It's one thing to make a statement that underlines the importance of innovation - it's another thing altogether to have it actually engrained within a company that's of Henkel's scale.
Germany-headquartered Henkel has certainly come a long way since the business was founded in 1876 thanks to the entrepreneurial fervor of its eponymous founder, Fritz Henkel. After all, while it may have come into being as a company that sold laundry detergent, Henkel is today a multinational enterprise that holds leading positions in both consumer and industrial businesses. Its portfolio thus includes everything from, yes, laundry detergents and haircare products (aka the Henkel Consumer Brands business), to adhesives and functional coatings (aka the Henkel Adhesive Technologies business). These two business units have allowed Henkel to see sales of EUR22 billion in 2022 (with an operating profit of EUR2.3 billon), with the company -whose Düsseldorf-based headquarters I visited this summer- proudly declaring that it is "leading the way to reimagine and improve life every day."
Now, it's one thing to make a statement that underlines the importance of innovation; it's another thing altogether to have it actually engrained within a company that's of Henkel's scale. Indeed, Henkel CEO Carsten Knobel confirmed this to be a challenge when I asked him during an interaction in Düsseldorf about how he goes about ensuring that his company's culture stays true to the entrepreneurial principles with which it was founded. Knobel, who started in his current role in 2020, replied that much like other corporates, Henkel too has been on a mission to ensure its agility even as it continues to grow. "We are on a journey," Knobel said. "We are not there, where we want to be, but what I've seen is that we are changing, and that, step by step, our people are believing that they are being empowered to showcase a more entrepreneurial spirit."
But it's not just an internal exercise either, Knobel added- he pointed toward Henkel's corporate venture capital arms as a showcase of its forthright approach towards innovation, which runs under the slogan of "collaborate to innovate." There's Henkel dx Ventures, which is the corporate venture capital arm of Henkel Consumer Goods, while Henkel Tech Ventures represents the same for the Henkel Adhesive Technologies side of the business. Both funds were launched with a volume of EUR150 million each, with their aim declared as being to explore "new technologies, applications, and business models in areas of strategic interest to Henkel."
But then again, one doesn't have to look too far to see examples of Henkel's efforts at enabling innovation- for starters, check out the Inspiration Center Düsseldorf (ICD), which the company inaugurated in 2022. Built with an investment of over EUR130 million, the ICD, which falls under the umbrella of Henkel Adhesive Technologies, is a state-of-the-art innovation and customer center spread over a floor area of 47,000 sq. m. that provides space for 30 laboratories, four technology centers, and more than 650 members of staff. In a statement released at the launch of the ICD, Knobel noted that the ICD was "the largest single investment" in Henkel's history, with him also highlighting that it was an embodiment of the company's "long-term entrepreneurial thinking." Today, besides being used as a space to bring people together and co-create new solutions, the ICD also allows Henkel to create amazing experiences and share know-how and expertise with its customers and suppliers, as well as its many partners from industry, academia, and beyond.
At this point, given that the ICD falls under the purview of Henkel Adhesive Technologies, one might be curious to know more about the business unit driving this unique innovation building. For starters, know that the solutions that come out of Henkel Adhesive Technologies are literally in a multitude of objects that we make use of on a daily basis- think everything from cars and mobile phones to furniture and textiles, and even sneakers! "Having been in business for over 100 years now, Henkel Adhesive Technologies is today the market leader for adhesives, sealants, and functional coatings," Azmi Shams, Head of Henkel Corporate Communications in the GCC, pointed out. "Through innovative thinking and entrepreneurial spirit, Henkel Adhesive Technologies shares the visions of its customers, and enables the development of groundbreaking innovations in areas such as sustainability, mobility, and digitalization."
In 2022, Henkel Adhesive Technologies generated over EUR11.2 billion in revenue, with its organic sales increasing by 13.2% in the same period. Here, Shams highlighted the GCC as being an important market for the business. "Our Adhesive Technologies business unit has been a pivotal player in several prestigious infrastructure and building projects in the GCC," Shams revealed. "Our contributions to constructing iconic landmarks, including the Burj Khalifa, Palm Jumeirah, and Expo 2020 Dubai, have solidified our reputation in the GCC region. Additionally, Henkel has been involved in other notable projects, such as the Abrahamic Family House, the Green Riyadh initiative, and the Hatta Pumped Storage Hydropower Plant. Our expertise in adhesive solutions has played a crucial role in making these projects successful and has reinforced our commitment to excellence in the construction industry."
Henkel is also the name behind several well-known brands in the GCC. "Notably, brands like Loctite, Pattex, and Henkel Polybit from the Adhesive Technologies division, along with Schwarzkopf, Dac, Persil, Palette, and Got2b from the consumer brands business, have become top choices among GCC consumers and customers," Shams said. "Henkel remains focused on tailoring its offerings to meet the region's specific needs, consistently introducing leading products that align with the preferences and requirements of the local consumer base." Henkel's commitment to positioning sustainability at the center of everything it does hasn't gone unnoticed either. "The development of sustainable and innovative solutions, while continuing to shape our Adhesive Technologies business and increase our economic success, is what allows us to remain at the forefront of the industry," Shams noted.
Having made its entry into the GCC in 1998, Henkel now has its regional headquarters (which caters to its business in the Middle East, India, and Africa) in the UAE, with Henkel GCC boasting of a work- force of over 1,600 employees. The enterprise operates three plants in the region- two are situated in Saudi Arabia, and there's one in the UAE specific to Henkel Adhesive Technologies. In addition, Henkel also runs two innovation centers for the region in the UAE. "The GCC region remains a crucial and promising market for Henkel, as it has already made significant investments across the area, recognizing the region's immense potential. Henkel's success is evident, as it devotes equal attention to both its business units, Henkel Consumer Brands, and Henkel Adhesive Technologies. By thriving in various market segments, the ompany showcases its strength and adaptability," Shams concluded.
THE EXECUTIVE SUMMARY: Azmi Shams, Head of Henkel Corporate Communications GCC, sounds off on the company's focus on innovation.
"Fritz Henkel, the pioneering founder of Henkel, has laid the foundation for the company's success through the development of innovative products and technologies from the very beginning. Till now, Henkel continues to foster a culture of innovation by empowering employees to push boundaries and transform innovations into true competitive differentiators. Our commitment to pioneering new technologies and solutions for the future, as well as catering to the ever-changing needs of our consumers is at the core of our corporate purpose, which is to be 'pioneers at heart, for the good of generations.'
Together with customers across 800 industries, we continuously develop new technologies that improve products and business models, delivering more targeted, customized solutions. The Inspiration Center in Dusseldorf (ICD) is Henkel's first global innovation center that represents the entire technology portfolio of Adhesive Technologies, and the company's biggest research and development (R&D) facility around the globe. With headquarters in Düsseldorf, the state-of the art building, built with an investment of EUR130 million, brings Henkel experts together with customers and partners to develop novel solutions for megatrends such as sustainability, mobility, and connectivity, with these running the gamut from safer e-mobility to sustainable food packaging.
Reflecting our corporate purpose, our Innovation Impact program aims to cultivate an innovative culture among future generations, empowering them to push boundaries and shape them into pioneers. Based in our Inspiration Center Düsseldorf, the program is designed to offer hands-on experience with state-of-the-art projects, top-notch mentorship, personalized career planning, and international work opportunities. The Innovation Impact program plays a crucial role in fostering a culture of innovation, attracting top talent, strengthening collaborations, and driving sustainable business practices. By doing so, it contributes to Henkel's continued growth, reinforces its position as a pioneer in the industry, and ensures the company's ability to meet the evolving needs of customers and society."