Learn to Decide: Heidelberg Materials CEO Dominik von Achten

0:00A CNBC original podcast. We all have to make big decisions in our lives. Decisions that define and influence our professional and personal journeys. If you reflect on them, some are good and some I'm sure you'll definitely regret. In my nearly three decades as a financial journalist, I've interviewed literally thousands of CEOs, politicians and market voices, and they all had to make decisions to get to where they are today. In this podcast, I hear about those choices as well as the moments of doubt, risk and conviction that impacted our guests' journeys and the people they lead. This is Executive Decisions with me, Steve Sedgwick.

0:43In this episode, I speak to Dominic von Acton. If I'm honest, I absolutely love decision making. But I tell you, when I was 20, that was not necessarily the case. So you can learn this. Dominic is the chairman of Heidelberg Materials, one of the world's largest building materials companies. But he began his professional career as a lawyer before making the leap into consulting. Decision-making was much different from the legal side of things. I tell you, my head was spinning at the time, but my learning curve was fantastically high, and that's what I enjoyed. Dominic admits that with the speed of change in technology and AI, he needs to continue to learn.

1:23and he publicly advocates for the youngest people in the company to be given a voice. I definitely need the input as the CEO. I still take the final decision. Fair enough. But if I do this without knowing how that generation ticks, how they look at certain topics, what are the optionalities that they have on their mind, I would fall short on making a good decision. These are Dominic Foynachtin's executive decisions.

1:51here's a quote from you from a couple of weeks ago on linkedin every conversation is a chance to walk in someone else's shoes and you were chatting to one of your business development managers let me have that conversation with you now um why are you the ceo of heidelberg and not a lawyer or a senior consultant at one of the biggest consultancies in the world you You could have been either. Look, I started my career on the university level with legal studies. But when I then – in Germany, you have to do two levels. So it's university and then you go to court and be trained. And I have to tell you, it was dry like hell.

2:31I'm being very open. Nothing for me, very little interaction with other humans. You were sitting above your pile of paper and just going through that pile of paper. So I said, no, thank you very much. And that's where I then decided to go, let's say, fast track down the business side. So why did you study law? Why didn't you study business or economics more broadly? Because I know many people who chose law originally and then wanted to move on to other things as well. Were you forced into law? No, I was not forced at all. It was my own decision. But I have to say, also from home, I have some legal backgrounds.

3:08There are quite a few lawyers in there. In fact, my dad actually studied also law and economics. So maybe that's a little bit, you know, there is a little bit of a family tradition that suddenly went in the back of my mind with that decision. But the reason I did it is, and I don't want to be offending any business studies people, but I think, you know, the saying at the time was, if you study business, you basically try to understand what happened in business first. and the legal side of things gives you really this structural thinking, analytical thinking. And I think the combination of the two was actually a great preparation for both the consulting work, but also the work at Heidelberg.

3:48Tell me a bit about the entrepreneurs in your family that gave you that seed that grew and grew throughout the years. I have a family background on the entrepreneurial side, both from my mother and my father. So I think there is lots of input that you get. But as always, as a young kid, if you grow up in those circumstances, you typically try to find your way and your own, you take your own input from what you see. And there's certainly one thing that always stuck in my head, Steve, when these entrepreneurs are all around it. And my grandfather actually once told me, you know, Dominic, as an entrepreneur, you are never happy with what you have achieved.

4:30And this is this constant curiosity, this constant energy to try and get better every day. I think that's something that I found fascinating. It plays to my heart. And it certainly helps also in a corporate career, especially also as a CEO. That's absolutely fascinating. A very good friend of mine is an ex-lawyer who is an entrepreneur of his company. And his story sounds so familiar to you. Law is dry, but it is a fantastic foundation for many of our viewers and listening as a career onto other things. It doesn't have to be the end product, does it? Exactly. Many lawyers go into different careers, but it's a great foundation for many careers.

5:10I mean, you can go to government. You can go to diplomacy. You can practice law. You can go into business. You can go into consulting. I think there are so many different career paths if you start with law. You've already very clearly shown that family is important to you. You've mentioned your grandfather. You've mentioned your mother and your father as well. Were these the great role models as you were growing up or was there someone in business you were looking at? I think I was not the type of guy that was looking for big role models at the time. But I think in your smaller ecosystem, those that you mentioned clearly.

5:43And my grandfather was clearly one of the entrepreneurs that I was looking up to. And he has really put a stamp on my earlier thinking. I think that's absolutely clear. And then, you know, I was just reading. I'm not a big reader of books, but I did read a couple of books on some of these corporate careers, entrepreneurial careers over the years. And I think there are great entrepreneurs in Germany. There are great entrepreneurs in Europe. And obviously, some of those then over time become a little bit of a role model, if you want to say that. So tell me about 1996. You are at that time, correct me if I'm wrong, 30, 31.

6:20You're moving to Boston Consulting Group as well. You've made that jump from, and no offense to all the lawyers watching, from the drier world of law into consulting. That must have been an incredibly exciting decision for you. I think it's clear in the first couple of months and years in consulting was quite tough. I'm being very transparent about this. As a trained lawyer, you go into a fast-paced consulting role and try to play in the Champions League there. That's a challenge. But I love the challenge. It was a big challenge because the pace of work, the different angles you have to put into your decision making was much different from the legal side of things.

7:04So I think I tell you my head was spinning at the time. But it was, I mean, my learning curve was fantastically high and that's what I enjoyed. I know when I first became a derivatives trader, my learning curve was enormous and I made enormous numbers of mistakes. And luckily, I kept my job and did okay in the end. But the learning curve was terrifying. I had enormous moments of self-doubt. Are you saying that maybe that was similar for you? Of course. I think I would be lying if that's not the case. You know, if you learn faster, there is also a chance to make mistakes. And I did make mistakes.

7:39The question is, you also learn how to correct the mistakes or how to go about with these mistakes. So I remember very well a couple of moments where it was on the edge whether I would be able to stay in consulting or not. You know, it's up or out in that respect. So it becomes a zero and one decision at some point. And then you also, you know, you learn how to deal with these edgy moments in life, which I think is a very important experience. Which is not nice always, but very important. Which CEOs have to live with on a regular basis. So it was good training for later on. Can you just give us a bit more color on maybe one of those pivotal moments during your career at Boston where you thought, I have made a huge mistake.

8:20This isn't for me or I'm really worried about my career here. No, look, you know, I was on one of these projects where you then get the feedback every three months. You get thumbs up or thumbs like that or thumbs down. and there were moments in one of those projects where the thumb was down and said, Dominic, this is the final call. Either you get your act together or it won't work. And I very well remember that discussion with one of the partners at the time who was giving me the feedback. And we had a very open and honest discussion and it was fantastic. And in the end, it worked out. But that was one of the pivotal moments.

8:54But in order to become the man, the leader you are now, all of our viewers, they have to go through those moments, don't they? Absolutely. I think that's where you learn the most. I always say, if the sun is shining, it's easy. Everybody can manage a company. Also, if the sun is shining, but if the water gets rough, then you need to show leadership. And that's where good leaders also have an ability to grow further. But the good news is you did get the thumbs up eventually on a lot of these projects as well. Tell me a little bit more about your career at Boston. You traveled a lot as well. Was it fun or was it just really stunningly hard work and fun?

9:34I've gone through almost 10 years of studies because if you study both law and economics, it takes a lot of time. Then I did my PhD as well. So I tell you, I was also done with studying, being a fairly practical person. And then I just wanted to get going. So I was full of energy to tackle the challenge. And of course, I was traveling a lot at the time. Just one more on education, because there are a lot of people, especially in Europe, who prolong their education and they do a lot of postgrads and they'll do their PhD and their doctorate or they'll get their MBA as well. Do you think that's the right decision for people to elongate the education rather than actually being in the workplace?

10:15Because it's something I've pondered a lot over my life and my career, whether it's better to be in the workplace or learning to be in the workplace. Yeah, that's interesting. You know, with my four kids, I have exactly that discussion. 19 to 23 at the moment. Exactly. And there are different models that I can see. I think one of them is going into the job when she was 21, after she did her bachelor already. And the other one is studying until she's almost 30. So I think it'll be a different approach. But I would say what I do pick up is that there are quite a few young kids that also understand that the practical work outside of studying is also something where you can learn fast.

10:58So what I do see now, at least in Germany, you do your bachelor and then you maybe do a couple of years work and then you do, for example, an MBA or something. so you can stagger things and I think that's probably a pretty good model to keep your learning curve.

11:18You wrote on LinkedIn three months ago, when the cookie speaks, the crumbs stay quiet. Now, you know what I'm referring to. That's basically how it was earlier on in your career, that the senior people speak, they get to make the decisions, but everyone lower down has to be quiet. And you, I think, are trying very hard to make that not the case, to let all different constituencies have a voice as well, even the most junior employees as well. You said even the youngest generation, I would say especially the youngest generation. Right. Why? Because I'm absolutely convinced that the times are changing so fast when you talk about this whole technology coming up, the AI development coming up.

12:00Guys, I'm not an AI I'm illiterate. I am not. I'm clearly not. And by the way, one or two generations below me are not. So I need the 25-year-olds to teach me. I definitely need the input as the CEO. I still take the final decision. Fair enough. But if I do this without knowing how that generation ticks, how they look at certain topics, what are the optionalities that they have on their mind, I would fall short on making a good decision. I want to know what the biggest decision in your career was. And I'm going to perhaps take a guess here. And if I'm wrong, then I'm wrong. 2007, I think, was perhaps the pivotal career moment for you when you switched from consulting to Heidelberg as well.

12:41Wrong or right? Honestly, wrong. There are other decisions that were, I think, more important or more critical. From the outside, it does look that way. But I used the consulting side always as a big training ground. But I knew very well at the very first years that I'm not going to do this for a living forever. So honestly, if that opportunity came along, I was happy that it did come along. And it didn't take me three days to think about it. So I discussed it briefly with my wife. And then off we went. So that was… Can I ask you, what did your wife say? She was absolutely supportive. She said, hey, if this is what you want to do, go.

13:26I'm going to support you. Because it really matters to our partners' lives when we make these big decisions. Of course. So I did discuss it with my wife before I made the decision to be – not after I made the decision. A very wise man. So what was the biggest decision of your – I mean, I'll come back to that. But what was the biggest decision of your career? When I took over as a CEO more than five years ago now, the question was – I was in the company 15 years. And the question is, you know, how do you, as an internal hire, how do you then tackle the challenges? And, you know, yes, you can do more of the same or you have the courage to also flip things a little bit upside down.

14:03And that's where I had a very interesting input also from the outside in from a former U.S. CEO who said, Dominic, if you are coming as an internal CEO, you better take the brutal perspective of an external hire. And that really helped me to flip my mindset, to look at Heidelberg from the outside and ask myself, what is now the biggest lever for success going forward? I've never heard that before put in that way. When I'm an internal hire moving up to CEO, I need to look at the whole thing as if I'm an external hire as well. That is fascinating and really important, isn't it? And you did. I think it was crucially important for the development of the company because otherwise you go into the trap that in the end you do more of the same.

14:52And again, going back to the earlier point, it's so fast paced. If you are not asking and putting question marks around your past performance every day, you miss out on opportunity. And I think you've also said you didn't necessarily intend to be the CEO of Heidelberg Materials. But my goodness me, the impact you can make in that sector is absolutely enormous, isn't it? Exactly. There were quite a few of my former colleagues there. Dominic, are you really sure you want to go into this dusty business in construction materials? And then, Steve, you're right, it flipped big time when we now have these topics of decarbonization and also digitalization and automation, where we can really roll up the whole industry and make a massive difference going forward because it's been a fairly traditional industry.

15:43Do you feel the decisions you've made have got you where you need to be already or there's still more work to do on cracking the profitability stroke decarbonization at the same time? I think you're absolutely right, Steve. I'm adamant about the fact that don't try to embark on the decarbonization topic as a publicly illicit company if you can't combine it with profitability. And I think I'm really happy and grateful for the team's performance that we have in the past done this really well. So I think we are there in terms of being able to both be very profitable, growing the profitability even, and also being well on track with our decarbonization agenda.

16:21But it's a fight. Do you think the world is making the right pragmatic decisions at the moment on this transformation? because there is no doubt about it. In the world that I inhabit, it looks like it's not as preeminent as it was. Yeah, look, I think, Steve, the topic is there to stay. I think there is so much evidence that the climate change is happening and you see all the natural disasters that are popping up everywhere, whether it's flooding, whether it's heat waves. I think there is no way you can deny that that is happening. And you see it also in the discussion with the insurances. I mean, if you look at what the risk premiums do on the insurances, there you see the immediate impact.

17:00I think we are still in a moment where we are trying to find the right balance between what does it cost and how do we make it happen. I think things come and go a little bit in terms of how intense they are. Maybe in this part of the world it plays a more prominent role right now than it does in other parts of the world. But I tell you the topic is there to stay. And in fact also wherever the companies sit, the big responsible companies, they keep pushing for a better world. Is North America harder sell on the greener product at the moment, given the fact that we have an administration that is less focused on climate change?

17:36I would say that the mainstream has changed a little bit in that respect. That's our view. I think there are still a lot of companies that are very focused on driving down the decarbonization agenda. Now, going back to your earlier point, if we combine it with profitability, even the existing administration loves to make profits. So if you combine the topic with profitability and decarbonization, maybe also in that order, I think there's also a way to decarbonize in the US.

18:12Dominik, I think you've given us a large amount of the answer to Nate's question, but I want to ask you it very specifically. in your decision making, very bluntly, what motivates you? I love to create impact. And I also love to keep sight for what this impact does to future generations. Because I mean, I only have a tenure of x years as a CEO. But I think you can pull levers and you have the honor to pull levers that may last beyond your own tenure. And that's what strategies and their implementation is all about. What is the key quality that sums up you as the most important decision maker at Heidelberg?

18:54I have the same discussion with my wife about what is really the key contribution. I think curiosity is something that I also keep telling the younger generation when they ask me, Dominic, you know, how do I become a CEO? To go back to what I learned from my grandfather, if you want to become better every day, you need to be damn curious. Otherwise, it won't work. Dominic, you mentioned earlier on this interview about tough decisions in your career at BCG early on. What has been the toughest decision in your career at Heidelberg? I would say the moment, going back to the pay topic, the moment when we introduced the sustainability and decarbonization topic into our remuneration for the larger management team.

19:39because we said at the time, guys, it's not only about profits anymore. We take 30 % of your total variable compensation that's linked to reaching the decarbonization targets. I tell you, in a very profit-driven company, that was a tough one because there were many people saying, hey, so Dominic, I can't contribute if I'm in the tax department, if I'm in the purchasing department, I can't contribute. I said, we're all sitting in the same boat, let's go. But this was a tough decision at the time. And did it mean that you lost personnel? No. I think there were quite a few questions coming to me.

20:15There were quite a few, do you really mean this? But after a couple of weeks, things calmed down and then we moved on. You know, whenever every difficult decision is tied to people in many cases, because that's where it gets uncomfortable. That's what you don't typically like. And this was one of them. People like to know about life balance as well, of a CEO. You've mentioned the incredible industry you have to put in and the energy levels you have to have. I cannot imagine how tough it is. Your travel schedule, your work schedule. I mean, being a consultant, you were probably well prepared for it as well.

20:51But one of my favorite moments in this season was where a top female CEO took me to task and said, do you ask the men about that, about work-life balance? So let me ask you about that point again. Do you get your work-life balance right? It's never perfect, Steve, but I'm working hard on it. I think it doesn't come natural. You have to be disciplined around your work-life balance, I believe. Again, family time is important for me. I do take some time to do my sports. So every morning I get up an hour, an hour and a half earlier before the day starts to do my sports and also meditate. I meditate a bit every morning and that really, I think, keeps me somewhat in balance.

21:29That's really fascinating. I hear a lot more about not only physical health, which has always been. And dare I say it, a lot of American CEOs, they're very big on I get on my cross train or I get on my Peloton or I do my 10K every morning. But we're hearing more and more. And I've heard it on this season as well about mental health and the importance of mental health. We see this in our companies. There's the physical health topic, but there is more and more, especially after COVID, there is this mental health topic. So I have the opportunity to also experience a little bit myself and it really calms you down in a way that you are, I think it really drives also, it has an impact on your decision making because it's not like this impulse decision making, which is dangerous as a CEO in times like this.

22:18it really tempers you down a little bit and makes you think about before you finally decide. Not for days, but for only a few moments or a few minutes is good enough to take not the wrong decision. I think you love making decisions. I don't think any CEO could be a CEO without loving making decisions. Do you get a rush of adrenaline? Do you really like doing it? And do you get a rush of adrenaline? You'll be surprised by the answer, if I'm honest. I absolutely love decision making but I tell you when I was 20 that was not necessarily my other case so you can learn this and I think it's it's interesting it depends very much on your ecosystem that you're operating in and in consulting I started to learn decision making but in a if you move to a corporate job and you don't love decision making you're in the wrong you're on in the wrong place so I think I really trained myself to towards that decision making and now it's really It's almost the adrenaline moment to make decisions.

23:18How did you train yourself? It's exposing yourself to crossroad moments. Because in crossroads moments, it's either that way or that way. You have to make a decision. You can't go straight. It's left or right. And if you expose yourself to those moments deliberately, you force yourself into decision making. And then, as always, if you train things long enough, it becomes a passion. Dominic, I'm pretty convinced that this edition will air very close to a key moment in your life. One of those milestone birthdays. By the way, in advance, congratulations. Will you be thinking about your key decisions that you are still to do in your career when you hit that milestone?

23:59Because I think for all of us, when we hit those big years, 40, 50, we have a good old think about our lives, what we've achieved and what we're going to achieve more. Look, Steve, I've got the honor to really sit at one of those crossroads right now for quite some time. And for me, it would be really a pleasure if these strategic pillars that we have built around decarbonization and also digitalization, automation and AI in Heidelberg would lead to a situation where we really shape an industry that's been around for centuries into the new era. We have all the tools, all the people on board. And if I can make my contribution, I think that is really kicking my energy.

24:43And do you think that Europe as a continent and the CEOs, the leaders in Europe are going to make the right decisions? Because we're slow at the moment in Europe. You and I have talked about this previously. We really need to get some of that Asian, some of that Middle East, some of that U.S. energy. You've worked in New York. You work for Boston. You know that energy. Are we just too slow in Europe to seize the opportunity going forward? We are right now, and we have to get going. We have to accelerate, and we have to also be willing to learn, A, from the younger generation, but also from others.

25:15That's why we operate in China. That's why I operate in China, because I want to be head-to-head competitive with the Chinese in order to learn from them and then get faster. But we need this energy and curiosity to really be also open for change, because one problem for Europe is that we have a legacy of centuries, but we can't rest on that legacy. We rather need to reinvent the legacy into something dynamic going forward. And if I can make a small contribution with that, I'd love to. I think that's the perfect place to leave it. Dominic von Acton, thank you very much indeed. Thanks so much, Steve.

25:48Dominic von Acton is fascinating for many reasons, but I think the fact that his career evolved in such an interesting pattern is a lesson for all of us. He didn't start off in industry and end in industry. He trained as a lawyer. He practiced law. He became a consultant for 10 years. It was only in the latter stages of his career that he found industry and ultimately running one of the biggest industrial companies, Heidelberg Materials, on the planet. Fascinating too. He didn't like making decisions. He was a young man. He did not like it. He says it at 20 years age. I didn't like it. But over time, he learned to love making decisions.