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Tuesday, March 20, 2007 |
Registered attendance exceeded 2,500 as the fourth ABB "Automation World" kicked off today. CEO Fred Kindle announced that 2006 sales were up 22% in organic growth, while orders in North America were up 19%.
Kindle gave a keynote plus led another session focusing on globalization. First, addressing customers' (and ABB's) competitive pressures, he mentioned globalization, industry consolidation and the efficiency of capital markets that put quarterly pressures on executives. But despite all the pressures from these forces, he maintains that the world is rich in new opportunities. While there was a trend to use Internet auctions as a means to drive out all value to a sale except for the price, customers actually want to do business with a company they trust.
In his further analysis on globalization at a later session, Kindle figured there were 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 the environmental factors-energy and scarce resources. Then there is the treat of rising protectionism that could end the free markets we enjoy now. Last is the growing importance of global financial markets. He noted a CEO needed a thick skin and a backbone in order to do the right thing for the long-term survival of the company in face of pressures for quarterly results from analysts.
In a private interview with me, Dinesh Paliwal, North American president and global executive vice president of automation, cited three important trends he sees occurring globally. First is ease of use. While design engineers have been busy adding functionality to their products, customers have less time to learn how to use them. Therefore a significant portion of R&D dollars are now invested on figuring out ways to make the products easier to install and use. He next cited energy usage-a sweet spot for ABB since it is a world leader in variable frequency drives. Drives are a significant way to reduce the amount of electricity used by motors-consumers of two-thirds of the electricity used in manufacturing. Another trend is customers expecting more support from their suppliers which tracks with a trend to pare the number of suppliers to a manageable amount. Full service contracts where ABB assumes total control of maintenance are a significant source of revenue.
ABB has undergone a significant turnaround over the past few years. It has gone from almost a basket case to growing faster than the market. Paliwal attributes the turnaround to several things, but first of all a culture change in the company. The people have gone from a loser attitude to a winner mindset. Asked what contributed to the change, he responded "communication." The executive team traveled to the entire company 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 practice of submitting questions prior to the event and told people to ask them live.
The second thing 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 many sales opportunities were lost. Customers have actually written management And congratulated them for reducing the complexity of dealing with them. Another aspect of simplification is focusing on industries where the company is strong in products and expertise and walking away from situations where this is not true.
8:26:09 PM 
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I am in Orlando at the Caribe Royale resort at ABB's "Automation World" customer conference. Last night was a reception and dinner. I chanced upon Dinesh Paliwal, North American president and member of the executive board. He told me there were 2345 (if memory serves) registered attendees. I actually met the executive board briefly and chatted with CEO Fred Kindle. They are holding their monthly meeting here instead of the usual place in Zurich so that all can listen to customers and get a feel for what's happening in the market.
There was a reception in the exhibition hall and the buzz and excitement was strong--powered by more than the free alcohol ;-)
I'm about to set off for the keynotes. Following that, the PR people have scheduled an executive roundtable for editors to hear what's happening and ask questions. I'm scheduled for an interview with Dinesh later in the day. Hope that comes off. He's extremely busy at this event. More later--I'm told there's wireless Internet access over at the convention center.
7:18:44 AM
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My 30th podcast has been published. This one is a conversation with Jim Pinto about his latest trip to India and a visit to Infosys. Interesting observations on running a company.
I have also been learning more than I ever wanted about editing audio in Audacity. There was a problem with Skype where every once in a while Jim's feed would delay then ping. I had to go through and edit those out. Must be a California thing. I listened to the latest TWIT on my way to Orlando yesterday and Robert Scoble had the same problem on that recording.
Anyway, with my new-found expertise, I went back and edited Podcast 29 with Paul Wacker to bring up his volume a little.
7:12:46 AM
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© Copyright 2007 Gary Mintchell.
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