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GrundfosPumps Ltd.
This Case Study has been developed from a real submission document produced by Grundfos GB. We would like to
express our thanks to them for giving us this document as the basis for this case.
As this document is intended for training purposes, some of the information, including all of the results data, has been
changed.
SALES REVENUE
We offer our products to the market via different sales focussed teams
The UK is a mature market; to grow, we need to develop new opportunities
We operate closely with our Internal Partners, GBW, Grundfos Watermill and GEE, to maximise
customer value
COST CONTROL
The Management Team determine the market and product sales strategies, targets and goals. Planning is done annually
with a primary focus on existing and new product and marketing opportunities/conditions. Input is from Group Purpose
Statement, Group Business Development plans, the Sales team, market data, QMS feedback and trends, GBW,
legislative changes ECSS, EMS, Health and Safety, Key Customer inputs and Competitor Intelligence. Periodic
meetings withGrundfosGroup and RegionalManagement and business units are conducted to ensure alignment. Prior to
2009, businessplanning was visible via game plans now replaced by Strategy Maps and KPIs. . On occasions
extraordinary strategy meetings are required to ensure that focus is brought to bear on all issues that might need
additional input from other senior executives from within the Company.
One such meeting was held at Luton Hoo in May 2009 and was attended by Group Executive Vice President and
Regional Managing Director and members of the GPL Board. The purpose of the meeting was to consider the longer
term future of GPL and address the question How can we become a 200m business by 2020?
All our business sectors have very specific goals and tactics
that are steps towards our longer term strategic plans. To
remain focussed we monitor ourselves monthly against a
range of KPIs via Scorecards. Running in tandem with
these plans which are communicated to the whole business
(both in meetings and via INSITE as well as visually by
communication hubs around the offices) - we use the
principles / criterion from the Business Excellence model
and reflect these against our business objectives and results
in order to ensure that we are not simply applying but
actually living the values and principles it supports.
Sustainability
In our role within a global organisation, we fully understand our environmental responsibility and place as little
additional strain on the Earths already scarce resources as possible. Grundfos Pumps Ltd are in business for the long
term and therefore develop strategies that will fully support the on-going sustainability of both the business and the
energy efficient products for which our name has become synonymous. To support the Groups ambitions to optimise
energy processes wherever possible and the pledge to never emit more CO2 than in 2008, we are currently going
through the process of upgrading our plant room in our Leighton Buzzard office, including investigating air source heat
pumps to optimise energy consumption. We also measure utilities usage and we have achieved our own stretch targets
to reduce these, in particular our waste sent to landfill and waste recycling.
Taking a holistic approach has meant that we have developed a variety of strategies that work in harmony to create a
strengthening platform year-on-year on which to move forward. Our cradle to grave approach to all aspects of our
business means that we focus on many different aspects, including:
Offering variable speed pumps that use only as much energy as necessary
Creating renewable energy pump solutions, that utilise solar and wind power
Offering pumps that help nature along through, for example, reverse osmosis which processes sea water so it
can be used to augment precious fresh water supplies.
Using less raw materials within the manufacturing process
Guaranteeing the recyclability of pumps and their components at the end of their natural life
Ensuring offices meet the highest standards and gain certification to uphold this
Setting targets for reducing our use of electricity, gas, water and chemicals usedthroughout the business
Reducing the number of work related accidents and near misses
Maintaining a high internal profile by encouraging all staff to contribute to our company suggestion scheme
Promoting best practise through consistent communication, with staff, stakeholders and our industry media
Undertaking regular research with customers, industry & trade bodies and employees to attain views
Constantly revisiting the plan do - check act (RADAR) cycle.
It is our multi-faceted approach to our business that we believe is unique to us. We constantly assess and benchmark
ourselves both within the Grundfos Group, our industry as well as within the wider business community and we also see
this as being a very important measurement structure to continue to drive the business forward both for now as well as
into the next decade.
We are constantly reviewing the business to ensure it is fit for purpose. To support the 2010 to 2014
Strategy, we refined our organisational structure. Changes included:
Development of a bespoke Marketing team
The creation of Product Manager roles
Creation of a CSU support unit within Operations
The Group decision to develop a Financial Shared Service Centre in Hungary (opened in 2011) enabled
investment in a more highly skilled, professionally qualified, local finance team, allowing Finance to act more
as a Commercial team supporting Sales and assist with commercial decisions as well as reviewing the role
of our internal and external sales functions.
Ultimately all businesses must judge themselves by their most tangible results their turnover, profit and working
capital. When we first started trading in the UK in 1964, it would have been impossible to envisage the multi-platform
company that would emerge 45 years later. Since 1975, we have doubled our turnover every 10 years. We aim to
achieve our goal of becoming a 200 million company by 2020.
1. Leadership
The Management Team determine the market and product sales strategies, targets and goals. Planning is done annually
with a primary focus on existing and new product and marketing opportunities/conditions. The plans, and our progress
against them, is visualised via our Strategy Map and KPI Reporting.
As a company we follow the Grundfos purpose statement and actively support and encourage the use of the six
Grundfos Value statements (see below). These revitalised Values were launched on 20th June 2011; GPL staff joined
together with other UK employees to become part of a global launch with 17,000 colleagues participating in 1,200
workshops speaking 93 languages, all within a 24 hour period. Every individual employee received a personal invitation
to, not only take part, but to discuss the values and what they mean to them As a result of the day video clips and text
statements have been uploaded to a company-wide web site for all staff to access. Staff at Leighton Buzzard, with our
General Manager leading the proceedings, enthusiastically took part in all the workshops and shared their views with
their colleagues both in the UK and across the world. Another hit was the pig roast that was laid on by the company at
lunchtime which also met with a great reception!
Our local ambition is also simple; be the UK No.1 pump solutions provider of choice. An ambitionwe will continue
to relentlessly pursue by effectively promoting and selling our core portfolio as well as developing local products and
providing added value products to enable us to become a one stop shop in terms of knowledge, expertise and product
diversity.
Our mid-term goal is to become a 200 million company by 2020. To achieve this growth, we need all our managers to
focus more of their time on strategic issues and planning; this means empowering our people to effectively self-manage
the day to day operations and improvement.
Title
Description
1a1
1a2
Strategy
Development &
Communication
1a3
Shared
Leadership
Principles
1b1
Monthly
Management
Meetings
1b2
EFQM Status
Document (this
document)
1b3
Business Unit
Sales
Meetings
1c1
National Account
Management
1c2
Engagement with
Industry
Associations
1c3
Stakeholder
Mapping
Evidence
Available
The Grundfos
Values are
communicated via
our intranet,
INSITE.
Strategy Map in
Criteria 9
Annual Planning
Process (2c2)
Minutes are
available from the
Directors.
Market Insights
(2b2)
ECSS results
communicated on
Intranet and to
Line Managers by
SDs
Progress reports
are reviewed at
the QMM; these
are a key input to
our strategy
reviews.
The Stakeholder
Map is included in
criterion 8..
Key Customer
Plans (2c4), ECSS
Survey (5e1), ECSS
Results (see 6a)
Code of Conduct
Objectives
cascade (3.c.3)
Industry Insights
(2b3), Society
Survey (see 8a)
Stakeholder
Surveys (see 6a,
7a & 8a)
feedback mechanisms.
Title
Description
1d1
Aligning
Objectives
1d2
Talent
Development
1d3
Empowering
Operations
1d4
Embracing
Diversity
1e1
Change
Management
Skills
1e2
Divisional
Strategy Maps
1e3
Development
Projects
Evidence
Available
Examples of
completed EDDs
are available onsite.
The Talent
Development
program can be
explained on-site
by our HR Team.
Our culture of
empowerment is
best
demonstrated onsite.
EDD (3b1),
Leadership
Development
(3b3), Employee
Turnover (7b2)
Project Teams
(3c1), Involved in
Improvement
Teams (7a6)
Diversity is a topic
covered in the
Leadership
Development
Program.
Leadership
Development
(3b3)
The Change
Management
program can be
explained on-site
by our HR Team.
Top Management
(7a2)
Strategy Map
(2d1), Business
Warehouse (4e1)
Project Teams
(3c1), Project
Completed (9b6)
2.
Strategy
We have a 5 year strategic planning process to develop our mid-term strategy, derived from the long-term 10 year plan.
Both are done in cooperation with, and with inputs from, both Regional Management and Group Management. The 10
year plan defines the direction and high-level goals for the European Region. The 5 Year Plan defines strategic
initiatives which translate this direction into specific actions and objectives.
The output from the Luton Hoo meeting in 2009 formed the basis of our current 5 Year Strategic Plan (2010 to 2014).
To succeed in these objectives we must:
Maintain our market share in the core business whilst maximising profit margins
Develop Solutions and Consulting capabilities to expand into new and emerging markets
Develop Servicing Business to increase revenues from core business
Recruit, develop and retain high performing people
Title
Description
2a1
Annual Target
Letter
2a2
Market Signals
2a3
Industry Signals
2b1
Annual
Performance
Analysis
2b2
External
Assessments
2b3
Product Roadmap
2c1
Strategic Planning
Process
2c2
Annual Planning
Process
2c3
Policy
Development
2c4
Key Customer
Plans
Evidence
Available
The Annual Target
Letter and
associated
communications
are available from
the GM.
Copies of the
reports produced
are available from
our Marketing
Team.
Signals Reporting
(4e4)
Copies of the
reports produced
are available from
our Marketing
Team.
Signals Reporting
(4e4)
QMM Minutes
and Annual
Performance
Analysis Report is
available on-site.
Summary Report,
detailing the Best
Practices
identified, is
available on-site.
The Product
Roadmaps are
available on-site,
Business
Warehouse (4e1)
A copy of the
current 5 Year
Plan (2010 - 2014)
is available onsite.
The process is fully
documented in
the Business
Process Model.
Annual Planning
Process (2c1),
Strategy Maps
(2d1)
EFQM Status
Document (1b2)
Product
Development
(5b1)
Annual
Performance
Scorecard (2d3)
Policies are
published via
INSITE
Business Process
Model (5a1)
National Account
Management
(1c1)
Title
Description
2d1
Strategy Maps
2d2
Company
Conference
2d3
Annual
Performance
Scorecard
Evidence
Available
A copy of the GPL
Strategy Map is
included in
criterion 9.
Company
Conference
Attendance (7b6)
The Annual
Performance
Scorecard is on
INSITE.
Monthly
Management
Meetings (1b2)
3.
People
Title
Description
3a1
Employee
Motivation
Survey (EMS)
3a2
3a3
Recruitment
Process
3b1
Employee
Development
Dialogue (EDD)
3b2
Employee
Training
3b3
Leadership
Development
3b4
Investors in
People
3c1
Project Teams
Evidence
Available
Team reports and
resulting action
plans are available
on INSITE.
The process is
defined in the
Employee
Handbook,
available on
INSITE.
All individuals will
be able to share
their EDD on-site.
EDD Completion
(7b5), Follow Up
on EDD (7a4)
The Grundfos
Leadership
Development
program can be
explained on-site
by our HR Team.
Opportunities for
Development
(7a3)
Involved in
Improvement
Teams (7a6),
Projects
Completed (9b6)
Title
Description
3c2
FISH Suggestion
Scheme
3c3
Objectives
Cascade
3c4
Employee Pledge
Program
3d1
Internal
Communications
3d2
Works Council
3e1
Flexible Benefits
3e2
Bonus and
Rewards
3e3
Walk to Work
Scheme
3e4
Evidence
Available
Details of the FISH
Scheme can be
explained on-site.
EDD Completion
(7b5), Set Clear
Objectives (7a5)
Charity Donations
(8b6)
The different
channels used can
be seen on-site.
Questions
included in EMS
(3a1)
People
Satisfaction &
Motivation (7a1)
Questions
included in EMS
(3a1)
EDD Completion
(7b5), Questions
included in EMS
(3a1)
HSE Policy (4c1),
Walk to Work
scheme (8b5)
There is a
dedicated page on
INSITE explaining
the current
activities.
4.
We work very closely with GBW and Watermill with whom we interact closely as both a partner and a supplier. This
relationship is very important to us both, as is our relationship with GrundfosEuropump(GEE) both a partner and
service provider. We pioneered the concept of the Servicing Business for commercial customers, a model that is being
adopted world-wide by the Grundfos Group.
To achieve our strategic goal regarding servicing, we are reliant on upstream and downstream partnerships, as well as
internal development. For example, in the Domestic Market, we use the downstream expertise and capabilities of GEE
and upstream capacity of the Central Heating Services (CHS) service engineers to fulfil service contracts with key
customers. The UK has approximately 21 million households; with a market share of around 70% of circulator pumps
for central heating, there are approximately 15 million Grundfos pumps in British homes. CHS have over 6,000 service
engineers, covering the length & breadth of the UK. Utilising this capacity through a partnership, where we provide
central training and expertise, means we can provide effective service cover without significant investment in personnel.
We also received consolidated feedback from CHS on recurring issues with specific models, enabling us to feedback to
our manufacturing partners.
In 2011 we launched our revised
website, based on feedback
collected from different channels,
including account reviews and a
targeted on-line survey. One of
the objectives was to increase the
volume of sales through the web,
especially
to
dealers
and
distributors. This has significant
productivity benefits for us, which
are ultimately passed back to
customers through the reduction
in the costs of sales.
Our intranet, INSITE, has a
similar look and feel, based on the corporate branding, so our employees are familiar with the layout and can easily
support customer enquiries regarding the system.
Following the implementation of the new website in 2011, we increased total sales from less than 6% in 2009 to over
11%
by
the
end
of
2011.
Title
Description
4a1
Preferred
Suppliers
4a2
Servicing Partners
4a3
4b1
Annual Budget
Process
4b2
Credit Control
4b3
Stock
Management
4b4
Financial
Reporting
4c1
HSE Policy
Documents
4c2
Environmental
Management
System
4c3
Asset
Management
Evidence
Available
The process is fully
documented and
internally audited.
Minutes are
available from the
quarterly review
with GEE.
After-Sales
Support (6a6)
Minutes are
available from the
relevant owners.
Pump Industry
CSR Survey (8a)
The budgeting
process is full
documented and
can be explained
by our Finance
Team.
The credit control
process is full
documented and
can be explained
by our Finance
Team.
The final report
from the Project
Team is available
on-site.
Financial Results
and Targets (9a &
9b)
Financial Audit
Reports are
available on
request during the
site visit.
The policies are
published on
INSITE.
Business
Warehouse (4e1),
Financial Results
and Targets (9a &
9b)
Walk to Work
Scheme (8b5)
Environmental
Indicators (8b)
IT Policy (4d1),
Environmental
Indicators (8b)
Days Sales
Outstanding (9a6)
Stock Holding
(9b5)
Title
Description
4d1
IT Policy
4b2
SAP R3 System
4e1
Business
Warehouse
4e2
INSITE
4e3
Grundfos UK
Website
4e4
Signals Reporting
Evidence
Available
The IT Policy and
supporting plans
can be explained
on-site by our IT
Team.
Business
Warehouse (4e1)
The Business
Warehouse
system can be
demonstrated
during the site
visit.
INSITE will be
made available to
the assessors onsite.
The website
design &
operation can be
explained by our
IT Team.
Development
Projects (1e3),
Improvement
Projects (5e3)
Examples of
Signals Reports
are available onsite.
Customer Service
Unit (5e4), Signals
Reports (2a2, 2a3)
Questions in the
local EMS (3a1)
are used to review
INSITE.
Sales via Website
(6b6)
5.
The GPL Process Model is shown below. This has supported the organisational restructure, providing clarity on who
does what.
The UK market itself can be considered asmature and the audience with whom we interface conservative and
traditional. This brings both benefits and challenges for us. Benefits include being a very well established brand in the
HVAC market for both Domestic and Commercial markets. However, this works against us in the Wastewater market,
where companies more traditionally associated as specialist WW suppliers, have a larger share. Another challenge is
the very slow take-up of e-products in the UK (especially within the domestic sector only 7% at June 2011), partly
due to a lack of clarity, support and commitment from the UK Government, who continue to ignore the known benefits
that variable speed pumps offer despite our employing the services of a government lobbyist and actively encouraging
take up through our membership of the BPMA. We promote the benefits via the installer and merchant base, as well as
focussing on the actual end-user. However, this is a challenge we are focussed on and resolve to conquer before EuP
legislation forces the change which could result in damaging our market dominance within the HVAC sectors.
Although there is an Account Manager is place for Key Customers, our Account Management Model is set up to
achieve multiple contact points between our Sales Teams and the customer, rather than a single point of contact. This
provides additional information and insights, creating additional sales opportunities and identification of emerging
needs. These are fed back to the Account Manager and used in the Account Review process. It also ensures continuity
of the relationship if an individual leaves one of the parties involved.
Title
Description
Evidence
5a1
Business Process
Model
5a2
Process
Management
System
5a3
Improvement
Project Teams
5b1
Product
Development
Planning
5b2
Customer Terms
& Conditions
5b3
Product
Improvement
5c1
Marketing
Campaigns
5c2
Sales Excellence
Program
5c3
Promotion
through Training
Title
Available
The Business
Process Model can
be explained onsite.
Results
Process
Management
System (5a2)
ISO9001
Certification
Projects
Completed (9b6)
Minutes
from
these
meetings
are available onsite.
Details of the
servicing options
can be explained
by our Sales
Teams.
Customers with
Service Contract
(6b3), After Sales
Support (6a6)
Minutes from
these meetings
are available onsite.
Examples of
campaigns can be
explained by our
Marketing Teams.
Event Driven
Surveys (5e2),
Warranty Process
(5e3)
New Market Sales
(9a5), Share of
Voice (8a5)
The assessments
and resulting
action plans for
each sales area
are available on
INSITE.
The on-line
training platform
can be
demonstrated onsite.
Evidence
Available
Registered
eLearning Users
(6b2)
5d1
Supply Chain
Management
5d2
Customer
Segmentation
5d3
Webshop Sales
5d4
Logistics Planning
5d5
Service Contracts
5e1
ECSS Survey
5e2
Event Driven
Surveys
5e3
Warranty Process
5e4
Customer Service
Unit
Minutes from
these meetings
are available onsite.
Stock Holding
(9b6)
Market Share
(9a3, 9a4), Sales
Turnover (9a5,
9b3, 9b4)
On-Time Delivery
(6b1), Order
Handling &
Delivery (6a5)
Additional
Perception results
available on-site.
Customer Service
Unit (5e4)
Warranty Rate
(6b3)
6.
Customer Results
Through the use of the Strategy Map concept, we have been able to establish links between the internal process
perspective, the customer perspective and the overall business outcomes. This enables us to focus improvement actions
on the key processes which ultimately
drive the desired result; strengthening
our market share.
The addition of the Customer Service
Unit (CSU) in 2010 has strengthened
this understanding. They support the
analysis within the different Divisions,
helping them to understand these cause
and effect relationships and maximise
the impact of their improvement
projects and initiatives.
The Event Driven Surveys, which are
aligned to our key processes, provide
specific
feedback
to
drive
improvement. These are sent within 1
month of a specific event, for example,
a service visit, and the questions focus
on that specific experience. Sending the survey shortly after the event allows the customer to provide accurate
feedback, whilst it is still fresh in their mind. The data, both numerical and free text comments, from these surveys can
be segmented by customer group, as well as by process.
The bi-annual ECSS Survey, which is run at a global level by Grundfos Group, provides an overview of the customer
experience. The loyalty and image indices, which reflect the customers intention to repurchase, are leading indicators
for our future sales and market share. Targets are set at Group level. The survey enables benchmarking between
different Sales Companies in the Group, allowing us to compare our performance with others. From this comparison,
we identify which Sales Companies we would like to learn from. The Grundfos Business Excellence Cross-Company
assessments provide us with an ideal opportunity to visit these companies and really understand the approaches and
processes that are driving their results. All our Management Team and Senior Managers have attended the Grundfos
Internal Assessor Training and volunteer to participate in these assessments. The learning they bring back is discussed
at the QMM and improvement actions or projects agreed.
The Customer Image Index (6a1), Customer Loyalty Index (6a2) and Customer Satisfaction Index (6a3) are composites
of a number of different questions in the survey. These are the key measures used by Grundfos Group to compare
performance. Targets are set at Group level each year.
We compare our performance with Grundfos DK as they are considered the flagship sales company within the
Group. A number of our Management Team have been personally involved in Cross Company assessments in the last
5 years, which provides a unique opportunity to understand their approaches to managing customer relationships.
We continue to improve perception of our 3 core processes; Sales, Order Handling and After Sales Support. In the
ECSS 2010 survey,we were able to add local specific questions; 2 were aligned to gain feedback on service, used to
review performance with our service partner, GEE (see 6b4).
The On-Time Delivery (6b1) measures whether we deliver what is promised, when it was promised at the point of
ordering. The 95% target represents the service level agreement with GBW and the supply chain. Our event driven
survey indicates there is minimal impact on customer satisfaction if we keep them informed when potential delays
occur. The ECSS results support this (see 6a5). Despite the reduction in Stock Holding (see 9b5), our On-Time Delivery
has increased following the end-to-end supply chain process review. The growth of our service business (6b2) is key
driver of the growth in the Commercial market (9b4) and some of the new business (9a5).
The Warranty Rate (6b3) indicates product failures within the warranty period, whether this is fixed by an engineer or
not. Information about the failure is fed back to the original manufacturing unit and collated at Site and Group level
to identify potential issues with either a specific batch or a product line. The First Time Fix Rate (6b4) is used to
monitor performance of our servicing partner, GEE (see 4a2). Again, the target reflects the service level agreement.
Our website provides information, training and a sales portal for the indirect sales channel. We have been promoting
the eLearning platform to this group of customers since it was launched in 2009 and have seen a year on year growth
in its usage (6b5). Following the launch of the updated webshop in 2011, we have seen sales steadily increasing
through this channel (6b6) and our now considered as best in group.
7.
People Results
At Grundfos, we believe there is a virtuous circle that links business performance. If we have motivated, engaged
people, they will strive to deliver the highest possible levels of customer service. If customers receive an exceptional
service, they will repurchase themselves and they will recommend Grundfos to others. If more people are buying
Grundfos products, our business will grow. As Grundfos has no shareholders, any profit is invested in our future; new
product development, training our people and developing our organisational capabilities.
Once this cycle is established, it builds momentum. In Grundfos UK, we have built our future on the skills and talent of
our people. We invest in their development, both through formal training and on the job development opportunities,
such as involvement in improvement projects. Our people actively seek additional responsibilities and contribute their
ideas, through the FISH Suggestion Scheme, on how we can further strengthen our organisation.
The Employee Motivation Survey is conducted every 2 years (ref. 3a.1) and is used to determine our people
satisfaction in GPL. Economic conditions during 2009 & 2010, and the subsequent impact on Grundfos, led to a
number of aggressive cost reduction measures, including a recruitment freeze, pay freeze, benefits reduced, company
restructure and staff redundancies. These combined factors play a major role in the decline in the results in 2010,
which was also observed in the majority of Grundfos companies. We have implemented a number of improvements
since, which have contributed to the increase observed in most areas in 2012.
Targets guidelines had been communicated by Group to all companies in 2009; these targets state all companies
should be achieving satisfaction levels of 80% by 2014. For some of the key areas, including Top Management,
Following Up on EDD and Setting Clear Objectives, we have set targets increasing to 85%.
We have focused on reducing the differences between the Office & Field Based staff, especially regarding deployment
of target setting and the EDD (3a3 and 7b5). We encourage our people to join Project Teams (3c1) to drive
incremental and step-changes (7a6). Grundfos DK (Denmark) is chosen as the comparator as it is the highest scoring
Grundfos Sales company other than Grundfos UK.
The Skills Gap Analysis (3a2) is vital to understanding where training & development are required to achieve strategic
th
goals. We aim to have fully closed this gap by the 4 year of the strategic plan. As a small company, opportunities for
promotion are limited. However, there are opportunities for people to be promoted within Grundfos Group and we
actively encourage this career development pathway (3b3). Although Total Employee Turnover sometimes exceeds
the target of 6%, this is only when there are a high number of promotions within the Grundfos Group but outside GPL.
Management encourage innovation through our FISH suggestions scheme (7b3). A number of ideas have been
implemented and in 2011 one employees idea was shortlisted in the Future Innovations award by Group. The
suggestion scheme was updated and relaunched in 2011 with points make prizes including new format for assessment
of ideas via QMM, this resulted in increased engagement. The Employee of the Quarter scheme (7b4) is designed to
recognise outstanding achievements. We expect to receive around 10 nominations per quarter and encourage all
directors to ensure there is at least one nomination from their division each quarter.
The Employee Development Dialogue (3b2) and Annual Conference (2d2) are key to engaging and empowering our
people. We measure completion of the agreed training & development plans (7b5) and conference attendance (7b6).
We have focused on improving the deployment of these approaches for Field Based staff in the last 3 years.
8.
Society Results
In 2009, as part of the development of the strategy, we completed a stakeholder mapping exercise. In 2010, we
identified our approach to managing external stakeholders as one of the improvement projects from our self-assessment.
As part of this project the improvement team reviewed and updated this map. We then completed an exercise to
determine the communication requirements and ownership of each of these stakeholder groups. This process ensures
we maintain a dialogue with the key stakeholders, with defined channels and meetings.
One of the actions was to establish feedback mechanisms for the society stakeholders identified. In October 2010, we
launched the first Pump Industry CSR Survey to gather feedback from the industry and trade associations we work
with. The short, on-line survey was distributed via email. The survey focuses on the topics we promote through these
groups; environmental issues and influencing policy makers. We included the question Do you see Grundfos as the
industry leader for corporate responsibility? (see 8a4) to give us an indication of how we compare with our
competitors as benchmark data in this area is not available.
In 2010 we ran the first Pump Industry CSR Survey, targeting the trade & industry associations who we work with on a
regular basis. The data collected is used to highlight specific areas of interest within these groups, especially through
the free-comments sections, as well as give us feedback on how were perceived.
In 2011, we lead an industry working group to highlight the requirements under the EuP legislation and raise
awareness, both with the local government and within wholesalers. The legislation is designed to promote high
efficiency, low consumption pumps. The campaign we coordinated was highlighted in the survey as both informative
and appreciated.
The Share of Voice measure (8a5) is used to monitor the impact of our press releases and other PR activities. We
target a 65% share of all pump mentions in the national press and trade magazines. This helps increase our profile
and brand image as a trustworthy, reliable company. This is also one of the reasons we apply to external awards
(8a6), although there are a number of other benefits, including staff motivation and recognition.
We have 4 key environmental indicators, which are shown here. In 2008, we set targets of a 2% reduction per year,
with the aim of reducing our total environmental impact by 20% by 2020. Waste management is a fundamental part
of our Environmental Management System (4c2).
Both Energy Consumption (8b3) and Water Consumption (8b4) increased in 2010; this was mainly because the 2009
figure was exceptionally low due to reduced workload. Since then was have brought the trends back in line with
target, partly due to 3 FISH suggestions which were implemented in 2011 & 2012.
The Walk to Work programme was extended to encourage cycling to work, following a suggestion through the FISH
ideas scheme. The total number of participants has increased, although a number of those who were walking now
choose to cycle instead (see 8a5). Employee Donations are collected through the UK Government Payroll Giving
program (8b6). The amount pledged reduced in 2012 when the Government removed the tax-free status of this
scheme. We are currently investigating other tax-efficient mechanisms for charitable donations.
9. Business Results
10.
For our strategic plan, we develop a Strategy Map. The Annual Performance Scorecard is derived from this; translating
the high level themes into specific annual actions and objectives. The overall themes remain the same for the 5 year
period covered by the plan. However, the actions and objectives beneath each are reviewed annually and may change
as we progress, especially in the lower quadrants.
The monthly KPIs are compiled and discussed during the team meetings before being reviewed at the Monthly
Management Meetings (1b1), with supporting commentary and explanations from the relevant teams. The full
scorecard is collated quarterly and reviewed at the Quarterly Management Meeting (1d1). This includes progress
reports from the Development Projects (1e3).
Our Turnover (9a1) and Pre-Tax Profit (9a2) have recovered since the economic downturn began in 2008. This heavily
impacted sales in 2009 but has since recovered, in line with the targets set by Group. The standard Group Target for
Pre-Tax Profit is 10% of turnover; we are achieving this and are currently amongst the top 3 performing Sales
Companies in the Grundfos Group.
In 2008 and 2009, we noticed increased price sensitivity in the Domestic (9a3) and Commercial (9a4) markets. Instead
of competing on price, we focused on reinforcing the quality and reliability of our products through marketing
campaigns. We succeeded in increasing our domestic market share back over 70% in 2010 and have since maintained
this impressive share.
To achieve our growth targets, we need to develop new markets (9a5). We have increased the percentage of total
turnover coming from these new markets from under 5% in 2009 to nearly 9% in 2012. We are on target to achieve
our target of 10% turnover from new markets by 2013. During the financial crisis, we had to increase our focus on
credit control (4b2). The key measure we use to track the effectiveness of this process is the Days Sales Outstanding
(9b5). We have now brought this process back under control.
Through the financial crisis, we have focused on reducing expenses where possible, without compromising our sales or
servicing activities. Around 65% of our total costs are our Cost to Serve (9b2), including payroll, vehicles, equipment
and buildings, and the budget is calculated on this basis. In 2009, we were below budget as fewer people met their
sales targets; in 2012 we had the opposite.
We expect limited growth in the mature, domestic market (9b3). This is reflected in the flatter target, especially
compared to our ambitious growth targets (9a1). We expect to be able to continue to increase sales in the
commercial market as we move into project solutions and servicing in this area (9a4). Both markets are generating
turnover in line with our budget.
Targets for Development Project Completion (9b6) are tracked via the Annual Performance Scorecard. One project
over-ran in 2010 and completed in Q1 2011. We do not set targets for improvement projects as these are not part of
the annual planning process.