Siemens’ Challenges

 

Vocabulary

turbine	flagship	competitive
veil	turmoil	headquarters
CEO	offshore	take his place
deep	reinvent	turn out (2)
fired	platform	innovation
persist	approve	that’s the case
series	tight (2)	cut its loses
slap	buy out	integration
grid	power grid	anonymous
schedule	plague (2)	bureaucracy
pioneer	consultant	make sense
go bust	timetable	bite off more than you can chew
panel	venture	late to the party
unveil	outsource	concentrate
helm	succession	advantage
on board	maintain

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Video

Transcript

The Sky Train in Bangkok, one of Siemens many flagship projects around the globe.

A gas turbine plant in Berlin.

In Moscow, the unveiling of a new high-speed train line.

But in Siemen’s headquarters in Munich, Germany’s engineering giant has been in turmoil.

Peter Loscher was fired as CEO, and Chief Financial Officer, Joe Kaeser chosen to take his place.

Joe Kaeser, Siemens CEO: “For me, it’s important to see it as a new start: a new start for a new task.”

Siemens needs to reinvent itself — and these two believe they know how.

Daniel Rother and Ahmet Acar are management consultants.

They say companies have to forget their old ways of doing business.

And that also applies to chief executives.

Ahmet Acar, Ingosu Innovation Consulting: “When you look at what people are saying about Siemens anonymously, the bureaucracy is too slow.

That’s always the case with large companies.

But when it gets to the point that problems persist, and you have so much technology sitting in the drawer that you can’t put onto the market . . . then you’re not making progress.”

An example, the new ICE high-speed trains. Though long finished, they still haven’t been approved.

The timetable was too tight, and there were a series of problems — even after Siemens bought out the company that developed them.

Ahmet Acar, Ingosu Innovation Consulting: “You can’t just buy a company, slap it, and hope that somehow everything works: the integration of new business units didn’t seem to have worked.”

Another problem area, the offshore wind power unit. Siemens makes deepwater platforms, as well as the wind turbines.

But there are difficulties connecting them to the power grid.

The project has been plagued with technical and scheduling problems, leading to huge losses.

Did Siemens bite off more than it could chew with two platforms?

Daniel Rother, Ingosu Innovation Consultation: “When you’re taking on two pioneer projects, it would have made more sense to do one after the other, or do them in small steps.”

You complete one platform and learn lessons for the second.

But pioneer projects always come with mistakes. Or things don’t turn out how you planned.”

The solar unit is a third problem.

Siemens was late to the party, only to realize the Chinese are cheaper.

After many German firms went bust, Siemens tried to cut its losses — but was too late. And the failed venture cost €800 million.

Daniel Rother, Ingosu Innovation Consultation: “Solar panels and everything else that’s easy to copy should be outsourced. They should concentrate on high-tech things like offshore planning and platforms.

Because it’s not easy to maintain that advantage in innovation.

You have to keep pushing it along.”

So it was out with the old boss; in with the new.

The succession presents Siemens with the opportunity to change.

But our consultants say Kaeser needs a good team around him.

Ahmet Acar, Ingosu Innovation Consultation: “The new man at the helm has to get everyone else on board: he can’t just sit up there with two others in the boat.

Everyone else has to get on board . . . so top management is working together.”

The global market is growing more and more competitive. And even Siemens has to move with the times.

Questions

1. Siemens only produces high-speed trains. Is this right or wrong?

2. Has Siemens always been 100% successful?

3. Are Daniel Rother and Ahmet Acar Siemens managers? Who are they?

4. There is too much bureaucracy at Siemens. Yes or no? Is this a surprise? Did the marketing director announce this?

5. Is one of Siemens’ problems lack of innovation, new ideas and inventions?

6. Once a company takes over or merges with another company, everything will automatically be integrated and synergized. True or false?

7. “Siemens bit off more than it could chew.” What does this mean? Should they build two pioneering project simultaneously?

8. Siemens should have tried to build solar panels more quickly and efficiently. What do the experts think?

9. Do the consultants advocate a rigid, hierarchal system or something flatter and more horizontal?

 

A. Are there lots of German companies in operation in your country?

B. Is there significant trade between your country and Germany?

C. I was surprised to hear about Siemens having problems. Yes or no?

D. Would it be easy, medium-difficult or very difficult for Siemens and other large corporations to change and adapt?

E. Do you think Siemens listens to the two management consultants?

F. Would you or your friends like to work at Siemens?

G. What may happen in the future?