A record attendance of more than 2,500 registered attendees descended upon Orlando’s Caribe Royale resort for the fourth ABB User Conference March 20-22.
Fred Kindle, chief executive officer of the Zurich-based automation supplier, trumpeted sales increases as the company has rebounded from its doldrums of 2001-2004. Sales in 2006 increased by 22 percent in organic growth, while orders in North America were up 19 percent.
In his keynote address, Kindle spoke of challenges facing both ABB and its customers from globalization, industry consolidation and the efficiency of capital markets. The latter puts huge pressure on executives for quarterly results. But any executive trying to build a company for the long term, according to Kindle, must have both thick skin and a strong backbone.
In his further analysis on globalization at a later session, Kindle discussed four situations that companies face due to this trend. First, there is increased uncertainty about the future and where your competition may come from. This can be met by diversifying, practicing sound financials such as maintaining proper debt/equity and dropping fixed planning in favor of developing multiple scenarios of the future. Next are the challenges posed by environmental factors—energy and scarce resources. Then there is the threat of rising protectionism that could end the free markets that global manufacturers now enjoy. Last is the growing importance of global financial markets.
Dinesh Paliwal, North American president and global executive vice president of automation, was asked by Automation World about the most important trends affecting automation that he sees. He first cited a trend toward product simplification. “A significant portion of research and development dollars are now invested on figuring out ways to make the products easier to install and use,” he said. He next cited the push toward more efficient use of energy—a sweet spot for ABB because it is a world leader in variable frequency drives.
Asked about what has contributed to the significant turnaround ABB has undergone over the past few years, Paliwal first cited a culture change in the company. The people have gone from a loser attitude to a winner mindset, he said. Asked what contributed to the change, he responded "communication." The executive team traveled to company locations globally, talking about the state of the company and what was needed to turn things around. Paliwal and his team hold quarterly town hall meetings broadcast live to all North American employees. All are encouraged to ask any question of the executive team during these sessions. When people were reluctant to ask questions live, he ended the earlier practice of submitting questions prior to the event and told people to ask them live.
The second factor mentioned by Paliwal was implementation of "organizational simplicity." One example is in cross-selling. Previously, a customer might interact with many ABB sales people. There was no "ABB face," and thus many sales opportunities were lost. But since the implementation of a new policy that consolidates the number of contacts, customers have actually written ABB management and congratulated them for reducing the complexity of dealing with the company, Paliwal noted. Another aspect of simplification is focusing on industries in which the company is strong in products and expertise, and walking away from situations where this is not true.