Monday, January 31, 2011

A Sustainable Business...

...Is a Competitive and Profitable One Too

Siemens offshore wind farm
Sustainability isn't just good for the Earth. It's also good for business too, as German multi-national Siemens clearly understands very well.
Siemens (SI) Chief Executive Officer Peter Löscher still recalls the blank stares he received when he asked about the company's green strategy after his arrival three years ago... Löscher knew that Siemens had world-class researchers and lots of promising products in the pipeline... Löscher's solution: "We very early focused on mega-trends" such as green business to assure the company's future... Löscher has increased the chunk of Siemens that sells sustainability-focused customers everything from light bulbs to high-speed trains to factory control systems.
Siemens is also a global leader in utility-scale solar and wind. About 100,000 of its workers are "green collar" according to the company.

Siemens is reaping the rewards from its restructuring but also from its prescient strategy," says Jutta Rosenbaum, an investment manager at insurer Allianz's Aequitas unit. "Siemens is very well positioned to achieve above-average growth."

The transformation has given a boost to Siemens' finances. Profits are at an all-time high, and shareholders are pocketing record dividends.
Löscher has been on the job three years. He admittedly had quite a bit to work with already at Siemens, but also had to overcome a huge bribery scandal at the company, as well as its ossified management. His rapid pivot and 48% rise in the stock price this year beg the question why hardly any US companies are pursuing a similar strategy. General Electric (GE) has some similarities, no surprise since that's where Löscher came from.

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