The digital transformation and a wide range of societal trends are high on MANN+HUMMEL’s agenda. In this interview, Alfred Weber and Emese Weissenbacher talk about the challenges that lie ahead for the company.
Mr. Weber, Mrs. Weissenbacher, everyone’s talking about the digital transformation, the Internet of Things and Industry 4.0 are all around us, and the world is becoming ever more interconnected – our lives are changing at an astonishing pace. Is it too fast for MANN+HUMMEL?
Alfred Weber: Not at all. It’s true that the innumerable developments we’re seeing in the field of digitization are changing many things, for MANN+HUMMEL, too. These include new ways of working together and the strategic orientation of our company. But we can’t just sit back and hope that the world will wait for us. We also cannot think in terms of multi-year strategic cycles anymore. Instead, we need to work on many different projects at the same time, keeping multiple balls in the air. We’re aware of this and have adjusted to the rapid pace it demands.
Emese Weissenbacher: I can second that. It’s a very exciting time, with us tackling many different things at the same time. This doesn’t mean, however, that we don’t want to commit to one thing, rather the opposite: whatever comes our way – filtration is our business.
You mentioned the company’s strategic orientation. What strategy will MANN+HUMMEL be pursuing in the future to live up to its vision of Leadership in Filtration?
Weber: We set out our vision the way we did for a good reason. We’ve long since known that filtration is a key technology. Now we need to do more to communicate this view to the outside world. Many societal megatrends – health and environmental wareness, urbanization, changing mobility patterns – depend on filtration in one way or another. People want to breathe clean air, both outside and inside, they want to drink clean water and save resources. Filtration separates what’s useful from what’s harmful.
Filtration is our core area of expertise. We want to make this clear. We will develop new business models and tap into new areas of business. That will involve a transformation within the company. And this transformation is influenced by three key drivers: alternative transport solutions, the digital transformation and sustainability. On that basis, we’re now already working on a multitude of measures we’re fully convinced will move MANN+HUMMEL’s business forward.
Could you give us an example?
Weissenbacher: Last year, we opened the Internet of Things Lab in Singapore, which aims to introduce intelligent filtration solutions to the market. Our employees possess wide-ranging expertise in software and hardware development, data analysis and IT, which they can contribute to this rapidly changing environment. Then there’s the fact that the IoT Lab is very well integrated in our overall development network and also cooperates with external scientists, companies and start-ups. As a result, the additional expertise we require doesn’t need to be built up in-house.
Weber: This “partnership model” is also part of our company’s transformation. We have our own first-rate engineers and developers, of course; we continue to invest around four percent of our annual revenues in research and development; we hold over 3,000 patents and we constantly work on developing new ones. The difference, though, is that our key aim in the past was to generate all our knowledge within the company, whereas now we know that there are people and companies who can develop certain things faster and more efficiently than us. So that’s why we work together with external partners – to great success, if you look at the IoT Lab.
Filtration separates what’s useful from what’s harmful. Filtration is our core area of expertise.
In addition to working with external partners, internal cooperation is also changing. What will it be like in the future?
Weissenbacher: In the future, our work will be increasingly interconnected. National borders are already no longer an issue; we don’t need to be physically together in meetings. In part, even time differences are irrelevant. The coming generation is already more networked and well-informed than any before it. And that will shape the future of the company.
Weber: Irrespective of time difference and physical boundaries, the boundaries of our own jobs are not so clear-cut anymore. These days, an employee no longer exclusively works in one specific area but tends ssues. It’s no longer a question of what the next product will be, but rather of what the customer wants and what might be a new business model. That, too, requires a new way of thinking for us and our employees.
Weissenbacher: We’re aware that uncertainties may arise, at all levels of the company. What’s most important is to engage in a frank discussion of the topics that inspire us and how we intend to address them. Not least, it’s about seeing them as a challenge and an opportunity.
It’s not only societal trends or the digital transformation that are currently affecting the company’s direction. How do political or economic developments influence MANN+HUMMEL’s outlook? I’m thinking of Brexit, signs of protectionism in the new U.S. administration or slower growth in China and recession in Brazil.
Weissenbacher: We’re keeping an eye on these developments, but specific impacts on our business results are hard to predict. We see no reason to be worried. We’re used to thinking through scenarios and can adjust to changing conditions.
Weber: In general, it’s not necessarily a good thing that politics and legislation are increasingly assuming the roles of marketand customer. But if you look at the last 76 years of our company’s history, there was always something like this going on somewhere in the world. Even though many things are happening at the same time now, we’ve always been able to handle it. With our company spread over more than 70 locations, the likelihood of ideal conditions existing everywhere is relatively low. Our strategy therefore remains focused on growth and competitiveness.
We see the changes as an opportunity and are addressing them in a concerted effort.
In terms of competitiveness, it’s important to meet the high quality requirements of customers and business partners. These requirements have grown in recent years, not least due to corporate responsibility guidelines. How important is this topic at MANN+HUMMEL?
Weber: Throughout our company history, we’ve always actively embraced what is now defined as corporate responsibility: handling resources with care, treating employees in a fair and socially responsible way, protecting the environment around our locations, promoting partnerships with their cities and ultimately also achieving economic success. These requirements are nothing new. What we’re going to do now, though, is place these activities within a framework and realize them in the form of a strategy. We’re working very hard on this right now.
Growth and competitiveness were also the reasons behind the biggest transaction in the history of the company last year. On the acquisition of Affinia Group’s global filtration business, MANN+HUMMEL grew by 4,500 employees and 10 locations, and also greatly expanded its product range. Looking back, what’s your view of the acquisition?
Weissenbacher: The acquisition has turned MANN+HUMMEL into a new company. It’s true that we didn’t have any experience of something on this scale. Essentially, though, the size of the acquisition doesn’t make any difference, as the procedure is always the same. We worked long and hard on this transaction, as we do on any acquisition. And the development of business has met our expectations in every respect.
Weber: At the end of the day, whether a merger of this type is successful or not is certainly down to the employees themselves. We were very warmly welcomed and accepted by our new colleagues, and both sides had a strong sense of pursuing a common goal: Leadership in Filtration. That made many things easier.
At last year’s annual results press conference, the forecast for the 2016 fiscal year looked rather subdued. Has it turned out that way?
Weissenbacher: We’re satisfied with our operating results for the fiscal year. The last quarter gave us a good boost and we managed to meet our forecasts.
What’s the outlook for 2017?
Weber: At present, 2017 is already a very exciting year. We’re keenly working on topics like the digital transformation, sustainability, growth and competitiveness, which will require a few changes. Growth without change isn’t possible – and the more than 20,000 drivers of change who work at our company know this, too. I’m sure we’re well on our way to making 2017 a success.