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ESMT Case Study

IN
SP
EC

Gisbert Rühl: Leading digital

TI

transformation at Klöckner & Co

O
N
C

Konstantin Korotov
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Norbert Sack
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Gisbert Rühl, CEO of Klöckner & Co, a global leader in producer-independent steel and metal distribution,
O

adjusted his impeccably knotted red tie as he was treading the steps leading to the office of kloeckner.i, a
N

digital innovation spin-off created to experiment with digital opportunities in a very traditional company. The
LY

office Rühl was visiting, almost on all fronts the opposite of the Klöckner’s representative headquarters in
.

Duisburg, was located in an unremarkable former post office building recently converted into a startup space
N

in a trendy part of Berlin, quickly developing into the ‘cool’ startup capital of Europe. As Rühl was progressing
O

up the stairs, a thought ran through his mind: most people would probably expect a CEO of a company that is
T

trying to embrace digital transformation opportunities to wear a T-shirt and torn jeans nowadays, or at least
FO

a trendy jacket and fashionable sneakers, recently informally acknowledged by many as new ‘uniform’ of
Daimler’s CEO Dietmar Zetsche. As he was entering the office space with the unavoidable colorful stools,
R

beanbags, and table crates, Rühl saw his reflection in the glass doors and reconfirmed to himself: “I simply
C

feel comfortable wearing a tie. This is me. My people know me like that.”
LA
SS

Klöckner & Co
R

In 2017, Klöckner & Co (Xetra, KCO) served 120,000 customers from its 170 locations in 13 companies,
O

resulting in shipment of 6.125 million tons of steel and metal products, with sales achieving €6.292 billion.1
O
M
U

This case study was prepared by Konstantin Korotov and Norbert Sack of ESMT Berlin. Sole responsibility for the content
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rests with the authors. It is intended to be used as the basis for class discussion rather than to illustrate either effective or
ineffective handling of a management situation.
>

Copyright 2019 by ESMT European School of Management and Technology GmbH, Berlin, Germany, https://esmt.berlin/.
ESMT cases are distributed through Harvard Business Publishing, http://hbsp.harvard.edu, The Case Centre,
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or
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permission of ESMT Berlin.
 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co

Klöckner & Co was established in 1906 in Duisburg, Germany, by Peter Klöckner, an established steel industry
executive and merchant. The rise of the German steel industry at the beginning of the 20th century created
great opportunities for manufacturers and traders. As Klöckner’s merchant operations also had significant
factory capacities behind them, the business was able to offer a growing range of products to customers: from
raw iron and scrap to semi-finished and finished goods.
IN

Through the years, the company has seen its ups and downs, somehow managing to bounce back after each
SP

negative development, although in a somewhat altered form. Klöckner & Co was among the pioneers of
EC

international steel trade, selling steel to European, Latin American, and Asian customers. Among the
somewhat unusual clients was, for example, the Soviet Union, which in the early 1930s experienced an
TI

unprecedented industrialization. The company profited during the armament race during the Nazi’s ascent to
O

power, although eventually control of the Klöckner’s steel empire was taken over by the regime. After World
N

War II, the Allies subjected Klöckner to decartelization, in essence cutting the ties between production and
distribution parts of the company. While for some time benefiting from the existing legacy connections with
C

former manufacturing parts of the steel industry behemoth, Klöckner & Co eventually developed into an
O

independent steel and metal distributor. With subsequent openings of steel service centers that were
PY

designed to provide intermediary services between downstream processors and producers, for example
sawing, paring, cutting, burning, bending, and other forms of steel pre-processing, Klöckner & Co evolved
O

from a service-oriented steel merchant into a full-service provider for customers in many industries and
N

countries looking for a variety of steel products.

LY

After a series of changes in ownership, some resulting from speculative mistakes or owner’s fraud, Klöckner
. N

& Co launched an IPO in June 2006, on its 100th anniversary. At the time of writing this case, about 70 percent
O

of shares were held by institutional investors, primarily from Germany and USA, and about 30 percent were
T

held by private individuals.

FO

After the IPO, Klöckner & Co embarked on an acquisition spree. Over 25 companies were acquired during
2006–2011. International expansion included, among other initiatives, opening of the first full service steel
R

center in Changshu, China. However, the shrinking demand for steel in Europe led to Klöckner & Co launching
C

a comprehensive restructuring program in 2011, involving closure or sale of 70 locations and eliminating 2,200
LA

jobs. At the end of 2013, CEO Gisbert Rühl announced completion of the restructuring program.
SS

Gisbert Rühl
R
O

Born in 1959 in Unna, Westphalia, Germany, Gisbert studied industrial engineering at the University of
O

Hamburg, which he finished in 1987.

M

In the first years of his career, Gisbert Rühl worked both as a consultant and in operative positions. He started
U

his professional career at the management consulting firm Roland Berger, focusing on projects in the area of
SE

strategic planning. Afterwards he took on operative roles with Lion Gesellschaft für Systementwicklung and
Matuschka Capital GmbH, and became Head Finance at Coutinho, Caro & Co, where he had his first contact
>

with the steel trade. In 1993 he moved to RÜTGERS Automotive, and two years later he was appointed a board
position with RÜTGERS, which at that time belonged to RAG AG. In 1999, he switched to Babcock Borsig AG,

2
 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1

where he again was a board member. In 2002, Babcock Borsig became insolvent, and Gisbert Rühl returned
to Roland Berger as partner.

In 2005, Gisbert Rühl was offered the position as CFO at Klöckner & Co. Four years later, he additionally
became Chairman of the Management Board and CEO. From 2013 onward, he focused on his role as CEO. He
IN

serves on advisory boards such as that of RWE Power AG.

SP

Gisbert Rühl is married and has three children.

EC

Christian Pokropp, member of the board of kloeckner.i, describes Rühl as someone who gives direct feedback,
tells you immediately if he does not like something, and makes quick decisions.
TI
O

This behavior is something he learned early on in his life. In an interview, he said:

N

“In my mid thirties as an ambitious young manager at RÜTGERS I never held back with my opinion.
C

For instance, I wrote a memorandum to a board member who had a very different opinion on a
O

specific acquisition project, that he obviously does not understand anything when it comes to
takeovers. This board member had the greatness to explain to me that such memos usually lead to
PY

me being fired, or at least to an end of the career. However, as he thought there was potential in
me he called me to give me some very good advice. He encouraged me to continue to openly
O

express my opinion, independently of hierarchy. At the same time, I was supposed to pay attention
N

to not criticize somebody too harshly, or to even belittle them.”2

LY
.

Looking at the future of steel and metal distribution at Klöckner &

N

Co
O
T

With constant fluctuations in the demand for steel and metal products, Gisbert Rühl’s headache was figuring
FO

out what the future of the company should look like and how to transform the organization to be ready for
that future. In one interview, he said:
R

“The business model in steel distribution is very much based on earning margins, also making
C

margins through speculations. That was very much the case in the past, especially when steel prices
LA

went up. The more inventory you had, the more inefficient you were, the better your results were.
That was especially the case between 2004 and 2008, and then again between 2010 and 2011.”3
SS

Rühl was quite certain that the overcapacity, most pronounced in China, but spread across the world, and the
R

resulting oversupply of steel would continue to affect the industry, and that the old business models didn’t
O

make sense any longer. Rühl thus explained the drive for change in “Inside”, the internal publication of
O

Klöckner & Co:

M

“The environment in which Klöckner & Co operates has changed and will continue to do so. Earning
U

high margins on steel distribution is history. Global overcapacity and volatile market prices have
SE

made competition fierce. There was only one conclusion we could draw: carrying on as before
would be failing to respond to the challenges Klöckner & Co faced – and indeed still faces today.”4
>

Under Rühl’s leadership, Klöckner & Co formulated and visualized the premises for the future of steel and
metal trading industry change (Exhibit 1).

3
 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co

Rühl was convinced that the traditional linear steel supply was inefficient due to ineffective information
collection and processing and slow data exchange on available inventory and lead times, leaving the suppliers
and customers dissatisfied due to long delivery times, mistakes in delivery, and high levels of inventory. As a
forward-looking solution, Rühl put high hopes on the potential of digitalization:
IN

“Because in future, digitalization will ensure that everything will be interlinked, opening the door
to entirely new business models and closing it on old ones. The networked world will not only allow
SP

for any number of new connections, but data will also play an increasingly important role. Data
analysis will be conducted by algorithms rather than conventional methods. This means artificial
EC

intelligence will increasingly come to the fore. The dominant digital business model is the platform.
Five out of ten of the world’s most valuable companies – Google’s parent Alphabet, Alibaba,
TI

Amazon, Facebook and Microsoft – were built on platform-based business models. Increasingly,
O

business-to-business (B2B) commerce will also be conducted via platforms. This represents a huge
opportunity for those who get on the bandwagon early.”5
N

With the inspiration about the future of the company coming to Rühl from his observation of online platforms
C

that bring together suppliers and customers, it wasn’t long before he asked if a similar approach could also
O

work at a rather traditional company trading steel and metal. Moreover, could it go beyond the suppliers and
PY

Klöckner & Co as their distributor to include other distributors as well? Could it even go beyond steel and
metal?
O
N

Klöckner chose an approach that would simultaneously build and reinforce its own vertical sales platforms
LY

based on the initial experience with its own online shop for steel and metal products (e.g.
https://www.kloeckner-i.com/en/tools/onlineshop/) and develop an industry platform open to multiple
. N

players. XOM Materials (https://xom-materials.com/marketplace/en/) was envisaged to become an

O

independent, fast, and reliable digital platform for steel, metals, and later, plastics. The mission of the platform
T

was announced “to facilitate the order process by connecting vendors and buyers in order to give you more
FO

time for the important aspects of your business”, by providing organizations that join it an easy process of
ordering from their suppliers, comparing prices, and reviewing their orders. 6 The idea was visualized by
R

Klöckner & Co in Exhibit 2. In addition to the vertical platform, Klöckner envisaged the complementary power
of horizontal platforms (Exhibit 3).
C
LA

The proposed combination of industry-wide, proprietary and cross-industry horizontal platforms would allow
SS

the serving of a full spectrum of customer requirements. The vertical platform would offer customers access
to a full range of products and generalized steel services with full price transparency. Primarily, it would serve
R

the needs of bulk commodity buyers who are often characterized by price sensitivity. Klöckner’s own sales
O

channel, including its own digital stores, would serve the needs of the customers who turn to Klöckner for
O

specific needs and services, and occasional low volume buyers of standard products might get their needs
M

satisfied through cross-industry channels (Exhibit 4).

U
SE

kloeckner.i: Digital hub of Klöckner & Co

>

The development and implementation of ideas about the future of steel and metal distribution was an
extension of the ongoing efforts to digitalize Klöckner itself. Since 2014, the company has been heavily

4
 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1

investing in building its online sales channels, contract management, integration with ERP systems, etc. Like
many other large companies, Klöckner & Co created its own digital hub - kloeckner.i (www.kloeckner-i.com) –
a separate business unit with physical location in Berlin. With just two employees based in a co-working space
in 2014, the digital hub grew to over eighty people by 2018. Klöckner & Co invested over €40 million into
kloeckner.i by the middle of 2018. The digital hub was envisaged to be “far enough from Klöckner to act
IN

independently, yet close enough to leverage expertise as well as access to customers and suppliers.” An
SP

internal company presentation visualized the relationships between the traditional businesses of Klöckner &
Co and its digital hub, kloeckner.i in the manner shown on Exhibit 5.
EC

The idea of setting up kloeckner.i came to Rühl after the initial unsuccessful attempt to create an innovation
TI

group within the existing organizational structures of Klöckner & Co. The task of the original group, moderated
O

by a university professor, was to develop ideas for innovation quickly. Rühl recalls:
N

“We struggled to change our ingrained mindsets. There were several naysayers ready to
C

immediately shoot down any new idea raised in our internal innovations group. This was particularly
O

the case for approaches that challenged the status quo. The general attitude was that “steel
distribution does not work like that”, “that won’t work for us”, and so on. We recognized that we
PY

needed to break away from our established structures. That’s why we formed kloeckner.i in
Berlin.”7
O

Like many other traditional companies looking for ways to innovate, Klöckner & Co hoped to build a ‘hotbed
N

of change’8, functioning in a startup fashion and staffed by Digital Natives. The expectation was that these
LY

new people would bring fresh perspectives and new skills into the company.
. N

Observing the experiences of other traditional German companies who also created digital subsidiaries in
O

trendy Berlin, many of which seemed to be almost completely detached from the core businesses, Rühl
T

became particularly concerned about ensuring the connection of the digital branch with the rest of the
FO

organization. One of the ways to ensure the necessary connections was the Digital Experience Program at
Klöckner & Co, where sales professionals could spend one or two months at kloeckner.i on digital assignments.
R

The idea behind this program was to support learning of the digital processes, to increase information
exchange, enhance understanding of the platforms developed, and, importantly, to transfer industry-specific
C
LA

knowledge of metals to the digitalization experts.

SS

One of the intangible expected outcomes was also transparency about the activities of kloeckner.i. Rühl,
among other things, was very proud that the company social partner, Klöckner’s Workers’ Council, holds its
R

meeting once a year on the premises of the digital hub.

O
O
M

Digitalization and cultural change

U

The early setbacks with the establishment of the internal innovation group made it clear that putting the
SE

company on the course to digitalization would involve a significant amount of work on the human side of the
organization. Angelika Kambeck, the Head of Group HR at Klöckner & Co, reflecting on the challenge of cultural
>

change in the organization, underscored the duality of the challenge faced by the company: on the one hand,

5
 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co

changing the way it deals with the commercial side of business – on the other, changing the way the
organization works internally. Rühl said:

“During the course of our digital journey, we have learned that a digitalization strategy cannot succeed without a
change in culture.”9
IN

Thus, cultural change became a part of the visual representation of the digital transformation journey at
SP

Klöckner (Exhibit 6).

EC

Rühl quickly realized that when one starts disruptive innovation, one of the most urgent things is to figure out
how to reach and stay connected with all the people working in a highly decentralized organization such as
TI

Klöckner. With the introduction of the new strategy and growing excitement of the top leadership about the
O

potential of digital platforms, it was necessary to communicate that excitement to the rest of the company,
N

and at the same time manage anxiety associated with the change process. Rühl was asking himself the same
C

questions many CEOs continue to struggle with:

O

“How to make sure that when I say something it doesn’t get reinterpreted on the way to the
PY

recipients of the message? How to make sure that the message doesn’t get changed as it is passed
on through the layers in the organization?”
O

The idea of changing the channels used for communication came up by chance, as the company was
N

introducing the new Microsoft Office 365 suite. The head of IT said that the company could have an ‘internal
LY

Facebook’ called Yammer. Yammer (www.yammer.com) is a Microsoft social networking service for use within
.

organizations, access to which is determined by the internet domain of the user and requires an approved
N

email address. What got Rühl excited was the potential to reach many people directly. He was ready to give it
O

a try.
T

It became clear to Rühl that for people to start using Yammer and, more fundamentally, change the way they
FO

communicate in the organization, the CEO had to be an active user himself. Rühl commented:
R

“When Yammer was introduced to the managers, many of them couldn’t imagine what to do with
C

it. They were literally asking: “What should I do with it?” My answer was: “Look, guys, for me it’s
LA

also new. All I know is that I am using it.” By now, we have five thousand users on Yammer. Now I
can reach all of the white-collar and many blue-collar people.”
SS

While the technology was there, as was the willingness of the CEO to embrace it, more fundamental change
in the principles of communication within the organization was required. The ability to reach out to the
R

majority in the organization allowed eliminating the intermediaries in the process of information transmission
O

and the distortions caused by inevitable noise in the long chain of passing on data. Moreover, the feedback
O

loop was opened, allowing the employees to reach out to the CEO instantaneously. The opportunity also
M

demanded change in typical behaviors that no longer suited the new model. Rühl explained:
U
SE

“Communication on Yammer is different from other, ‘normal’, types of communication. Here is the
CEO’s challenge. When something goes wrong, you used to ask, “What happened? Who is at fault?”
>

You cannot ask that on Yammer. Now people can put information on Yammer on things that go
wrong, and that is different from what happened in the past. If I, as a CEO, reacted in a traditional
way, the management below the top level would not allow such messages to appear on the internal

6
 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1

social media. Now when there is a problem, it is possible to ask, “Who knows how to solve the client
issue?” As a CEO, you now have to pose a question, “What can we do?” Of course, in the beginning,
I had to give people a call, explain that mistakes are ok, and that so is talking about them and putting
them on the internal social media.”

Rühl stopped the typical communication distribution for the three top management levels in the organization.
IN

Strategic discussions and distribution of decisions now happen only through Yammer. As an example of a
SP

typical business related exchange on Yammer, Rühl recalled a debate about the choice between volume and
margin for guiding managerial choices. Similarly, people inside the company were no longer certain about the
EC

focus of their efforts: should it be experiments and trials associated with the digitalization, or concentrated
effort to reach the expected margin targets? In Rühl’s view, it clearly had to be both, and not either-or. Still,
TI

Rühl noticed some managers would take the excuse of the natural need to reach margins as a way to escape
O

digital transformation efforts.

N

Beyond topics of company direction or immediate business issues, Yammer is also a platform for discussion of
C

other topics vital to organizational life, even if they may be difficult or emotionally charged. Once there was
O

an employee suicide case in France, and trade union representatives raised issues of working conditions and
PY

their potential role in the tragedy. Rühl responded via Yammer with a commitment to investigate the issue.
Another example of serious conversations about organizational life was witnessed with the rise of the global
O

#MeToo movement – a drive to fight sexual violence and related abuse of power. The examples of women
N

worldwide raising their voice against mistreatment prompted raising questions of inclusivity within the
LY

organization, for example, instances of use of hostile language by a male employee towards a female
colleague. The topic attracted a lot of commentaries from various parts of the organization. With 5,000 people
. N

on Yammer at the time of writing this case, over 400 specialized groups have been in existence for
O

communication about topics of interest to specific subsets of employees. Rühl said:

T

“When people address me specifically on Yammer, I answer them. Every morning I go to the general
FO

company group on Yammer, and spend about 15-20 minutes to see what discussions are taking
place. If I have to say something, I post it immediately.”
R

As communication via Yammer is not subject to any particular set of rules, and as people feel free to raise all
C

sorts of topics there. Rühl believed trust within the organization to be critically important so that discussions
LA

remain on the internal social media platform and are not leaked to the public domain or mass media.
SS

Communicating with the whole organization on Yammer makes it important for Rühl and other people to
remember that their actions, words, and even emotions become immediately noticeable by the rest of the
R

company. Rühl recalled:

O

“I was once very angry about sales people in Germany. I wrote an angry post. I then visited every
O

branch to see what was going on, and I realized that I had been wrong. I wrote a post saying I had
M

been wrong. I am still respected.”

U

Angelika Kambeck, the Head of Group HR, noticed that the change in communication endorsed and actively
SE

utilized by Rühl was a product of a deeper transformation of the CEO. She observed:
>

“He comes from the old economy. It is a very hierarchical world with rigid corporate behaviors. At
some point, he saw that the old approach wouldn’t work anymore. Four years ago, he went to

7
 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co

Silicon Valley to learn. Now he is someone who drives change mercilessly as a visionary, and who
also goes deep inside what is happening in the organization”.

Dealing with the digitalization anxiety

IN

Rühl never underestimated the need to explain to people the necessity of change: “You need to tell people
SP

that things are changing, but you need to give them future, otherwise they will have fear.” And, indeed people
had fears. Rühl recalls:
EC

“The sales guys feared that they would lose their jobs. And, on the clients’ side, purchasing guys
also could fear that their jobs would be gone. In reality, we might need to get more sales guys on
TI

board in order to gain more customers. Most of our customers are not coming to us through Google,
O

but through human acquisition efforts. You need to engage in acquisition efforts constantly.”
N

Rühl realized that one of the common fears about digitalization was potential redundancy of jobs. He
C

addressed this fear publicly:

O
PY

“Digitalization increases efficiency in many areas, which means that we will need fewer staff
members to perform certain tasks going forward. At the same time, new jobs will be created. Let
me say this very clearly: it is a widespread misconception that employees who advance digitalization
O

are helping to make themselves redundant. I have a completely different perspective. By working
N

with us, employees are securing their future careers in two respects. Firstly, by strengthening the
LY

company’s competitive position. Secondly, they are gaining experience in digitalization that will
make them more attractive candidates on the job market later.”10
. N

Angelika Kambeck thus explained the HR approach towards digitalization anxiety: “We are trying to say that
O

being afraid is ok and normal, but it is about not succumbing to fear and being paralyzed by it.” There was a
T

need to remind people that they could not be passive bystanders in the process of change, and that effort was
FO

required from their side. For example, the company launched Digital Academy, a major educational initiative
offering employees a wide variety of courses to equip them with the skills required for the way of working.
R

Surprisingly for Rühl, the interest shown by employees in taking new learning opportunities was below his
initial expectations. What was expected to be a fear-reducing mechanism was not working according to
C
LA

expectations. Rühl was very direct in expressing his position on the role people have to take in the
transformation process:
SS

“Our Digital Academy is a good example. While everyone is entitled to make unlimited use of the
R

courses to further their digital education during office hours, individuals actually need to take up
O

that offer. Although we have recorded a couple of hundred registrations, I cannot understand why
more have not grabbed the opportunity. So let me say unambiguously once more: everyone who
O

wants to make this transformation work is assured a place with us. Those, however, who believe
M

we are better doing things the old way don’t have a future with us.”11
U

After that statement, the number of enrollments grew considerably. Just six months after Rühl addressed the
SE

topic, about one thousand people, or roughly 20-25% of the white-collar workforce of the company, have
taken digital academy courses. Rühl noticed that whenever he communicated about the courses offered by
>

the Digital Academy, people reacted positively and signed up for the offerings.

8
 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1

A traditional organization with German roots normally prides itself on perfection and high quality standards.
However, the digital transformation, uncharted territory by definition, brings with it a potential for errors. A
major cultural shift for the organization was the introduction of tolerance for mistakes. A cultural artefact
supporting the tolerance for mistakes in the organization was a series of Fuck-up Nights – events where
mistakes are shared and celebrated. The first one of those took place in a loft in Düsseldorf, outside of the
IN

office. Participants and invited external guests shared their business mistakes and tried to generate learning
SP

outcomes. Christian Pokropp, member of the board of kloeckner.i, remembered that Rühl shared his own
mistake of allowing one of the failing digital shop projects to run for too long.12 Angelika Kambeck noticed:
EC

“Gisbert Rühl means it seriously! He really wants an error tolerance culture. And he pulls this through - even
when things get difficult.”
TI
O

In speaking about digital transformation at Klöckner & Co, Rühl always emphasized the need to support the
N

customer in embracing digital opportunities. While significant effort was required to explain to the employees
that customers decide where and how to order steel and steel products, it became clear to Rühl that he
C

needed to spend a lot of time and energy on talking with the customers and explaining to them the changes
O

taking place in the organization or dealing with their concerns related to new ways of ordering. For example,
PY

some of the clients found it confusing that Klöckner offered products through both a proprietary platform,
and an industry-wide one.
O
N
LY

On lessons learned in the process of digital transformation

.

Rühl acknowledged that there was no big theory behind the digital transformation course of action at Klöckner
N

& Co. One of the lessons learned was that too much discussion may be a hindrance. Mistakes, according to
O

Rühl, are inevitable, and when they happen, it is important to keep moving on. It also became clear to Rühl
T

that he would need to be personally involved in case of unexpected developments. Rühl believed that the
FO

approach taken at Klöckner was different from how large companies embrace digital transformation:
R

“Compared to how it is done in large organizations, it all started as a Minimal Viable Product
experiment. We always start with small things. We do not have a big central Digital Initiative Office.
C

Initiatives are organized by various individuals. We always start small, in a lean startup type
LA

approach. This is along the “think big, start small” approach.”

SS

While it was clear to Rühl from the very beginning that digital transformation would be a difficult process, the
surprise came about the difficulty of convincing people. It also became clear that there would be some
R

individuals who would not embrace the change. Still, Angelika Kambeck was very excited to see that the fear
O

of having change get stuck in “die Lehmschicht” – a German cliché description of change-resistant middle
O

management – didn’t materialize.

M

Rühl also realized that while it was imperative to have an innovation hub as a separate entity from the rest of
U

the organization, eventually he would need to bring it in close interaction with the rest of the organization.
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Rühl noticed that many large companies that opened startup-like organizations were not able to reap the
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benefits of innovation due to a large disconnect between the innovation center and the rest of the business.

When it comes to the role of the CEO, Rühl said:

9
 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co

“Instead of acting in a top-down fashion, I am now trying much more to explain why we have to do
something. But I still make sure that decisions are made. I still make the shots, but I reflect more on
what comes from the people. The main rule of the game: people feel that I listen to them, and they
know why I am doing what I am doing.”

Rühl, known for his quick decision making and direct feedback, had to learn, however, that he should be aware
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of people’s wish to get their issues resolved quickly by addressing him directly, which had become easy with
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the use of Yammer. He realized that he needed to push back when people came to him asking for a choice of
souvenir designs for one of the company meeting.
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A reporter writing about digital transformation at Klöckner noticed that “It does not work without Rühl, his
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name runs like a red thread through our visit and all conversations.”13 Rühl seemed to understand the
importance of his presence, physical or virtual, in the process of digitalization:
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“I have been long in the company. I have lived through two crises with the organization. People
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believe that when I am there, they are safe. And the supervisory board believes that I am not doing
crazy things.”
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Leaving the kloeckner.i office late in the evening, Rühl once again caught a glimpse of his reflection in the glass
doors. He automatically fixed the knot of the tie. At this moment he thought: “I should keep the tie. If I ditch
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the tie, put on jeans, people would get scared. The tie should stay.
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 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1

Gisbert Rühl, bio

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Source: Klöckner & Co, Communications

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Born in 1959 in Unna, Westphalia, Germany, Rühl studied industrial engineering at the University of Hamburg,
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which he finished in 1987.

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In the first years of his career, Gisbert Rühl worked both as a consultant and in operative positions. He started
his professional career at the management consulting firm Roland Berger, focusing on projects in the area of
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strategic planning. Afterwards he took on operative roles with Lion Gesellschaft für Systementwicklung and
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Matuschka Capital GmbH, and became Head Finance at Coutinho, Caro & Co where he had his first contact
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with the steel trade. In 1993 he moved to RÜTGERS Automotive, and two years later he was appointed a board
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position with RÜTGERS, which at that time belonged to RAG AG. In 1999, he switched to Babcock Borsig AG,
FO

where he again was board member. Inn 2002 Babcock Borsig became insolvent, and Gisbert Rühl returned to
Roland Berger as partner.
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C

In 2005, Gisbert Rühl was offered the position as CFO at Klöckner & Co. Four years later, he additionally
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became Chairman of the Management Board and CEO. From 2013 onward, he focused on his role as CEO. He
serves on advisory boards such as that of RWE Power AG.
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Gisbert Rühl is married and has three children.

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ESMT–319–0183–1
Exhibits

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Exhibit 1: Premises for the future of steel and metal trading industry change

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N
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Gisbert Rühl: Leading digital transformation at Klöckner & Co

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to exploit by digital

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Source: Internal document of Klöckner & Co. “Leading the digital transformation of metal distribution.” April 2018. https://www.kloeckner-i.com/wp-
content/uploads/2018/04/Kloeckner_Co_Digitalization_April-2018.pdf (accessed August 15, 2018).

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Exhibit 2: The future steel supply facilitated by vertical platforms

Gisbert Rühl: Leading digital transformation at Klöckner & Co

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ESMT–319–0183–1
Source: Klöckner & Co. “Leading the Digital Transformation of Metal Distribution.” Summer 2018. https://www.kloeckner-i.com/wp-content/uploads/2

R
018/08/Kloeckner_Co_Digitalization_Summer_2018.pdf (accessed August 17, 2018).

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 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co
>
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Exhibit 3: The future steel supply complemented by horizontal platforms
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Source: Ibid.
14
 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1
>
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Each sales channel fulfills different customer requirements through cross-industry channels

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Source: Ibid.
Exhibit 4:
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 IN
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Exhibit 5: kloeckner.i as separate business unit to maximize speed but integrated approach to leverage existing assets and capabilities
16

EC

ESMT–319–0183–1
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Gisbert Rühl: Leading digital transformation at Klöckner & Co

. N
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Source: Ibid.

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 Gisbert Rühl: Leading digital transformation at Klöckner & Co ESMT–319–0183–1
>
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kloeckner.i digital strategy

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Source: Klöckner & Co, Communications

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Exhibit 6:
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 ESMT–319–0183–1 Gisbert Rühl: Leading digital transformation at Klöckner & Co

Endnotes
1
www.kloeckner.com (accessed August 15, 2018).
2
Arnold, F. 2014. Der beste Rat, den ich je bekam. Lernen von Denkern und Machern. München: Carl Hanser Verlag.
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3
Kirkland, R. 2016. “How a steel company embraced digital disruption.” McKinsey Quarterly.
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https://www.mckinsey.com/industries/metals-and-mining/our-insights/how-a-steel-company-embraced-digital-
disruption (accessed January 8, 2018).
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4
Klöckner & Co. 2017. Inside, December, 2017, p. 4
5
Klöckner & Co. 2017. Inside, December, 2017, p. 5
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6
https://xom-materials.com/marketplace/en/ (accessed August 15, 2018).
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7
Swisscom. 2018. “Digitization in conservative structures. Interview with Gisbert Rühl.”
https://www.swisscom.ch/en/business/enterprise/themen/digital-business/digitalisierung-im-stahlhandel.html
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(accessed August 17, 2018).

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8
Ibid.
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9
Klöckner & Co. 2017. Inside, December, 2017, p. 4
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10
Klöckner & Co. 2017. Inside, December, 2017, p. 5
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Ibid.
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12
Funk, K. 2017. “Von Digi Days bis Fuck-up Nights. Wie Stahlhändler Klöckner den Cultural Change stemmt.” Computer
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Woche. https://www.computerwoche.de/a/wie-stahlhaendler-kloeckner-den-cultural-change-stemmt,3331492
(accessed September 9, 2018).
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13
Funk, K. 2017. “Von Digi Days bis Fuck-up Nights. Wie Stahlhändler Klöckner den Cultural Change stemmt.” Computer
.

Woche. https://www.computerwoche.de/a/wie-stahlhaendler-kloeckner-den-cultural-change-stemmt,3331492
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(accessed September 9, 2018).

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