ABB CEO Affirms Commitment to Responsible Growth

Investments in software, R&D to drive focused growth for power and automation leader

By Mike Bacidore

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Software has become a key enabler of both automation and power capabilities, and for ABB it represents a significant part of the $10 billion capital investment the company has made in North America over the past five years. Software and services capabilities, together with an unwavering commitment to research and development (R&D), will be engines of growth in the years to come.

"More than half of our offerings today are software-based," said Ulrich Spiesshofer, CEO of ABB, in his keynote address to ABB Automation & Power World, being held this week in Houston. More than 8,000 attendees are expected to attend the week-long event, a record number representing a116% increase since the combined event was first held in 2009.

The ABB of today is heavily focused on "the build phase" of its customers' value chains, Spiesshofer said. In the future, the company plans to contribute more to its customers' planning and design efforts, with technical consulting and new software, as well as their operations efforts, with new software-based services and service management, said Spiesshofer.

Simplifying the message

With Spiesshofer at the helm, ABB and its 145,000 global employees understand their strengths and are positioning their brands for the future. "We are a very large corporation with a lot to offer," said Spiesshofer. "When I was elected by the board of directors, I called my mom to tell her, and she asked what ABB does. We need to be able to relate that in simple terms: We do power and automation for utilities, industry, and transport and infrastructure, and we do that globally. It also means being a leader in operational asset effectiveness and efficiency."

About 45% of ABB's business is in industry, with 35% in utilities and the remaining 20% in transport and infrastructure. The largest share of its revenue comes from the Asia, Middle East and Africa (AMEA) region at 37% and Europe at 34%; the Americas account for the other 29%.

Spiesshofer and his executive team have created five value pairs for running the company—safety & integrity, customer focus & quality, ownership & performance, innovation & speed, and collaboration & trust. "Where there's no safety or integrity guarantee, we will pull the plug and stop operation," explained Spiesshofer. "This is paramount and a key foundation."

Because of ABB's strong positioning in attractive markets, its plan is to maintain and nurture that position with profitable growth, relentless execution and business-led collaboration. "Profitable growth means shifting the center of gravity by strengthening competitiveness, driving organic growth momentum and lowering risk through incremental acquisitions and partnerships," said Spiesshofer. "The relentless execution comes from our leading operating model, linked strategy, performance management and compensation. And collaboration means simplifying how we work together by streamlining our market-focused organization and developing leadership." North America has seen significant growth for ABB with a 120% increase in sales and 125% uptick in employees from 2010 to 2014.

R&D fueling growth

ABB's growth in its markets also will be fueled by its R&D investments. The YuMi collaborative robot, which can work side-by-side with humans, is one of ABB's newer developments.

"It does not need a cage," explained Spiesshofer. "We've let the robot out of the cage to work together with people. A lot of people are afraid of robots and what they mean for jobs. But Japan, Korea and Germany, where the most robots are used, have the lowest unemployment rates."

ABB's contribution to the world at large is simple, said Spiesshofer. "We help to decouple economic growth from environmental impact," he said. "That means less energy per unit GDP and less pollution per unit of energy. That's one of the biggest challenges of mankind."