within the company and know how to improve the processes.

We worked for a couple of weeks analyzing and building a program around this company’s processes and ultimately created an IT service management process. Once the CIO saw the software at work, he suggested that my co-founders and I start a company and offered to be our first client. In 2011, we founded Celonis when I was 22.

Siemens was one of the first clients we landed with that strategy, and other Fortune 500s such as Bayer Pharmaceuticals soon followed. Since then, we have been in hyper-growth mode, doubling our number of employees last year and continuing with a triple-digit growth rate.

Can you share one of the major challenges you encountered when first leading the company? What lesson did you learn from that?

What entrepreneurs are typically good at is coming up with creative solutions to apparent problems and being committed to solving those problems, usually by being hands-on. What some CEOs do though, and where you have to be careful, is assume that being so deeply involved and hands-on is instrumental in solving those problems. I was one of our salespeople at the beginning, and it taught me a lot about what a good sales process looked like. But we weren’t going to be successful nor could we scale if I remained our main salesperson. You have to learn how to create systems that work, independently of you, and to continue to work as you grow in size and complexity.

Of course, engineering yourself out of a system is only successful if you can manage people. Good management is everything from recruiting to leading your team and creating a culture that enables you to grow and improve.

What are some of the factors that you believe led to your eventual success?

First, we attacked a big problem. Process optimization is a huge space because it touches every person at a company. Friction is as painful for your customers as it is for your employees, and it keeps everyone from being as productive as they can be. Being ambitious can be daunting, but it meant that we had room to provide value.

We also always had and have a team that is incredibly passionate about the challenge and opportunity in front of us and our customers. I actually think bootstrapping it, in the beginning, instilled that in us because we knew we needed happy customers in order to pay our bills and grow, which meant that we had to focus all of our energy on our customers. We really listened to what our customers need from a solution, and from us as a solution provider.

What are your “5 Things I Wish Someone Told Me Before I Became CEO”? Please share a story or example for each.

  1. Fight Hard to Hire the Best and Be Smart about Compromise:
    I hire using what I call the three C’s: Character, Commitment, and Capability. Character is about finding people with whom you can build something greater than yourself: You don’t get there by finding people who are great individually because they’re in it for themselves. The second C is commitment. Starting your own company is hard and it’s painful. It’s much harder and much more painful if you’re working with a team that isn’t committed to the collective vision. The third is capability, whether or not they can do the job. The order of the three C’s is purposeful: Never, ever, compromise on character. You also can’t really compromise on commitment. Capability is the C where you can accept compromises — you can teach the right people how to do something, but you can’t teach character and commitment.
  2. Be Customer-Obsessed.
    People often spend a lot of time worrying about their competitors and space as a whole. It’s natural for humans to be thinking about that, but as a CEO, you’re better served thinking about your customers: What do they need from a vendor? How will they be successful? What are their pain points? Obsessing over those answers is the key to your success.
  3. Be Self-Confident Without Being Inflexible.
    Being the CEO of a hyper-growth company, I’m often on the receiving end of a lot of well-meaning advice about how to run a global organization, what the market needs, where there are opportunities, etc. It’s important that you trust your inner compass and that you have conviction. At the same time, you have to have humility and be open. For me, that means believing very firmly in and being guided by principles and goals, my own and for Celonis. I know what we want to achieve and how I want to work with my team to get there, but I’m open to different ways of achieving that.
  4. Be Intellectually Honest with Yourself.
    It’s easy, especially after a big win or gaining early momentum to get distracted and stop looking at where you need to improve. You want to be careful about overlooking what you need to do in order to be successful today, as opposed to working on something that’s ultimately unsustainable. You have to be brutally honest with yourself about what needs improving and where you’re at.
  5. Think About the Leverage You Create through Leadership.
    I think people underestimate just how much value is created when you focus on leadership. When you communicate where the company is going, focus on building the right culture, and establish the right team, you become exponentially influential and you see compounding returns.

What advice would you give to your colleagues to help them to thrive and not “burn out”?

Find something that you’re passionate about and help your colleagues find it too. At Celonis, we take this really seriously: We want our team to be interested in and challenged by what they do, and we want them to find new things in their role that excites them. Being successful in many cases means making sacrifices. And if you make sacrifices for something you don’t love or aren’t passionate about, you will burn out and fail.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

I’ll start with the obvious ones: My parents aren’t tech people at all, quite the contrary. I am still the IT support guy for my mother and her best friends, in fact! But my parents instilled self-confidence in me. They encouraged me to try new things, even if I wasn’t great at them, and also to follow what I was passionate about.

Another influential person was my grandfather. He ran an agricultural wholesale business and I worked there in the summers as I was growing up. Seeing a business up close really demystified and simplified it. It’s very difficult, of course, but it’s easy to look at huge or very successful companies and think, “I could never do that” because it seems fully formed. Working for my grandfather taught me that a business is really just people doing things. It needs customers, it needs something to sell, and it needs a great team.

Other people who’ve been instrumental are our early and current Celonis advisors. Werner Unterhaslberger built a healthcare software company in Bavaria before selling it to Siemens. He gave us instrumental advice in the early days and was a huge inspiration for us. Carsten Thoma founded Hybris, a commerce software company that’s now a part of SAP, following a billion-dollar-plus acquisition. He sits on our board and is a key advisor and mentor to me, along with Alex Ott, another enterprise software veteran, close advisor and Celonis board member.

What are some of the goals you still have and are working to accomplish, both personally and professionally?

Professionally, my goal is Celonis’ goal: Turn processes into extraordinary experiences for everyone. There’s so much friction in business, and it truly hurts everyone. If you think about industries like healthcare, friction in a process like delivering new or repaired equipment can have life-or-death consequences. That’s an extreme example, but we believe because we’ve seen how, that eliminating friction in business processes accelerates human achievement.

Personally, I’m focusing on spending time with my friends and family. That’s an important priority, and especially when you are building a company you need to make sure to invest enough of your time here as well.

What do you hope to leave as your lasting legacy?

I want to turn processes into extraordinary experiences for everyone and unlock human achievement with this team that my co-founders and I have built. We want to build a company that people want to work for and a company where people grow and evolve. We want to be a good citizen in the ecosystem and help reduce waste. For example, we had one customer who, when a part was missing, would deploy a fleet of helicopters to the point of need. We’ve helped uncover the root cause of those missing parts and process inefficiencies so that team can use less resources and drive productivity.

You are a person of great influence. If you could start a movement that would enhance people’s lives in some way, what would it be? You never know what your idea can trigger!

I’d want to help people be successful in a digitally transformed world: There’s an immense opportunity to create wealth and progress via digital transformation. It reminds me of the Steve Jobs quote: “Computers are like a bicycle for our minds.” Digital tools can propel us forward, farther than we could ever go alone. However, we need to put everyone in the position to actually be successful in a digitally transformed world to avoid a situation where just a few benefit from these human achievements.

Part of it is education: We give access to our software and all of our training content to high school students and to universities for free so they can take advantage of it. We’ve released a basic version of the app, Celonis Snap for free so business users can take advantage of basic features. We try to do our part to promote education, and in a digitally transformed world, we want to help as many people as we can to benefit from that.

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