With industrial pumps and valves, KSB has been ensuring efficient power generation from coal, gas and nuclear power plants worldwide for decades. But climate change is forcing the company to change its strategy. In an interview, Thomas Pabst, President Market Area Energy at KSB, explains where it should lead to and how it can succeed thanks to the Hoshin Kanri lean method.
In an interview with Thomas Pabst, President Market Area Energy at KSB
Mr. Pabst, in April 2023, the last three nuclear power plants in Germany were shut down. The federal government also wants to phase out coal by 2030, when most of the electricity will come from renewable energies. What influence does the German energy transition have on KSB?
The German market has been changing a lot for a while now because coal and nuclear power are no longer en vogue in this country. This has an impact on our business, but nothing dramatic, because we are positioned worldwide. Take the nuclear phase-out, for example: it’s a German phenomenon. Other countries, such as Poland, the Czech Republic and the Netherlands, are planning to get involved or are thinking about expanding again. Because nuclear energy is evolving. Generation 4 reactors, for example, are cooled by molten salt. KSB is investing in these new technologies in order to be able to play a leading role in this area.
President Market Area Energy
KSB SE & Co. KGaA
Does KSB also deal with business models and products for renewable energies?
Yes, KSB is committed to reducing global CO2 emissions. Renewable energy solutions are part of our strategy development, also with regard to countries that are not as far along in the energy transition as Germany. We are currently analyzing what opportunities renewable energies can bring us. But a lot is not yet tangible. For example, there are by far too less storage options for electricity from sun and wind. This makes energy availability volatile and prevents a reliable power supply. Although we do not yet know which technologies will be used for this, we want to generate 10% of sales via so-called New Solutions business models as early as 2027.
One thing is to set strategic goals, the other is to implement them consistently. Here, KSB got external help. How did the collaboration with Staufen come about?
We have already been cooperating with Staufen in other areas. Among other things, in 2019/2020, we started designing our process from offer to delivery according to lean principles. The current project is about the consistent implementation of our strategy change. We are convinced that Staufen creates the right balance between theory and practice. Together with the consultants, we have broken down the overall goals into annual goals. In this way, we can clearly state what our goal is, where we want to be in the long term and what the individual steps on the way to the goal look like.
How important was the external perspective of the consultants in this work?
As outsiders, the Staufen consultants look at our company in a different way. They question things critically and discuss them with us. At the same time, with their borad practical orientation, they ensure that when going through a process, all main criteria are taken into account. We couldn’t do all this alone in the hectic pace of operative business.
When did you first use Hoshin Kanri in strategy transition? What are the individual steps?
Over the past year, we have started to work out breakthrough targets and to break them down into annual targets for 2023. The first measures were started in February, including the detailed elaboration of the activities and their follow-up. This is the only way to determine at the end of the year where we stand and whether we will achieve our goals by 2027. Every month and a half, we also verify our progress in the steering committee – and correct our approach if necessary. So we are very agile here.
How do you take the employees with you on this journey?
By combining strategy implementation with practical orientation. With Hoshin Kanri, we use concrete examples to show how we implement the strategy. In this way, employees understand why we do things the way we do them and why we are rethinking Energy. Our claim today is “KSB Energy – powering a greener world”. It is important that employees are inspired by this spirit and that the entire organization moves away from the old ways of thinking. This enables us to reach new markets and also attract young talents.
Where do you want KSB’s energy division to be in five years?
We expect traditional business areas to decline. Nevertheless, we want to achieve slight growth. With New Solutions, we are planning to invest in product development, and we are also focusing heavily on digitized solutions in the energy network.
The company with headquarters in Frankenthal (Germany) is one of the leading suppliers of industrial pumps and valves. The name KSB is made up of the names of the founders: Johannes Klein, Friedrich Schanzlin and Jakob August Becker. The listed manufacturer has a global presence and employs around 16,000 people.