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When Big Business Thinks Small

Knorr-Bremse has partnered with Design Terminal to find startups to help the railway brake system maker modernize its internal processes. After a pre-selection process, the short-listed candidates participated in a three-day boot camp where they pitched their ideas. The Budapest Business Journal talked to Attila Bolla, leader at Knorr-Bremse Rail Systems Budapest, about the process.

Attila Bolla

BBJ: What is the aim of this cooperation?

Attila Bolla: In order to address present and future challenges as well as meet today’s industrial demand, Knorr-Bremse Budapest, a traditional large corporation, needs to change and become more like a small-sized company. We need to be more flexible, quick to respond and become more innovative. So, we asked Design Terminal [an incubator with a multi-industrial focus] to help us tie up with startups.

Our aim is to get a better understanding of agile methods, operation and business management. We also aim explore the potential that lies in the cooperation of a large company and startups – in the medium and long run. At the same time, we wish to find innovative solutions that respond to the challenges listed.  

BBJ: What makes Design Terminal a good partner in achieving this?

AB: Design Terminal is a renowned and experienced organization, and a good catalyst between startups and large corporations in the current ecosystem; it knows both sides.

We invited startups to address challenges in three areas: internal communication; red tape reduction and effective workflow; and corporate communication. Following a two-month scouting period, we selected ten startups out of 83 enterprises who applied from around the world.  

BBJ: Was it important for you to invite startups from outside of Hungary as well?

AB: The main criterium was to find a partner that is well-known in the startup ecosystem and has an extensive network that helps us mobilize startups.

BBJ: Is this a local initiative?

AB: It is entirely a Budapest-based initiative. We are aware that there are similar ones elsewhere, but they are independent of one another.

BBJ: Why is it timely to change now? Are your competitors more ahead in these fields?

AB: Quite the opposite. We have several goals: one is employer branding. We wish to distinguish ourselves from other industry players. We want to be more attractive for prospective employees, and introduce new momentum to the Budapest center that helps us retain our employees.

BBJ: So, you also experience a labor shortage? There is a huge demand for engineers in Hungary.

AB: As it is for every player of our industry in Hungary, we have to cope with some degree of labor shortage. Besides employer branding programs designed to address prospective employees, we have concluded an agreement on dual training with vocational schools and run widescale cooperation with universities, especially the Budapest University of Technology and Economics (BME). Our scholarship and trainee programs are especially popular in BME. We regularly receive students, graduates and PhD students who conduct various research projects in our company or get involved in world class innovation projects. Many of them stay with us and join our international team of engineers.

BBJ: Many companies are after innovation in technology.

AB: Knorr-Bremse Budapest has just launched a largescale industry 4.0 project in cooperation with BME and two small businesses, IQ Kecskemét Ipari Kutató Kft. and 4Sales System Kft., in order to develop the prototype of a production management and control system based on IoT and Big Data technology. However, first of all, we need a more modern and dynamic corporate culture, capable of adopting new solutions.

BBJ: So, what do you intend to improve, say, in internal communication or administration? What are the problems that need to be solved?

AB: I would not say there are flaws. This is an organization that functions well. We rather are looking at what could be done to meet the challenges of today and future market challenges. Worldwide, Knorr-Bremse is growing at a fast pace. The factory in Budapest is no exception; its revenues and number of staff are increasing, we cover an ever wider spectrum of railway brake systems, the organization have more members. We are not just a manufacturer, but a development center, where we have an R&D team. The various occupations and departments located at one place breed cultural and communicational differences – both globally and locally.

We try to deal with these differences by delegating a member of each function into another team. However, many of the tools we use (for example email or phone communication) have become outdated.  

BBJ: And you are hoping to find a solution for these with the help of these startups?

AB: Right now, the teams are familiarizing themselves with our specific problems, and will come up with a solution for those during these three days. The last day of the boot camp is dedicated to their sales pitches, when we will select a few projects.

BBJ: How many projects will you pick?

AB: The management wants to take an agile approach and will not limit the number of projects. If there are several that we see the potential in, we may launch several.

BBJ: What type of cooperation are you planning to have? Will they work within the company or remain independent?

AB: We are trying to be flexible in this as well: there are a number of options on how to integrate them into a corporate environment, but we haven’t decided as yet. One of them is to develop these projects within company. If some turn out to be too complex to be managed in-house, we will use external support.

BBJ: Will these pilots later be used by Knorr-Bremse in other countries?

AB: It is too early to say that. The first step is to test the solutions in a smaller environment. If they work out well, we will look at how we can expand it factory-wide. Should it turn out to be a benchmark solution, then can we start thinking about a broader use, but we are not planning that far ahead at this moment.