Well, first of all,
sustainability is really the center of our business.
Grundfos is one of the world's leading pump manufacturers.
We are operating
across the globe.
We are producing close to 16 million products every year.
So sustainability is something we have
been looking into quite many years.
It is really the centerpiece of our
strategy and we care very much about it.
Why was this journey
towards sustainability initiated?
I think there are multiple sources to this.
So there are not like one single
trigger point that really started this.
When you are competing in an industrial market,
you are also competing on price somewhere areas,
right?
So you need to differentiate yourself
with more than just the product,
right?
You need to differentiate yourself on the whole,
let's say,
customer experience part,
right?
But besides that,
we have also been looking into if we should
supply most premium energy efficiency,
we have to take on our responsibility.
We have to drive a lot of development and we also have to include
new things like digital,
like let's say advanced controls.
Otherwise, we cannot supply efficiency
CO2
control or let's say CO2 control or let's
say minimum consumption in our applications.
When did the commercial organization,
what was the starting point for the
commercial organization in this journey?
That's a very good question.
And I think you might get a different answer compared
to who you talk to in the sales organization.
But my way of answering this would be in the way of that if,
again,
if you're looking into a market where it's a lot of
price competition,
you have to differentiate yourself, right?
So a way for us how to drive that discussion
is to understand what are the customer needs,
you know,
what are the real needs,
both visible,
also hidden needs that the customer has.
And a way to to uncover those needs is basically
the whole value selling framework that we have
introduced in Grownforce for some years ago,
right?
This is about having a professional way of
integrating yourself in the customer problems,
understanding the pain points,
and thereby
trying to explain how to explain how to
explain how to solve those pain points.
So that is something we have been,
at the end,
we have embarked on for many years ago
in the sales organization in Grownforce.
But again,
the last few years of sustainability is now a question that
our customers is asking us because they see it in our strategy.
So now they also see us as a kind of consultant,
or at least maybe a way to get some
answers on how we treat sustainability.
And that's actually, I think, the
a turning point that we as a company,
we started to talk about,
communicate about sustainability.
And we talked about how much
we actually took of responsibility.
That actually triggered a lot of customer requests.
Then we also said, you know, we have to look at
what does it really cost to operate a product or a pump.
And we know that 10 to 20% of the entire
cost is when you purchase the pump.
But the remaining 90,
80% of the total cost when you have a pump in 20 years,
is from how you run it.
Is it running sustainable?
Is it not?
Is it operating in a way that is not meant,
right?
Is it operating,
let's say,
completely inefficient?
We actually have a huge responsibility to basically guide our customers
towards getting more output with less money spent on the products.
That is really what we try to do here.
So it started,
I would say,
in our group service organization many,
many years ago,
where we tried to talk about how much
can you actually save in CO2 emissions.
We provided that in our energy reports,
in our energy dashboards,
which is the product we have been,
or consultancy fee,
or service we have been providing for many years.
And it simply started from there.
And we now see that customers are really caring about how
much CO2 they can reduce by using some of our products.
So we started 15, 20 years ago,
and now today it's hotter than ever.
That's actually quite amazing to see.
I know that you have done a lot in terms of value selling.
And that has actually been beneficial to the
commercial organization when it comes to bringing the
sustainability agenda into driving business growth.
So could you elaborate a bit on that?
Well, yes.
The whole value selling framework is a tool
that we have introduced a couple of years back.
It's a tool that really helps
structuring your dialogues with customers.
Essentially,
avoiding customers and yourself just to talk on price alone.
Try,
of course,
to focus on other things that is associated to a product that has,
let's say, a sidekick to it.
And this is about the framework.
It's really a structured way for us to
understand what are the customer pain points,
to understand what can we do about it,
and also what does customers really get
out of it if they are buying our solution.
That is super important,
again,
when you come with a new message like sustainability.
So one thing that's very clear is that you can show customers
how much do you save in terms of total cost and ownership.
But can you also talk around how much
have you actually saved in CO2 emissions?
How much less impact will you get from
this solution compared to an existing or,
let's say,
a parallel solution?
That is really something that is very,
very useful.
So the whole, let's say,
value selling framework is a fantastic framework
for us to have other discussions with customers,
discussions we haven't had before.
And that is really something I can strongly recommend
that everyone embarks on that kind of framework because
it is helping different discussions with customers.
It is bringing different perspectives to life.
And essentially, it's also, let's say,
putting sustainability on the agenda.
And that is something that is really,
really remarkable.
What was the level of maturity for
your customers in the starting point?
They didn't care about the CO2 emissions.
I would also say that just a couple of years ago,
they didn't care about it.
So it's really something that has really
transformed a lot here the last couple of years.
So this is about selling CO2 emissions.
That is something we have been pushing for years
without really,
let's say,
getting the full feedback from customers.
Some were very interested and some were not.
So they have really transformed themselves now looking
into that now sustainability and the CO2 emissions are super
important for them because the trick is that now their
customers is asking how their sustainability footprint is.
So,
for instance,
when I sell a solution to a hotel somewhere in Europe or in Asia,
the question is the same.
It is how sustainable are you operating this hotel facility?
And can you document it?
And that's really the trick.
And that's really the trigger point is
that now customers are requesting to see,
you know,
really proof on how have you been operating?
What have you done in order to lower your CO2 emissions?
What kind of barriers did you see when you were
starting to embark upon this journey commercially?
There are quite a few barriers when you look across the value chain,
right?
So if we start in our commercial organization,
you have to change some of the solution,
you have to change some of the KPIs to focus on,
let's say, selling
the efficiency,
selling the service contracts,
selling the CO2 emissions,
reductions in CO2 emissions
versus just selling a pallet of product range,
right?
That really requires
that the sales organization, you know, gets
the time that is needed in order for them to sell the new feature,
right?
Or to sell the new insight.
Which in this case is about sustainability.
Another thing is,
for instance,
the bottom line in the company,
right?
We have an ambition to, of course, to,
let's say,
maintain our profitability levels and also growing them year by year.
And if you suddenly introduce a whole new array of products that is,
let's say,
having a different footprint or
it costs money, right?
It costs money to develop a new portfolio and it also
costs money to allow sales to spend more time on
selling on CO2 emissions reductions instead of just
selling a pallet of products, right?
So it is really a combination of new sets of KPIs
that allows us to talk about this in the market
and at the same time also allowing our portfolio to be renewed.
Come with some new digital products,
come with some new digital products,
maybe some new smart products that has intelligent controls built in,
right?
That is something that is new,
but it requires time and it costs money.
So it really is a decision from top management.
That's also a feedback I would like to give is that it really requires
to have a long-term vision on and it has to be owned in the strategy
that you allow your organization to work on this.
Otherwise,
if you're just focusing on cost,
cost,
cost alone,
then it will take time and I'm sure that
some companies will face some problems at some point in time.
What has been the toughest decision that
you have had to make during this journey?
I think there are actually quite a few.
It's like,
again,
as a leader,
you have two dilemmas,
right?
You have to run the business,
but you also have to change the business,
right?
So it's
this balance that you have to strike in the right way.
So one of the toughest decisions is that it can
really have a significant impact on our portfolio.
What we deal with right here,
right now is really
some impacts that will come from legislation soon,
right,
on the science-based target.
That could really impact our entire portfolio
and that really calls for heavy investments.
So that is a tough decision where we should do that or not.
And we are right in the middle of that at the moment.
I don't see a way out on this at the moment.
Now we have committed.
Let's walk through this one here and let's,
of course,
make sure we deliver.