Dealing with Dilemmas and Turning Risks into Opportunities During the Pandemic
In 1940 Winston Churchill said: “Never let a good crisis go to waste”. You have for sure heard this before. Many business leaders have used the quote – during the “dot com” crisis – during the financial crisis. Today it can also be used when talking about our climate crisis. It is also true when if we should address the water crisis that the world is already in – and that will accelerate. Do you know that around 80% of the world’s wastewater is lead directly into rivers, lakes, and oceans without any treatment?
Companies that focus on solving the world’s climate and water challenge will not only help overcoming the crisis, but they will leaders in innovation and sustainability. They will build an incredible image and brand – and attract customers as well as the best talented employees. And I believe will also achieve strong financial results and “darlings of the stock market”.
At Grundfos we see a huge opportunity in participating the world’s water and climate crisis. We aspire to be one of the leaders in treating and moving water.
Is the Pandemic also a crisis that we should not let go to waste?
On this there is no SINGLE answer!
We can all learn from the crisis – and we all have to respond – and being proactive is always better than being reactive … But how we should respond proactively is very very different!
One of my friends is chairman of Scandinavian Airlines Systems, SAS. When will we travel again? How will we travel? Will we pick up the “old patterns” or will we change behavior? Very hard to predict – but you have too! I personally believe that for tourism it will relatively fast go back to the level as in 2019. But for business travel I think that there will be a permanent effect.
If business travel goes back permanently it will have a major impact on hotels – and restaurants.
Cutting cost is part of the answer, but should it be the only answer – probably not.
I am advisory to the CEO of a major catering business. A major business for them is company lunch buffets! Buffets is not a winner anymore. They must change to more individual servings – while keeping cost in control and continue to strive for reducing food waste. Here technology can play a major role. A connection to the end user can enable a massive disruption!
I am on the board of a private equity company that owns Steel Series that produces keyboards, headsets and mice for gamers in very high quality. With the explosion in work from home – a new market for their products opened – but people with different needs but also demand for high quality.
At Grundfos we are of course also impacted. But fortunate that 70% of our sales comes from replacement sales. We are heavily depending on new constructions – and so far, the building industry is doing OK. I personally believe that we will see an impact, not many new business hotels, not many new corporate headquarters will be initiated in the years ahead – is my guess.
Early in my career I spend 10 years with IBM. The founder, Thomas Watson, had a golden rule: In a crisis you invest so that when economy picks up again you are in a position of strength to beat competition.
I see this as a very strong principle. When others are cutting – you are building for the future. But let me stress that some companies are struggling for survival, so it is not doable for all.
In Grundfos we initiated a major organizational change. We are moving from looking at Grundfos as one business to look at four performance units: Domestic Building Services, Commercial Building Services, Industry and Water Utility.
We are investing in looking into the future and building a vision for how each of our businesses will look in 2030, 2040 and even 2050.
As an example, we have to understand how domestic buildings will evolve in the next decades. Today we flush the toilette with same quality of water that we use for drinking – as we only have one water system in the house. A system for drinking water. A more efficient and environmental friendly solution would be to have several water systems in the house. One system for drinkable water, one for grey water and one for black water. The grey water could be used to flush the toilet – and after some basic treatment be used for our washing machines.
We need to create the visions, make concrete plans to realize the visions – and invest in innovation and digitalization – and thereby actively participate in creating the future.
In my view this decade, 2020’ties, will be the decade of the customer – customer centricity. All companies will move closer to their customers, produce more individual products, services and experiences – servicing customers in a different way – preventive maintenance etc. etc.
I suggest that we all invest in this – and tomorrow never waits, so start today.