On the way to a digitalized future Aalto University Siemens Osakeyhtiö. Public Siemens Osakeyhtiö 2017

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1 On the way to a digitalized future Aalto University Siemens Osakeyhtiö Public Siemens Osakeyhtiö 2017 siemens.fi

2 Welcome to Siemensille For a safe visit Visiting Siemens Keep your visitor s badge visible. Parking space is available in front of the office building or across the road at the public city parking place. Please ask reception for the password for guest WiFi access. Smoking is allowed outside in designated areas. Taking photographs is allowed with permission only. Emergency instructions First-aid kit is available at reception. Call the emergency number 112 and guide the emergency team to the right place. Fire Press the fire alarm button or dial 112. Take the shortest route out. Exits routes are marked with green signs. Do not use the elevators. Assembly place is on the parking lot on Tarvonsalmenkatu. Page 2

3 Ingenuity for life Siemens creates value for customers, society and people Ingenuity for life is our promise to deliver value to customers, society and people. We fulfill this promise through the power of innovation and local competence. We create value together with customers through increased use of digital solutions. Electrification and automation make digitalization possible. Siemens acts as a reliable and responsible partner. Page 3

4 A sustainable future based on our long history 1855 Telegraph line from St. Petersburg to Helsinki 1920 The first automatic telephone exchange 1977 Automation of Loviisa 1 Power Plant 1997 Commissioning of Vuosaari B power plant 2009 First wind power order 2013 Order of 80 Vectron electric locomotives The first wind farm order 1847 Werner von Siemens ( ) invented the pointer telegraph and founded a company in Berlin Subsidiary established in Finland 1906 The first steam turbine in Tampere 1958 Turbine generator for the Vaskiluoto steam power plant in Vaasa Founding of Baltic subsidiaries 2003 Contract on the construction of the fifth nuclear power unit 2010 Contract for the Estlink 2 HVDC link 2014 Contract on the first electricity storage 2016 Contract for the first virtual power plant Page 4

5 A trendsetter for the digital world Solutions for electrification, automation and digitalization as well as expert services Key business priorities Intelligent infrastructure Future of manufacturing Sustainable energy Siemens companies Siemens Osakeyhtiö Siemens Osakeyhtiö Estonian Branch Siemens Osakeyhtiö Latvian Branch Siemens Osakeyhtiö Lithuanian Branch Siemens Financial Services AB Siemens Healthineers Key figures: Revenue 215 million Employees 534 Siemens Osakeyhtiö, founded in 1898 Core values Responsible Innovative Excellent Region: Finland, Estonia, Latvia and Lithuania Page 5

6 A customer-oriented portfolio Wind Power and Renewables Power and Gas Energy Management Building Technologies Mobility Digital Factory Process Industries and Drives Electrification Automation Digitalization Power Generation Services Page 6

7 Close to customers in 200 countries Global presence Revenue 80 billion Employees 351,000 Germany 10.7 billion 113,400 13% 32% Share of total worldwide Europe (excl. Germany), CIS, Africa, Middle East 31.1 billion 39% 102,300 29% Share of total worldwide Americas 22.7 billion 72,600 29% 21% Share of total worldwide Asia, Australia 15.1 billion 19% Share of total Revenue Employees as of 2016 All figures refer to continuing operations. CIS: Commonwealth of Independent States 62,700 18% worldwide Page 7

8 Innovation is our lifeblood Investment in research and development Inventions and patents securing our future 4.7 billion R&D expenditures in FY ,000 7,500 3,500 R&D employees 1 Inventions 1 Patent applications 1 1 In fiscal 2016 Employee figures as of 2016 Page 8

9 Megatrends are transforming our world Digitalization By 2020, the digital universe will reach 44 zettabytes a 10-fold increase from Urbanization In 2050, 70 per cent of the world s population will live in cities (2014: 54 %) 3 Demographic change The world s population will increase from 7.3 billion 2 people today to 9.6 billion 3 in Average life expectancy will then be 83 years 2 Globalization The volume of world trade nearly doubled between 2000 and Climate change In the summer of 2015, Earth s atmosphere had the highest CO 2 concentration in 800,000 years 4 Page 9

10 #1 Siemens The World's Top Regarded Companies 2017 Page 10

11 Place customers at the core! Make digitalization work! Company priorities 2018 Lead by example! Page 11

12 Performance Siemens We work in a different reality Complexity is around us - employees must manage demands of multiple stakeholders, which creates conflicting performance expectations Employees must effectively prioritize their work to create more value with the same resources Collaboration in networks gets more important and is hard to evaluate by the manager only More than 70% of all employees work in knowledge-related jobs driven by skills, attitude, empathy and ability to drive change. PMP must focus on developing these capabilities. Engagement strongly depends on trust. Managers become coaches, rather than evaluators. Page 12 * The title of a recent Deloitte study

13 How Manager acts as a coach Show interest Leadership is a hands on activity. A manager is a gardener, not merely a garden designer. Empower Listen Advice Encourage own reflection Leadership job is very demanding and it takes good techniques to make that job work. Page 13

14 Balanced Development Approach 10 % 20 % Formal Learning "Learning away from your desk and normal job, e.g. Trainings" People Experiences "Learning through collaborating with Others" Core Learning Programs Functional learnings Social skills trainings Web Based Trainings/eLearning offerings Participation in Workshops Receiving Mentoring and/or Coaching Shadowing Participation in networking programs and communities 70 % On-the-Job Development "Learning through targeted onthe-job development measures" Task/Job Rotation Acting as Mentor or Coach (experienced employees) Participation in Audits Act as a substitute Page 14

15 Performance Management becomes a Continuous Dialog From To Target setting Evaluation Feedback Continuous Dialog Activity level Activity level Begin cycle End cycle Begin cycle End cycle Managers are trained on how to complete steps, leading to a check-the-box mentality Real-time expectations and targets Real-time meaningful feedback to and from collaboration network (managers, peers, direct reports and others) Learning and Development is part of daily work Source: CEB Page 15

16 What is Continuous Dialog Feedback How are you performing? Goals Are you doing the right things? Aspirations Where do you want to go? Learning What can you develop now? Page 16

17 Potential Development mindset Every employee is a Talent Talents Employee is the main driver of development Potentials High Potentials Employee Owns & Drives Page 17 Manager Supports, Sponsors & Aligns Human Resources Supports & facilitates

18 The Culture of Service Initiative Our Methodology The Service Profit Chain Motivation : Focus area It is part of the SSP strategy to strengthen customer loyalty Internal service quality Employee satisfaction Employee retention External service value Customer satisfaction Customer loyalty Revenue growth Aligned with Siemens vision of establishing a culture of ownership Employee productivity Profitability Requirement from our customers that SSP deliver superior service and values What are the expectations : Establishing a change of mindset towards a culture of service across all SSP departments Focus on delivery values to our customers Align SSP improvement ideas with core values and guiding principles Focus and aligning activities which improve internal service quality, employee satisfaction and productivity Page 18

19 The Road to Service Culture Success factors of business How we want and will work? Competence Development Diversity of people as customers and team members Service culture in daily business 100 % satisfied customer Strategic Business Areas Core Values Guiding principles From Products to Services Recognizing and working with different kind of people Team Alignment andtrust Improve customer experience Critical Success Factors Competitive Advantage What does this mean in daily work for everyone 3 Core Value 9 Guiding Principles in practice What does it mean in daily work? How to ensure Execution? Customer Expectations and buying criterias How my Success is being measured in Service Business Key Competencies in my Work Role Diversity of people Guiding Principles I listen to my customers I share knowledge internally I do something positive for a colleague every day Web based training Team Alignment and Trust Guiding principles I respond promptly I pay attention to details I am part of a team How to ensure Customer Satisfaction Guiding Principles I deliver on what we promise. I take ownership of complaints and issues. I keep our customers informed Core Values; Responsible, Excellent, Innovative ; 9 Guiding Priciples Unrestricted Siemens External Osakeyhtiö Communication 2017 Employee Morale Internal Communication Customer Experience Page 19

20 Five elements create Ownership Page 20

21 Examples for Anchoring of Ownership Culture Werner von Siemens Award These company awards are a symbol of our emergence into a new era the era of electrification, automation, and digitalization. The era of Vision 2020 and Ownership culture. Ownership culture to be integrated in all relevant HR processes Performance evaluation Performance evaluation based on WHAT (target achievement) and HOW (adherence to Ownership culture criteria) Equity Business processes Attractiveness of Share Program for employees increased to foster Ownership culture through Equity ownership Business processes to reflect Ownership culture mindset Operating Model Operative skills Functional development development General Sales PLM and Production Project Management excellence innovation and logistics business excellence excellence excellence excellence Relevance 180 countries 50 BUs 272 Sites 75% of NCC ~200 CEOs 30,000 FTE 80,000 FTE 90,000 FTE 9,000 FTE Res- MB Member MB Member MB Member MB Member ponsi- bilities Board Board Board Board top + (new) Approach model stars stars stars stars New guiding Clear North Clear North Clear North Clear North CEO core Basic Basic Basic Basic methods transparency transparency transparency transparency Standardized Core Core Core Core methods processes processes processes processes CEO core and tools and tools and tools and tools messages Best practice Best practice Best practice Best practice Early sharing sharing sharing sharing warning Lighthouse Lighthouse Lighthouse Lighthouse indicators projects projects projects projects Aligned Aligned Aligned Aligned Aligned leadership people people people people development development development development development Incentive Incentive Incentive Incentive systems systems systems systems Directional Directional Directional Directional consulting consulting consulting consulting Strict operational core-model Workstream Workstream Workstream Workstream Service business excellence 40,000 FTE 21% Rev. MB Member Board Clear North stars Basic transparency Core processes and tools Best practice sharing Lighthouse projects Aligned people development Incentive systems Directional consulting Workstream Unrestricted Source: GM CESiemens Osakeyhtiö 2017 Page 21

22 Merging virtual and physical worlds Physical world Siemens installed base 300,000 safely connected systems Virtual world More than 17 TB operations data per month Autonomous fault recovery MES Cloud services Decision support CAx Traffic management Analytics Smart grids Digital factory Meter data management PLM Software Efficient buildings Neural networks Page 22

23 Smart data boost businesses Power plants and grids Transport Industry Buildings Buildings Billions of smart machines and appliances generate data. Big data Business competence Data analytics Technical competence Business Intelligence Business innovations Analytics competence Value creation Smart data The key to success is how that data can be used for adding business value for the customers. Page 23

24 Example: Siemens Building Technologies Technology: Services: Life Cycle Services Building Automation - Building Technologies System Integration Security Electronic Safety Systems Remote Services Fire Safety Fire Security Energy Efficiency Page 24

25 5 key characteristics Connect, Collect Analyze, Optimize & Communicate will drive continual savings Platform Apps Characteristics 1. Connect: Allow data to be extracted from systems, equipment and sensing devices 2. Collect Centralize data from multiple systems/sources 3. Analyze People & Technology use data to generate actionable information Metering BAS Weather Utility Market Pricing Drive Savings 4. Optimize People & technology enhance systems and operations based on actionable information 5. Communicate "Report" transparent results to various users Page 25

26 From Continuous Employee Development to Successful implementation of Strategy and Vision Identification of critical areas of skills and experties for today and for the future Creation of a competence matrix, including different skills sets for different roles, with target competence levels Identifying gaps between current level of competencies and target levels Implementation of development plans for teams/individuals PMP discussions Personal development plans Not a one-time excercise but an ongoing process and part of PMP Vision Startegy Success factor Critical areas of expertise Skills development plans Development plans for teams and individuals Page 26

27 DigiTrain: Internal Digital Readiness Program Page 27

28 Building Technologies: Organization Change From branch set up to lean functional organization Area Management Execution Comf Fire P M P M P M P M P M P M P M P M P M P M P M P M > 90 FTE Page 28

29 Example: Value Hacking Workflow Lead identification Proof of Concept Value concept creation Value-based offer Technical sales support Other methods? PoC priorisation Preliminary use case definition Technology validation Co-creation workshop Setup definition for value concept creation Service offer / contract based on joint targets of SOY and Customer Customer challenge Discover Define Develop Deliver Customer deliverable Page 29 Transition from use case to measurable customer value

30 Thank you. Page 30