Fostering a culture of innovation in industrial tech: An interview with The Heraeus Group’s Steffen Metzger

In this episode of The Heidrick & Struggles Leadership Podcast, Heidrick & Struggles’ Roman Wecker speaks to Steffen Metzger, a member of the group management committee at The Heraeus Group, a Fortune 500, family-owned technology company. Metzger discusses the importance of empathy and inclusion in fostering a culture optimal for innovation and shares some methods for combatting unconscious biases, emphasizing how important it is as a leader to be self-aware and authentic. He also discusses how to develop new leaders and encourage younger talent, as well as some trends and activities he is seeing in the industrial tech space and what leadership and talent implications come with them.

Below is a full transcript of the episode, which has been edited for clarity.

Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation. 

Roman Wecker: Hi, I'm Roman Wecker, a partner in Heidrick & Struggles’ Frankfurt office and a member of the Industrial Practice. I'm also the global leader of the industrial tech sector. In today’s podcast, I'm excited to speak to Steffen Metzger, part of the group management committee at Heraeus. The Heraeus Group is a Fortune 500, family-owned technology company from Germany, active in 40 countries around the globe, with revenue close to €30 billion and around 17,000 people. Prior to his role at Heraeus, Steffen held the position of senior vice president at Infineon Technologies. 

Steffen, welcome, and thank you for taking the time to speak with us today. 

Steffen Metzger: Well, welcome, Roman! It’s a pleasure to have you here in Hanau today. I look forward to the discussion. 

Roman Wecker: Super, so let's start. Steffen, you recently moved from Infineon, a publicly listed semiconductor company, to The Heraeus Group, a leading family-owned company with a properly diversified technology portfolio. The company’s roots go back to a small pharmacy dating back to 1660. What has been their prescription for success in this almost 350 years of history and what can public corporations learn from family-owned companies, particularly in terms of leadership? 

Steffen Metzger: Yes. Roman, I don't know whether I would emphasize the difference between public and private companies so much. I would more start to think about the need to innovate for high-end materials or technology companies, in particular those in the Western World. So, in my opinion, there is the constant need to invent new products to differentiate yourself because, otherwise, competition is just so fierce and, over time, you will not be able to survive. Companies that have survived for such a long time, like Heraeus, found a way to constantly reinvent themselves, to constantly add new products to their portfolio, and in this way differentiate themselves from others.

Roman Wecker: You moved from a senior vice president role at Infineon to a board role at Heraeus. I would be interested to hear about your key leadership experiences [in this transition]. In which aspect did you have the steepest learning curve?

Steffen Metzger: Well, here I would probably mention the terms “direct [leadership]” and “indirect leadership.” As you progress in your career, I think the transition is subtle, but you tend to start with very direct leadership, where you have a team of people you have to supervise. But over time you start to manage entire organizations and you have to manage them much more indirectly, and rather than assigning clear tasks and timelines and deadlines, you need to give direction. And you can do that through aspirations, through visions, through certain topics that you occupy and drive, but it's more through the general communication to a larger audience than it is to your direct reports, where you talk of individual, very concrete tasks.

Roman Wecker: Another topic that I would like to talk about is your background. You studied theoretical particle physics and you once mentioned that the most complex thing in the world are people: their personalities, behaviors, intentions. So, take us through your journey, how you came to this conclusion and what it means for your daily leadership.

Steffen Metzger: It's true that there were times in my life when I believed that anything that is complex can be formulated in a mathematical equation. And now, 20 years later, I realize that driving an organization and giving direction to an organization, making it successful economically but also culturally, is a huge challenge that is at least as complex as any mathematical problem. And this is something where I also constantly learn and find new ways of driving such an organization. I find it absolutely thrilling to be on that leadership journey and this trajectory.

Roman Wecker: Interesting. So, in your opinion, what roles do empathy and inclusion play in that regard?

Steffen Metzger: Clearly, a very important one. I have two thoughts on this. First, an organization can only be successful if you manage to completely unlock creativity, and that means that you have to listen to the organization—everybody in the organization—in a very inclusive way. You need to listen actively to deviating opinions. So that's the one thought. The second thought is that we all have our biases; it's relatively easy to work with conscious biases because you can actively work against them. But do you know about your unconscious biases and how they influence your communication style, your decision-making? There's one tool that I like, and that is to listen to your own language. So, ask other people to either record what you say or actively listen to how you say things, and then try to understand the hidden messages that you send either actively in the language or in the tone in which you express it. And think about whether you actually want to send these messages or whether they are part of your unconscious bias.

Roman Wecker: I think that's a super interesting topic and I think we could probably do another podcast explicitly about unconsciousness. Because I feel also in management and leadership it’s very important to be aware of what you are doing because of your autopilot and the unconsciousness steering it automatically. 

Steffen Metzger: Absolutely. 

Roman Wecker: Another very important aspect of leadership, in my opinion, is certainly how to develop new leaders in highly volatile and fast-moving times. We've seen this explicitly this year; every month is completely different. No one has a crystal ball and it's really, really difficult, I think, to manage, to lead in such uncertain times. So, what are your key insights here for developing young and new leaders?

Steffen Metzger: I don't really know whether times are special. I would argue that each time has its own challenges. If I look at leaders today, I think we need to encourage them to take responsibility. In the end, leadership is not about career progression. If you think about leadership truly, it's about taking responsibility for a company but also for society. You shape part of society if you have a leadership role in an organization. And this leadership comes, of course, with, yes, responsibility, with actions that you have to take, and with decisions that you have to make. And this is not easy, and you can also make wrong decisions. 

Younger talent tend to ask themselves the question, “Do I want to take on this responsibility? Do I want to be in such a role?” To emphasize the positive aspects of leadership, I like to emphasize this shaping aspect when I talk to young people because they want to shape society, shape the world, but still they're sometimes reluctant to step into a leadership role. So that's the dialogue I oftentimes have.

Roman Wecker: And what certainly comes to my mind is yes, on the one hand it means decision making, it means authenticity, it means ownership. And then that certainly is [difficult] sometimes when you don't have the experience and also maybe are afraid of potential consequences if you maybe say the wrong sentence to the wrong audience. That's certainly a topic that is also not easy for younger talent.

Steffen Metzger: If I can comment on the authenticity—I think that's important. People feel that they have to play a role when they become a leader, but the opposite is true: the more authentic you are, the better a leader you become. So, that's also a common misunderstanding that you have to start a role-play because you all of a sudden are a senior member of a leadership team in an organization. But that's not the case. 

Roman Wecker: Yes, I couldn't agree more. The Heraeus Group includes businesses in the semiconductor, electronics, health, and industrial application sectors. In your opinion, what are key factors for success and what role does innovation play in that context?

Steffen Metzger: Yes, as I mentioned earlier, innovation is really make-or-break to the success of a company. But what makes it interesting within the Heraeus portfolio is that innovation has a different emphasis for the different business units. We have business units mostly in the medical space that are contract manufacturers for others, where a large part of the innovation is more driven by our customers and our innovation is more on the process side. But the business units in my area of responsibility, in the semiconductor context, you really have to drive active innovation within Heraeus. And what is challenging is fostering a culture of innovation that addresses both needs, right? So, the customer-driven innovation for some business units and the internal-driven innovation for others.

Roman Wecker: Is there an overall common, so to say, umbrella culture that you would see within The Heraeus Group or is it much better to have a culture of innovation for each and every segment that is particularly, so to say, customized for the segment to thrive?

Steffen Metzger: Well, I think it's a bit of both. On the one hand, the Heraeus brand, the nature of this being a family-owned company really instills a certain culture into the entire organization. Our employees are proud to be part of the Heraeus company. On the innovation side, though, I do believe that we need to foster a certain culture of innovation in those areas where it's particularly important, and that's what we are currently doing. We try to bring together the global R&D community for certain business units that have common interests, be it on the methodology side or on the content side, so that they can really exchange ideas and methods. We give innovation that prominence, but also then take people out for a joint dinner and just hang out with them and give them sort of an ear, listening to their concerns. That is something that we want to actively do to foster this culture of innovation in the areas where it makes most sense.

Roman Wecker: Given that culture is still kind of a soft topic and may be difficult to grasp and to describe, would it be possible for you to describe a best innovation culture?

Steffen Metzger: It starts with top management—in the way we ask questions, in the way we emphasize topics, in the way we speak about certain things. Innovation needs to be at the heart of our thinking, then creativity and openness. On the innovation side, everybody needs to be able to speak out and bring his or her ideas to the table. If you have a culture of fear—“Oh, my boss might not like the idea”—well you have already lost.

Roman Wecker: Very interesting. A last one on the culture piece: when we talk about your talent pool and making the innovation culture happen, what have been the greatest successes and challenges recently?

Steffen Metzger: Well, I believe it's really important to be visionary and aspirational. That goes back to the indirect leadership. So, making it clear where you want to go with the organization really has a significant impact. And also being transparent and clear, not just with a sort of a vision that in the end becomes fuzzy—one that's a nice idea but it's not clear how to get there. So, have a vision, be aspirational, but then also have clarity in how you want to achieve the vision. If you combine that, in my experience, you can really drive employees of an organization to a point where they are self-motivated and then all the rest comes automatically. On the challenges side, I have the feeling that there is a right size for an R&D organization. If it's too small, you lack critical mass, and you might not have sufficient clout to introduce good methodologies or have enough ideas. If it's too big, it becomes really challenging to organize it. It can be very complex and requires quite a bit of discipline. So, find the right size for your R&D organization to be most successful.

Roman Wecker: So maybe a last question from my side: given my personal interest in the industrial tech world and maybe latest trends there, what trends and activities do you see in the industrial tech space and what leadership and talent implications come with them?

Steffen Metzger: Yes, well the good thing is we now have 60 years of innovation in the semiconductor space behind us and I'm totally convinced that we will see 60 more years with more innovation. Very concretely, there are now aspects, and the term is “More Moore and more than Moore." It's one of these famous terms. At the moment in the industry, things are getting even smaller, which comes with the significant challenges on the material side. That is very relevant for companies like Heraeus. And then there will be new structures on the semiconductor side. We will introduce light in ICs, for instance. We also believe that we can start to combine some of our materials, our glass material and some of our packaging—semiconductor packaging material—to meet some of the upcoming challenges in the industry. So, the developments are fascinating and driven by a number of mega trends, from the electric vehicle to renewable energy to, of course, artificial intelligence, to just name a few. So, this will drive demand, this will drive new technologies, this will drive new needs for material. So we look forward to a bright future.

Roman Wecker: I said already that I have a last one, but maybe if I can add one more because ChatGPT and AI have been everywhere and all around. How might ChatGPT influence your business and your responsibility in Heraeus?

Steffen Metzger: Well, of course, it will influence it in many ways. On the one hand, it will influence our markets in terms of driving demand—big on the service side, for instance. Going forward, a significant share of servers will be used to train artificial intelligence models, but we will also use artificial intelligence for internal processes. And that is actually pretty widespread. We have what we call our digital hub within our IT department that is actively screening where can we use AI, be it on the R&D side but also in other areas.

Roman Wecker: Steffen, thank you so much again for making the time to talk with us today. It was very insightful for me.

Steffen Metzger: Thank you, Roman. 

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About the interviewer

Dr. Roman Wecker (rwecker@heidrick.com) is a partner in Heidrick & Struggles’ Frankfurt office and a member of the Industrial, Sustainability, Supply Chain & Operations Officers, and Marketing, Sales & Strategy Officers practices. He leads the Industrial Tech sector in Europe & Africa and leads the Industrial Goods & Technology sector in Europe. He also leads the firm’s sustainability work in DACH.