Episode Transcript
[00:00:03] Speaker A: Welcome to AINA Insights where prominent leaders and influencers shaping the industrial and industrial technology sector discuss topics that are critical for executives, boards and investors. INA Insights is brought to you by INA AI, a firm focused on working with industrial companies to make them unrivaled segment of ONE leaders. To learn more about INA AI, please visit our website at www.ina.AI.
[00:00:40] Speaker B: Welcome everyone to another episode of Titanium economy podcast by INA. My name is Akshay. I lead INA's commercial excellence practice. Today we have Oliver Bebock from ESAB. He's the global president of fabrication technology at ESAB, which is a welding and fabrication technology company. Globally, it's about $2.5 billion in revenue. Oliver has held multiple roles at ESAB.
He started with leading the Filamentals division, led the acquisition of Sandwick Welding Technologies, was the head of EMEA and Global Products.
Before that he was at Honeywell.
Last role you had was the Chief Marketing Officer for the Process Technology division at Honeywell. And before that you started your career at McKinsey.
We're very happy that you joined us today and very glad that you can make time.
[00:01:35] Speaker C: Well, all pleasure is mine. Thank you very much Akshay. Looking forward to our conversation.
[00:01:40] Speaker B: Awesome Oliver. To kick things off, I want to first dwell on your personal journey. You've held so many commercial and product team roles across ESAP Hotel Honeywell and then in your consulting career.
Just want to understand what has most shaped your view of what a high performing industrial commercial organization looks like.
[00:02:00] Speaker C: Good question. So I mean if I reflect back, I think early in my career when I was a consultant at McKinsey, I had the chance to start in consumer goods, believe it or not, and serve some very famous brands.
And what really impressed me at the time was the science that these companies put into understanding their customers, their buying behaviors, the pricing of their products based on different packages, different occasions, and the constant efforts that they put to keep their brands vibrant and exciting to their target audience.
And so when I move later to the industrial world and B2B, it felt to me that industrial companies at times don't fully appreciate that there is still a person, a decision maker of a group of decision maker on the other side of the buying decision.
And these person or group of persons still needs to be understood and convinced beyond the basic product attributes and price and so forth.
[00:03:08] Speaker B: Got it.
And that's an interesting thought. Now if you play back the last decade for industrials, how have you seen industrials players change their approach in sales and pricing?
[00:03:21] Speaker C: Well, what I have observed is that I've seen in the last 10 years or so. I'm getting older. But more and more industrial companies embrace commercial excellence. So it's a term that you maybe wouldn't have heard 10 years ago in many industrial companies. And now they understand that to be successful, they have to use commercial excellence, pricing excellence as a key lever, in addition to focusing on cost, competitiveness, operational excellence, or economies of scale.
[00:03:54] Speaker B: Got it. And then that horizon change is actually pretty impressive.
But if you think about a current role today, where do you still see breakdowns in how commercial teams operate?
[00:04:09] Speaker C: Well, I think there's still some disconnect between marketing, I would say engineering, innovation, engineering, product management, and the sales team.
The roles are somewhat well established, but I think that the teamwork can be pushed to the next level for greater effectiveness and efficiency. So, for instance, to give you a few examples, at times we debate about whose job is it to really do the customer and the market share analysis. Whose job is it to do the analytics on the customer side? And even if you can come to the conclusion that maybe it needs to be sales or sales ops, then it still begs the question about how do you really tie that with product marketing and product management.
[00:04:54] Speaker B: Got it. That's a very interesting thought. Right. So if I just take a step back. As industrials as a sector, as a whole, they have grown through and continue to go through acquisitions. Right.
Which leads to multiple legacy and siloed systems. Now, if you think about that construct, how has this impacted how commercial organizations work? And then what have some leading players done to sort of overcome these challenges?
[00:05:20] Speaker C: Yeah, I mean, at esap, we have pushed ourselves organically and definitely innovation is part of our core DNA. But we also have made quite a bit of acquisition. And it's really one of the things that we do to accelerate and compound our growth strategy.
When we look at M and A.
I think the question about commercial excellence and how to deploy the team has to be a key part of the integration roadmap.
Do you merge the commercial organizations and the channels or do you keep them separate? Or is the solution a kind of hybrid?
Another question that we ask ourselves is do we see in the acquired company strong commercial playbooks or CRM or tools that we want to keep, and how would they then fit with our DNA and our own tools? So I think that whole set of questions needs to be part of the integration thesis even before you close on the deal. And based on the answers to those questions before the deal and after you have closed the deal, then you have to Develop, that's what we do. We develop then the integration roadmaps to factor that in.
And so at esap, we did multiple acquisitions in the last three years. I think we did more than five acquisitions in different parts of the world, in different parts of our portfolio. And those questions really play a super critical part of how we integrate the company. So it really goes well beyond the traditional synergies on the cost side and the manufacturing footprint. It is about how do we really create an accelerated top line and what are the capabilities of the acquire company that we want to retain, that we want to protect, and how do we bring our own capabilities commercially to the company that is now part of the ESAP family.
[00:07:23] Speaker B: But I think, Oliver, that's an interesting thought around putting together companies with different culture systems and operating models.
In your view that you've gone through so many acquisitions, what cultural or organization barriers typically derail these commercial transformations in.
[00:07:42] Speaker C: Well, I think that the challenge for industrial companies, at least in my experience, is that you need to be good at many things.
Traditionally industrial companies needs to be good on manufacturing. So manufacturing excellence is critical. By the way, safety is typically number one and non negotiable supply chain excellence these days with the disruptions in the world, you better have a good supply chain and sourcing strategy and team. So you have a lot of must have or must do before you get to the commercial.
But in reality it depends on the acquisition.
But hopefully many of the acquisitions, the top line is part of the thesis and you absolutely want to see top line synergies.
[00:09:11] Speaker B: I think the other piece around integration has always been data, right? It's two companies coming together, different data systems.
In your view, what happens when back office systems don't really talk to frontline sales and they're not connected by clean real time data in any of you, what challenges have you seen in that front.
[00:09:32] Speaker C: Well, what I've seen in the front is that you basically have then a sales team that, that goes back to doing what they do best and stick to the relationship that they have nurtured and developed. And so it's hard to get the change that you are looking for.
And I think that data, if you have good data, it helps you to do an 8020 to really understand who are your biggest customer and biggest opportunities, where you already make profit and where should you nurture versus where should you go hunt. And so the data, I think the data is a catalyst, when looked at it properly, to basically drive the change and drive a strategy, a commercial strategy. I think, honestly, personally, I think that it's very hard to have a commercial strategy, a good one, without interaction and backup from the data.
[00:10:27] Speaker B: Got it.
I think shifting a lens to organization for a bit. Right. I think as you've integrated these companies, what changes have you made or wish you had made to the commercial teams as their structure, Talking about inside sales, channel management, key accounts, distribution teams and so on. So would like to understand like what changes have you made or you wish people made when they put these teams together?
[00:10:54] Speaker C: So what has changed now is that we have a playbook, we have a methodology anchored into rebx.
They think through some of the key questions about first the product portfolio. So I would say that's traditional. But what is the before and after on the product portfolio once it's merged, do we keep the brand separate?
How do we deal with the brands? But then on the commercial organization is what do we do with the channels? And so we have been much more diligent about thinking about what of the acquired company? Do we bring to our own channel? What is it that we leave out of our own channel because there might be channel conflict and what does it then mean for the commercial deployment? So it's not that we have a universal kind of answer because in fact, in the acquisitions that we have made, the answers were different based on where we saw the opportunity. But we are now much more systematic in asking ourselves those questions up front.
[00:12:54] Speaker B: That's pretty interesting. I think as you have and your organization has gotten prepared to service the customers better, we've also seen the buyers on the other side have gotten more sophisticated industrials.
In your view, what has changed?
How have customer expectations changed with regards to transparency, pricing and service?
[00:13:16] Speaker C: Yeah, it makes me smile because when we started the conversation I told you that I came from consumer goods way back when.
Industrial companies at the time were at least all about manufacturing centric.
And so I think that what has changed at least at ease up. And what I've seen in other companies is the buyer or the customer.
And I exaggerate maybe a little bit, but to make my point, but they want an Amazon type experience.
They are used to buy through Amazon at home or whatever and they expect the same level of easiness to do business with from a company like esap. And so that's really what I've seen.
They don't want to have to call their sales guys to figure out where the order is and whether it has ship. They want something on tip of their fingers that tells them, you know, first, you know, helps them to place an order or to get information about the products or the configurations. They want to be able to do the thing much more seamlessly and much faster. And in terms of shipping times and delivery times, Amazon has put a benchmark there that is very hard, you know, let's say for traditional companies to, to emulate. But that's the expectation. And so that's what I've seen.
The sophistication of the buyer is they want the easiness to do business with, they want the seamless interactions and they want an Amazon type experience.
[00:14:49] Speaker B: That is absolutely true. Amazon has spoiled us all on that topic. I wanted to shift to the question everybody has on their minds today, which is how is AI helping in this space? Right.
So I think about your sales product channel marketing. Could you talk to. How do you see. Where do you see the biggest benefit of AI today?
[00:15:14] Speaker C: Well, I think we are still at the early days, but I think that AI is starting to pop up everywhere.
And I do believe that AI is going to be and is actually for us we are starting to, to really implement several projects to change the way we do a lot of things commercially as well.
And so you know very well we have projects going on since you guys are helping us.
But it goes from. In our case we have many SKUs and a complex portfolio, complex in a good sense of the term. And the most rich, one of the richest in the industry.
But how do you help customers to really navigate the portfolio and make sure that they get the best configuration? So for instance, getting the information much quicker and make it easy to pick the right configuration is one thing that AI is unbelievably changing another thing. For instance, we had complaints at times that our website was also too complex and we put an AI agent in the last few months, I think it's been two, three months and it's unbelievable. I mean the AI agent helps basically people to navigate and find whatever they are looking for and even has got suggestions.
And the feedback that we get from users on the website is completely improved.
So that's another example. And then internally managing all the data, what we were talking about before, figuring out where we have opportunities commercially, what are the pricing outliers, that's also part of it. So it's a way to accelerate the data mining and not just the data mining, but coming up with basically finished.
[00:17:09] Speaker B: Products.
[00:17:11] Speaker C: In a great fashion. So what I also hope by the way is that it will free up the time from the sales guys that ultimately AI will be their best friend and enable them to go back to having them quality relationship with the customers. Because frankly speaking, if I look at my biggest frustration today before AI is that I think that at times our sales people spend too much time internally with our own internal processes and navigating the tracking of orders. And so if we can simplify and take that, if we can give that Amazon experience I was referring to earlier to our customers, but. But make it such that our sales guys don't have to interact too much doing it then it frees up time the sales team can spend on very meaningful things with the customer.
I think that the biggest opportunity for us is free of time of the sales guys to be with the customers.
[00:18:10] Speaker B: That's actually helpful in all of you. I just want to touch on the point you talked about.
The vast number of use cases from website to sales to pricing to configuration to customers. There's just so many AI use cases there.
In a world where budgets are constrained, data is not easily available everywhere skill sets are constrained.
How do you Suggest leaders look at which AI use cases to focus on versus not.
[00:18:40] Speaker C: Yeah, so in our case, what we have done is, is rather than chasing multiple AI opportunities, we have actually tried to select a few use cases where we saw bang for the buck where we had really pain points that we were not solving well, I would say traditionally and convince ourselves that AI could actually solve those pain points and case informed. I mean, maybe, but it's. You know that website example I gave you earlier? It's actually a real one because we already had reorganized the website multi different ways with different ways to enter the web to find the information.
Whatever we did, it was never good enough.
And then basically we said, okay, let's try that AI agent, which seems easy but took a little bit of effort and in fact that whole problem disappeared. I mean we reinvented the way to navigate our website and the whole cataloging doesn't matter anymore. And so that's an example. And so what I'm trying to illustrate is the fact that we took a few examples like that and show internally to ourselves that hey, this is a game changer and it works such that we could not only build some muscle and capabilities as we did that, starting from something concrete, but also show to our own team that no, no, this is something that is going to be helpful because frankly, that example that I gave and I can give you a few others just made our life easy. And so there is nobody complaining or threatened or afraid of using AI. Another thing that we did very early on, which I think everybody does these days now, but we are in so many countries, I think more than 100 countries in the world. We are truly global and we have so many languages. So all our technical manuals and all our website and all our communication had to be translated in I don't know how many languages, obviously more than I speak.
And so now it's on the tip of a button and by the way, with the quality, which is pretty remarkable. And I could check that in French versus English and it's like, whoa, it's even better than what I would have done. So things like that. So we have. And then the more we do, the deeper we go and you know, some of the more complex projects that we are working on right now.
But I think we were smart to start with early wins.
[00:21:14] Speaker B: That's truly impressive. I think as we think about, as you think about deploying AI, Right. I think the core question for you is like what do you think should.
[00:21:24] Speaker C: Be.
[00:21:27] Speaker B: Available as base infrastructure or what should be true in terms of data Quality, system integration and IT maturity that helps you deploy AI better. And then what change management mistakes have you seen that typically end up derailing AI? And how did you guys work around that so that adoption could be seen?
[00:21:46] Speaker C: Yeah, on the data what we had, and I don't think that we are unique, but as a global company we have multiple ERP systems and tons of data lakes a little bit everywhere in the world. And so one of the issue is that for AI you need to have a step change in the quality of the data that you have. You need to have not just data that is used for record keeping, but you need to have data that is connected with the story such that basically you can use that history to predict. And so you need a transformation on the way you manage data. So there is actually a little bit of some sweat that needs to be put to clean up the data internally to connect the data such that the data becomes somewhat intelligent or connected and then AI can do its magic and use the richness of the input to get to a very good output.
Otherwise it doesn't really work.
[00:22:52] Speaker B: Got it.
I think you already, I think ESAV is already making headways into using AI as you think about further enabling the sales organization you talk about AI should be a sales guy's friend.
What other commercial areas, upsides that you see that could be deployed for ESAP in the next few years through AI or through AI or any other.
I mean even outside AI? What else are you thinking are top priorities for esap?
[00:23:20] Speaker C: Yeah, well, I need to be careful not to give trade secrets here, But I think ESAP has been on a transformation journey for the last 10 years and we have made a lot of headwinds and transform multiple part of our business.
I would say the biggest transformation probably a few years ago that we are kind of coming to maturity now is really the transformation of the portfolio through innovation. So we really revamped the way we innovate and step up big time innovation through use of center of excellence, use of different parts of the world.
Stop inventing everything internally, but being very comfortable to partner with strategic partners and do open innovation. And so that journey, let's say it's never over, but it's like we came from nothing to a pretty good state. And so what I see going forward now, it's doing the same transformation on the commercial side. And I think it's the portfolio that we have.
I need to stay humble, but I think it's really unique in the industry.
The capabilities that we have with our 122 years of experience is also unique. And so for me the big opportunity is how do we leverage all that knowledge.
We have PhDs, metallurgists, we have the best lab and knowledge in some of the material science, in some of the equipment.
We have digital solutions that are really unique that nobody I think has got that connects a lot of things and helps customer potentially read the bottleneck their welding operations. So how do we take all that knowledge that we have and bring it to the customer to really help the customer to solve their problem, which is typically they have. Welding is a pain point. They don't have enough welders. They have productivity issues that they don't even know that they have. So how do we let them benefit from the richness of what ESAP has to offer for them to really improve their operations?
And so we have the capabilities when we deploy them. I can see tremendous impact that we have on customers. For instance, to give you some numbers, multiple cases where we reduce or we improve the welding time by more than 15% at customers, which if you think about it, it means that if they have welder shortages, suddenly they might need 15% less welders. And we have seen cases like that. So we have tremendous success stories.
And so the question is how do we become systematic and trade on salesforce and the salesforce. We have a good salesforce, but how do we push them to the next level?
We need to make them AI efficient, we need to simplify some of those internal processes to give it Amazon type experience and, and then we need to take all that richness of the portfolio that we developed and acquired to push ourselves to the next level. So a lot of challenges, but frankly a lot of opportunities. And what's also good about our industry is that the industry is still quite fragmented. There are still a lot of market share out there to go hunt for.
And so I think that we have just scratched the tip of the iceberg of the opportunities.
[00:26:45] Speaker B: Well, Oliver, that's, that's very interesting. There's a lot of things in, in the works for you guys and I'm like truly keen and excited to see where ESAB heads. Before we let you go. One parting thoughts. In your decades of experience that you had, what would be your advice to like early leaders who are starting off in commercial organizations?
[00:27:07] Speaker C: I, I think the, the best advice, maybe it's motherhood and apple pie, but is go see your customers.
Really free up the time to go see customers. Force yourself to go see customers with your team.
And especially if you are in a global role or international role, go travel different countries. Customers are still very regional in many industries. They still have different cultural twists that I think in a global role you need to understand.
And each time that I go see customers first, I'm always energized. I always learn something. It's always good.
And that's how you come back with good ideas of what you need to do differently, what your commercial strategy needs to be.
It has to be customer centric. And again, I think industrial as we talk have evolved and they are definitely more customer centric today than they maybe were 20 years ago. But there is still a propensity to be a little bit inward focused for many industrials and obviously you have to have your safety and your manufacturing well mastered. So it's all good. But go see the customer.
[00:28:20] Speaker B: Thank you. Well Oliver, thank you for your time, your insights and the time you spent with us has been truly engaging.
[00:28:26] Speaker C: Thank you.
[00:28:27] Speaker B: I wish you the best and look forward to what ESAB does in the coming days.
[00:28:30] Speaker C: And thanks for your help. Thank you.
[00:28:38] Speaker A: Thanks for listening to Aina Insights. Please visit Aina AI for more podcasts, publications and events on developments shaping the industrial and industrial technology sector.
