ABB goes top gear or bust

Multinational Asea Brown Boveri has decentralised business units, with tiny numbers of headquarters staff and a fast and efficient reporting and control system, which produces heated internal competition on a global scale. There are stringent benchmark standards for operations and customer delivery. Energy switchgear manufacturer and ABB subsidiary Calor Emag, which is 70% export dependent, […]

Multinational Asea Brown Boveri has decentralised business units, with tiny numbers of headquarters staff and a fast and efficient reporting and control system, which produces heated internal competition on a global scale. There are stringent benchmark standards for operations and customer delivery.

Energy switchgear manufacturer and ABB subsidiary Calor Emag, which is 70% export dependent, must hit these benchmarks to retain its export allocation, as well as securing development work on product refinements or new products.

‘You have to be the best in ABB in your market or you will lose export market access,’ says Calor Emag chairman Rolf Renke.

Calor Emag was competing in a low-volume, highly tailored niche area which was shrinking against internal and external competition which focused on high-volume, less demanding products.

After debate, the company decided to invest heavily in automation and moved into a high-volume, lower-quality arena which offered bigger margins.

ABB managers invite opposition to ideas because that means people contribute to that decision. ‘They seek resistance to change as a fine signal that people are engaging in the issue at hand,’ says Taffinder.