„Never miss a good crisis“
Global Task Force, local action
With roughly 19.000 employees spread across 56 countries, the pandemic hit your organization more severely than many others of a similar size. What was the initial impact of the COVID-19 crisis?
We had a couple of hiccups at the beginning, of course. But we started early to learn from the situation when we mobilized a local Task Force in China. Having confronted the challenges early, we were better prepared to face bigger questions like: How can we ensure that our entire organization can go online fully, if needed? Somehow, it was a privilege that we had these encounters so early. I know of other organizations that were not in that position and had to do a lot more groundwork suddenly.
How did you prepare the global company for the challenge?
When Covid-19 first hit, we formed an ad hoc global Task Force, which had members from many different functions. It was a mobilization of our global functions to ensure that we give enough support to the local Chinese leadership. For instance, our Chinese colleagues were in dire need of personal protective equipment. The global Task Force was the vehicle to ensure that our global purchasing organizations understood the need for them to step up. If China had just called on some junior buyer, the matter might not have received the attention that it required.
So, you had a local Task Force ‘on the ground’ and a global Task Force to answer the needs described?
Yes. We tried to match this local Task Force - global Task Force structure to ensure that we could amplify the signals and help the local team dealing with the challenge. That worked quite well for a while – until the pandemic crept nearer and closer to where we have our center of gravity, which is Europe. Suddenly, the demands grew and grew. It wasn't possible to handle them with an ad hoc Task Force anymore.
How did you adapt?
We figured that we need a more formalized structure. This was impacting the entire business and all employees. We set a clear ambition: Health and safety for our employees comes first. Business continuity is now second. We established a central structure, which we called the “nerve centre”. The nerve centre ensured that we had clear global concepts and guidelines. But because countries took so many different paths or followed very different trajectories, the central nerve centre could not stand alone. So we mandated every country to create a Task Force, appointing one lead for that Task Force, who would be the receiver of these global concepts, and who would then be the decision making authority for how the country approaches its challenges.
The regional empowerment regarding decision making was crucial for us to stay agile and do the right thing.
Instead of just one central nerve center, you decided that every country should also have a nerve center of its own.
Yes, and as turned it out, that was exactly the right decision. The situation became too complex. You could have two countries with the exact same set of circumstances, but the authorities` response could be completely differently. There is no way you could handle that from a single nerve center. The regional empowerment regarding decision making was crucial for us to stay agile and do the right thing.
Shift to fully virtual interaction
It sounds like Grundfos handled the organizational shift and the empowerment of its regional structures well. What were the struggles?
The very beginning was a challenging time for mostly all employees. People were thrown into this uncertain situation, not only with concern for their own health or their families. But on top, they experienced the uncertainties relating to the economy, followed by the crucial question: "Will Grundfos survive? Will I have a job?" In that situation, we made this shift to fully virtual interaction for many of our employees. When taken together, this leads to the phenomenon that employees would basically sit down at their desk in their bedroom in the morning and be online for more hours than they would normally be active in the workplace.
Because they were afraid to be seen as not working enough.
Exactly. You have not trained a structure for what a virtual working day looks like. We got a lot of feedback from people that they were caught in this hamster wheel of just sitting in front of the screen. We actually ran a campaign early in spring to encourage, "This is a new way of working. Do find a way of structuring your day. Taking breaks is fine." We also ran a work from home health survey, where we just asked people: “During this past week, how did you feel?" We gave them the ability to just write open comments to explain why they felt as they felt.
You have not trained a structure for what a virtual working day looks like. We got a lot of feedback from people that they were caught in this hamster wheel of just sitting in front of the screen.
We had a quite high level of people feeling relatively good and unexpectedly good, but I also read several employees commenting "I miss my colleagues." We encouraged virtual coffee breaks and other informal interactions like that, not for control purposes but more for contact purposes. That seemed to have a positive effect.
Making sure everybody who works from home can connect to the company’s server is one issue – but Grundfos’ basic products are pumps. Your company relies on a working production and staff who cannot stay home.
Yes. There are functions that you cannot do virtually, so we basically kept our production running, implemented precautionary measures by organizing in zones, and making sure that there wasn't overlap between shifts and several other requirements to prevent spread of the disease. But even in production, you realize: You can interact! You can do a performance review and walk the factory floor even if the COO is based in Denmark and the factory floor that he wants to walk is in Mexico.
How did you do that?
Using an iPad, using the camera, and creativity. As tragic as the pandemic is, I think for a lot of people, it has also just been this huge learning opportunity, because all your defenses are down. There are things that you would have sworn you could not do without face-to-face interaction in the past. But because you were forced into this situation, you had more propensity to lean in and embrace this new way of working.
Even in production, you realize: You can interact! You can do a performance review and walk the factory floor even if the COO is based in Denmark and the factory floor that he wants to walk is in Mexico.
Conflict between front-line staff and decision makers
Did the gap between the situation for employees in the office and employees in the production become an issue? For someone in production it could look like "well, we have to be out here, meanwhile the pencil pushers sit at home".
That is a good observation, which has been prevalent in the public debate in terms of what is actually fair and equitable practices for an organization: the front line people who had no choice but to go to work, and then the rest of us, hiding in safety inside the walls of our homes. But in Grundfos, that was no big topic, to be honest. Our major topic was: "Are we, as an employer, doing enough to protect our front-line staff?" This question becomes more urgent when you have a situation like in France, were the police stopped people in the streets with masks and machine pistols and questioned them: “Why are you not staying home?” If your staff experiences such a situation, that makes them question their employer: "Can you really guarantee that you're providing me with a safe working environment where I will not be unnecessarily exposed to the virus?" I think that's the most conflict we've had, which is not necessarily a conflict between office and production, but between front-line staff and decision makers.
The conflicts aside – do you see any achievements or learnings for Grundfos, which might not have been possible without this situation?
Yes, several. We took inspiration from the saying, "Never miss a good crisis": Never miss a good crisis to take learnings and understand how you can potentially do better. One of these learnings I have already mentioned: The empowerment of our local structures, together with the embedding of the local Task Forces was a great learning experience for us. We are in the middle of a huge organizational transformation. Whilst we still stay functional in the top team right now, we are moving to a customer segmented structure. This experience with Corona has been a great practice ground to pursue important questions: How can you still have functional oversight – but empower a local organization to act in accordance with your values, following global guidance? And the answer which we learned is, we will continue with a country lead. We understood how important it is, both in a legal and a cultural perspective, to have somebody continuously who is accountable for what has been orchestrated as a company, as an employer within a country.
This experience with Corona has been a great practice ground to pursue important questions: How can you still have functional oversight – but empower a local organization to act in accordance with your values, following global guidance?
Digital interaction with customers
What other experiences provided learnings for the organization?
We had a whole project tackle this question: “What can we learn from COVID?” The next finding, which is also the most urgent opportunity for us to act is, that this is a unique opportunity to accelerate the digital interactions with our customers. There is an openness, and a chance for using digital interactions, so let's take advantage of that.
COVID has also taught us that we can be much more flexible in terms of the conditions that we're offering employees. We want to re-think our collaboration culture. What is virtual collaboration useful for? When will we go by the book and when should we be flexible? When are face-to-face-interactions at need? And when you actually go to the office – what kind of work should you do there?
We want to re-think our collaboration culture. What is virtual collaboration useful for? When will we go by the book and when should we be flexible?
One answer is already clear: Not every kind of work needs to be done in the office. You could work from home; you could work from a client location or customer location. It does not have to be your designated desk. We, as an organization, still believe in face-to-face interactions as a meaningful way of creating the outcomes together. But what does that translate into in terms of our office space and the kind of space you make available to then create these outcomes? How can we become more intentional about the kind of work we do where? These are some of important questions I take with me from these times.