Stronger through change Let me start by expressing my heartfelt thanks for the wonderful welcome I have received. It has been overwhelming, and has given me extra energy and courage to lead our amazing company. Grundfos stands on the threshold of an important journey. Our results to date for 2014 are not good enough. Our revenue is growing, and we are pleased about and proud of this. But we are not managing to earn more money on our growth. Without solid and improved earnings, we cannot continue to invest in pioneering research and product development, and devote our full energy to our most important markets and customer segments. This leads to the risk that we will be unable to pursue our vital aims, and that our position as the world's leading pump manufacturer may come under pressure. We have therefore spent the last few months looking at what we are doing well – and what we can do better. I can already begin to reveal some of our findings here. During my first months I have met many different colleagues, working in every conceivable role, in many countries. When I asked people what they would do if they were in my position, I received a wide variety of answers ranging between: 1) Grundfos is doing brilliantly, we are increasing market share, and our competitors are envious, and 2) Grundfos is a company in crisis, we are losing market share and our competitors have overtaken us. The truth lies somewhere between these two extremes. The fact is that we are a strong, healthy company with dedicated employees, excellent products and a unique market position. Yet we are also earning less and less, while our competitors are improving or stabilising their earnings. We therefore need to change, in order to be stronger. This means we have to clearly prioritise our most important existing and future business areas. We have to focus on the things we are best at – and the areas where we face challenges. And our organisation must reflect these priorities and focus areas. We have already begun addressing four areas: design to value – optimising product costs, without compromising on quality; indirect purchasing – greater cost transparency and more efficient purchasing; pricing excellence – ensuring uniform price and discount policies; and business support streamlining – adjusting the complexity and size of the organisation to ensure clearer and more rapid decisions. These initiatives are under way. Given our need for a tight focus and priorities, some decisions and steps will be less pleasant. Yet I am confident that the company will come through the process stronger. We must, and we will. We are currently working intensively to complete a new Group strategy through to 2020. This will serve as our guide as we strive to realise our goals: To continue to be the best in the market. To constantly gain market share by being the best at doing what creates value for our customers. To maintain and expand our position as the world's largest and leading pump company. To be even stronger and more agile in the global marketplace, which is destined to see increasing fluctuations and more frequent economic changes. We must also get better at making our organisation more cohesive, so that we apply our energy and each other's abilities as a strong team, across the organisation, always focusing on Grundfos as a whole. Our shared journey has begun. On behalf of Group Management Mads Nipper Group President & CEO Along icy roads 15 12 Towards the green pinnacle 4 5 8 9 14 16 18 21 24 Green initiative at red-and-white embassy Keeping Donald and Mickey's feet dry People are the driving force New pumps helping reach goal Top global sales people meet in Bjerringbro Grundfos around the world Efficient pilot makes ALPHA2 sales skyrocket Alternative methods welcome Spotlight on a bottleneck 2 Gmagazine October 14
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