Siemens HistoryHistory • Foundation of Siemens & Halske Telegraph Company.Löscher 1847Project: Evolution • Many successful Subsidiaries (e.g. Russia andImplementation & England).Deployment 1885 • Halske leaves.Siemens TodayFuture • First Transatlantic Cable. • First dynamo generator.LöscherLeadership 1866Conclusion • Many Breakthroughs, 82,000 Employees. • Expansion to Shanghai. 1924
Siemens HistoryHistory • Several Breakthroughs, more advancedLöscher technologies.Project: Evolution 1930-70 • Business expansion and subsidiaries everywhere.Implementation &Deployment • Foreign sales exceeds domestic sales.Siemens Today 1976FutureLöscherLeadership • Heinrich von Pierer as new CEOConclusion • Major Restructure. 1992
Supervisory Board Managing Board Corporate Executive Committee ( CEC )Automation & Information & Power Transportation Medical Lighting Control Communications Divisions & Subdivisions Regional companies, Representatives & Agencies ( Regional Units )
Main Items of Siemens StructureHistory Solution-Focused Technology Firm.Löscher Local Responsiveness.Project: Evolution Mr/Mrs. SiemensImplementation &Deployment Team Based Decision.Siemens Today decision based on mutual agreement and shared responsibility between CEO & CFO (Four EyesFuture Principle).LöscherLeadershipConclusion
Klaus KleinfeldHistory Started on 2005.Löscher “We commit to do something, and we deliver.”Project: Evolution Target: improving profit margin by doubling ROIImplementation &Deployment ( S: 273% GE: 423% )Siemens Today Initiatives: Fit4MoreFuture Divest unprofitableLöscherLeadership businesses e.g. mobilesConclusion Focus on megatrends Siemens One Project
The Fall of KleinfeldHistory Most hated corporate boss, despite aggressiveLöscher internal earning targetsProject: Evolution Siemens Bribe Scandal Nov. 2006Implementation &Deployment - 1.6 billion $ fees and fines in EU & USSiemens Today - Kleinfeld didn’t make himself available forFuture extension on April 2007Löscher “In times like these, the company must needsLeadership clarity about its leadership”.Conclusion
Background on Peter LöscherHistoryLöscher Peter Löscher President and Chief Executive Officer of SiemensAGProject: • born on 1957, Austria.Evolution • married to a Spanish.Implementation • Has 3 children born in the US and Spain.& Deployment EducationSiemens Today Studied economics atVienna University of Economics and Business at theFuture Chinese University of Hong KongLöscherLeadership Vienna University of Economics and Business, MBAConclusion Harvard Business School,AMP Michigan State University,Honorary Doctorate of Engineering
Professional HistoryHistory 1985 Kienbaum und PartnerLöscher Senior Management Consultant 1988 Hoechst Group (merged with Rhone Poulenc Rohrer)Project: Various management positions in Spain, the U.S., Germany, the UK andEvolution Japan 2000 Aventis Pharma Ltd., JapanImplementation& Deployment Chairman, President and CEO 2002 Amersham plc, UK (acquired by General Electric)Siemens Today President of Amersham Health and Member of the Board of Directors (UK)Future Chief Operating Officer and Member of the Board of Directors (UK) 2004 General Electric Company (GE)LöscherLeadership President and CEO of GE Healthcare Bio-Sciences. GE Healthcare (UK) Member of the Executive BoardConclusion 2006 Merck & Co., Inc. President of Global Human Health July 2007 Siemens AG President and Chief Executive Officer
Project: Siemens EvolutionHistoryLöscher Definition of the Goals by Löscher: Löscher knew, defined and prioritized his goals as CEOs:Project:Evolution Highest Priority and Main goal was to tackle down the scandal.Implementation “Making it really Clear that Siemens doesnt have a cultural issue”& Deployment “Needed someone from the outside and to really trust”Siemens TodayFuture Deal with the Outsider normal reaction within the company. “Siemens will continue with an Evolution not a Revolution”LöscherLeadership Understanding Siemens and the needs for a change.Conclusion Changing the attitude of the employees toward the company.
Project: Siemens EvolutionHistoryLöscher Assessment and planning by Löscher: Löscher spent his first 100 days in Siemens visiting the company’s locationsProject: around the world.Evolution • Understanding the culture in Siemens, the company’s structure and the majorImplementation markets they operated in& Deployment • Meeting customers • Obtaining feedback and Input as a resultSiemens Today He assessed the company’s major strength and leveraged on them.FutureLöscher • A proud companyLeadership • Great engineering culture • Great innovation cultureConclusion • Right strategy • Global presence • Excellent Competitor in the market • Pioneers in all the fields they operated in
Project: Siemens EvolutionHistoryLöscher Assessment and planning by Löscher:Project:Evolution He also Evaluated the company’s weaknesses :Implementation A company in shock and a leadership crisis due to scandal& Deployment Highly segmented structure with over 12 operating groupsSiemens TodayFuture in 6 different business areas.Löscher No coordination between operating groups (global businessLeadershipConclusion units) and regional units, and no clear guidelines for decision making.
Project: Siemens EvolutionHistoryLöscher Four eye principle (CEO +CFO reporting to same CECProject: member)Evolution Previous management style that created an aggressiveImplementation& Deployment target oriented culture but with minimal value forSiemens Today employees. Which mainly led to Kleinfeld earning title ofFuture “most hated corporate boss” by financial timesLöscher Deutschland.LeadershipConclusion Low morale and low control and aggressiveness to achieve goals may have led to the bribery scandal.
Project: Siemens EvolutionHistory Löscher needed to act fast, to overcome the shock that overtookLöscher the company from the bribery scandal which was mainly the mostProject:Evolution prioritized of his goal. Other Important GoalsImplementation& Deployment Building up his a team he trusted that will be able to assist him achieve his goals efficiently.Siemens TodayFuture Creating a new managing board that understands the changes that need to be done.LöscherLeadership Enabling defined goals setting using the “True North” concept Empowerment, Motivation and Confidence of EmployeesConclusion Complete Company Structure change
Project: Siemens EvolutionHistoryLöscher Implementation and deployment by LöscherProject:Evolution Established an organization with a dedicated member of the board for legal and compliance.Implementation& Deployment Assigned Peter Solssmen who worked closely with him in GE as general counsel to lead future compliance programs.Siemens TodayFuture The main objectives were transparency to reestablish trust from the community and clear Siemens name.LöscherLeadership An appraisal of all executive management personnel wasConclusion done and all but two Managing board members were replaced.
Project: Siemens EvolutionImplementation and deployment by Löscher:
Project: Siemens EvolutionImplementation and deployment by Löscher
Implementation and deployment by LöscherHistoryLöscher A lot of the heads of operating group and divisionsProject:Evolution were replacedImplementation& Deployment CEOs for each sector were assigned. He removed the four eye principle and introduced theSiemens TodayFuture CEO principleLöscher Changing the culture of the company, along with theLeadershipConclusion corporate structure
Implementation and deployment by LöscherHistoryLöscher Introduced clusters, grouping 190 countries SiemensProject:Evolution operated in into 17 regional units.Implementation& Deployment Simplified reporting Introducing the right of way concept including theSiemens TodayFuture global business and regional units, to enable easierLöscher decision making.LeadershipConclusion Enabled the company to set clear goals and objectives more efficiently.
Comparison between before and after LöscherHistoryLöscher Before Loescher After LoescherProject: Evolution Organization structure •Very complex •Simpler •Lacks proper •Clear chain ofImplementation & delegation commandDeployment •Clear delegation ofSiemens Today authority Management style Aggressive target Goal driven oriented management Future orientedFuture more on the “X”Löscher management styleLeadership Culture De motivated Siemens became aConclusion employees driven only place where by targets employees’ feedback is appreciated
Comparison between before and after LöscherHistoryLöscher Before Loescher After LoescherProject: Evolution Decision making Very complex “ the Simple and clear “The process Four eye concept” CEO Concept”Implementation & Planning Harsh financial targets Very future orientedDeployment were set as the main and based on feedbackSiemens Today priority. from the market, employees and customersFuture Customer involvement Satisfactory Customer wasLöscher integrated into SiemensLeadership priorities , whereby Siemens became moreConclusion of a partner to their customer rather than a supplier or service provider.
Siemens and the FutureHistoryLöscher Siemens understanding of sustainability:Project:Evolution •Cornerstone of their value •Focused Entrepreneurial Responsibility “Key Pillar of Strategy”Implementation •Profitable Long Term& Deployment •Responsible value creationSiemens TodayFuture Siemens sustainability DefinitionLöscher “For us, sustainability means acting responsibly on behalf of futureLeadership generations to achieve economic, environmental and social progress”Conclusion
Siemens and the FutureHistoryLöscher Siemenss sustainability ProgramProject:Evolution Driving the Siemens Environmental Portfolio to minimize theirImplementation carbon footprint (analyzing energy efficiency)& DeploymentSiemens TodayFuture The Sustainability Advisory BoardLöscherLeadership Leading international representatives from the political, scientific and business areas.Conclusion
Siemens and the FutureHistoryLöscher Key Goals Current 2010 Targeted Fiscal yearProject:Evolution Help customers reduce 270 million tons 300 million tons their CO2 emissions Annually By 2011Implementation& DeploymentSiemens Today Grow Environmental € 28 billion € 40 billion Portfolio revenue By 2014Future Improve CO2 efficiency 17% 20 % (Increased from 9%) By 2011LöscherLeadership Increase water 29% 20%Conclusion consumption efficiency (Compared to 2009) By 2011
Löscher´s LeadershipHistory A little story he saysLöscher Löscher leadership career started with a golden piece of advice he uses ever since: ".... have fun, enjoy the things you do, and make sure thatProject: people are working with is equally enjoyable and things will happenEvolution automatically ..."Implementation& Deployment Another anecdote he remembers and Shares: Löscher remembers the one line of advised he requested from JackSiemens Today Welsch “Give It All”.FutureLöscher He advises to new Talented and Potential Leaders:Leadership Recognize how privileged a leader is, no matter whether/how young or old he/she is. “Live your dreams and make them real. However impact positively onConclusion others life”
Löscher´s LeadershipHistory Therefore we define Löschers leadership as:Löscher Cross-Cultural understandingProject: Quick Decision MakingEvolution StrategyImplementation Face to Face Contact& Deployment Customer ManagementSiemens Today Capacity to restructure Simplifying ReportingFuture Empowerment of Regional LeadershipLöscher MotivatorLeadership Mentor Excellent Political SkillsConclusion Excellent Social + Soft skills Performance and Responsibility Driver Visionary “Crisis => opportunity for huge changes”
Was Löscher Successful !History Gross ProfitLöscher 22.000 21.500 21.647Project: Traditional View:Evolution Löscher did his homework, 21.000 21.043 he increased Business results.Implementation 20.710 20.500& Deployment 20.000Siemens Today Income from 2008 2009 2010Future Operations Earnings per share 8000 5Löscher 4,54Leadership 6000 5811 4 4000 3891 3 2874 2,6Conclusion 2000 2 1,91 0 1 2008 2009 2010 0 2008 2009 2010
Project Success EvaluationHistory • The project was finalized in an appropriate time Project efficiency frame, based on the urgency of the situationLöscher without damaging financial performance.Project:Evolution • Customer became more integrated into Siemens Impact on customer .Implementation& DeploymentSiemens Today • A better working environment was created. Impact on team • Leadership skillsFuture • The culture change definitely benefited employeesLöscherLeadership • Siemens remains to be a very profitable business Business results and a viable player in the marketConclusion • Future competitiveness in the market with plans Preparation for the future that cover 10-20 years ahead