Sign of confidence

Alan Wood has a hard act to follow. This week he steps into the job of chief executive of Siemens’ UK operations. He takes over from Jurgen Gehrels, the charismatic Anglophile German who has been at the helm of Siemens’ electrical and electronic engineering businesses in the UK now turning over some £2bn for the […]

Alan Wood has a hard act to follow. This week he steps into the job of chief executive of Siemens’ UK operations. He takes over from Jurgen Gehrels, the charismatic Anglophile German who has been at the helm of Siemens’ electrical and electronic engineering businesses in the UK now turning over some £2bn for the past 12 years.

Wood, a fast-talking and enthusiastic Yorkshireman, admits his predecessor had a magic touch.

‘In 10 years, Jurgen oversaw a tenfold growth in the UK business. It’s the sort of record anyone would like to go out with,’ he says. Nor, he adds, is it something that he or anyone else will be able to repeat.

Wood’s appointment signals the confidence Siemens’ German board now has in the capability of its UK management. Wood, who has worked with Gehrels for 10 years, understands the German way of doing things and believes a mix of German and British business styles is a powerful one.

‘Britain is more of a dealing and banking culture. Germany is more geared to industry and growing operations a fact underlined by the respect engineers enjoy in Germany.’

One sign of this phenomenon in Germany is the high number of small and medium sized businesses that are still privately owned the so-called Mittlestandt. ‘You get the impression that an ambitious and gifted young man in Germany wants to grow a business that he can build into a dynasty. In Britain, the aim would be to build up a business, then sell it and retire on the proceeds.’

Both cultures, Wood believes, have their strengths. ‘In the UK we are flexible and more innovative. But we can hugely benefit from German long-termism and attention to detail.’

Wood only worked in Germany for a year, shortly after he joined Siemens in 1981. But he has learned to speak German and believes language skills are enormously under-rated by engineers.

‘British people are bloody appalling linguists. But while most basic business is conducted in English, if you can start chatting with your business partners in their own language, it can have tremendous benefits. It creates a more relaxed atmosphere, which is essential.’

As a teenager, Wood had ambitions to get into industry. He bought a Ford Popular car two years before he was old enough to drive, and took it to bits to see how it worked. While at university, summer jobs at Vauxhall and with ICI convinced him to aim for the business side of engineering, rather than design.

He eventually graduated with a first class degree in mechanical engineering from Manchester University. Then in 1973, five years into his first job as a management trainee at Unilever, he went to Harvard to study for an MBA.

‘I don’t think engineers need an MBA to get to boardroom positions,’ says Wood. ‘But people with the kind of personal drive required to pursue an MBA tend to be those who do well anyway.’

Wood is unlikely to shift Siemens far from its current path. The company’s UK business strategy is based on exhaustively researched five-year plans, which Gehrels started in 1986. Wood takes up his job in the second year of the current planning cycle, a period when UK turnover is expected to rise to between £3.2bn and £4bn by 2001. ‘Where we end up depends on being lucky with acquisitions,’ he says.

The one area of business where Siemens feels under-represented is in power transmission and distribution. After the company failed to reach an agreement to buy power equipment company Reyrolle from Rolls-Royce, steady growth in this sector will be a priority for Wood.

But the real growth area that has potential across all the Siemens businesses is technical services. The principle is that Siemens not only supplies technology, but also the people to operate and maintain it.

Examples of possible deals are many. Siemens supplies utilities with electricity meters, but could add to this service, Wood believes, by managing squads of electricity meter readers.

Equally, its advanced systems for building security and automation could be supplied together with remote monitoring stations, again manned by Siemens-managed staff.

Manufacturing could benefit too. A car maker that did not wish to use a subcontractor for a machining job could install a Siemens system within its factory gates, with Siemens supplying the technical staff to operate the equipment.

‘There has to be a technical element, and we obviously wouldn’t be interested in providing bog cleaners,’ says Wood. ‘But we would take on the role of the prime contractor, because that is the direction in which our customers wish to go.’

It may sound futuristic, says Wood, but it will happen and it will happen sooner rather than later.