Our transformation is expressed in speed and agility21. May 2019 Published by Raphael Doerr
Gigaset is undergoing a rapid transformation. And that’s also attracting the interest of journalists and the media. Thorsten Garber recently interviewed Gigaset AG’s Chief Executive Officer Klaus Weßing for “return – The Magazine for Transformation and Turnaround.” You can read an excerpt from the interview here. The whole article can be read in the print magazine or, for a charge, under this link.
The former Siemens subsidiary Gigaset is just eleven years old. Yet its history has been shaped by transformation and turnaround – just like the changes in its technologies, says Gigaset’s Chief Executive Officer Klaus Weßing in an interview with the “return” magazine. Klaus Weßing has been CEO of Gigaset AG, which is headquartered in Munich and has its production plant in Bocholt, for more than three years.
return: Mr. Weßing, to be precise, Gigaset was founded just eleven years ago. Do you agree that you have experienced a great deal of transformation and turnaround in that short time?
Klaus Weßing: No, that statement is not true insofar as our predecessor organization was already established early on at Siemens, when it moved its manufacturing facilities from Berlin to Bocholt after the Second World War. So we merely underwent a change of name. Certainly, the major change in communication technologies compelled us to transform and turn ourselves around, a process that was accompanied by staff reductions. We achieved the turnaround by adapting, in particular our technologies. We created the W 48, the first phone for Deutsche Post here around 70 years ago, and now produce, among other things, complete communications systems for companies.
return: To return to the more recent past: Siemens decided in 2008 to focus on mechanical engineering and plant construction and sell its Home and Office Communication division after the group had previously shed its mobile communications and network arm. In hindsight: Might it have been a mistake to withdraw from the promising ICT business back then?
Klaus Weßing: Siemens positioned itself outside the ICT market in order to concentrate on infrastructure for industry. Looking back, I believe the move, which also included selling Gigaset, was a logical step toward streamlining the portfolio. Business in our industry is short-term and driven by innovation, while plant construction tends to be geared toward the long term.
return: History books might write about Gigaset that your company generated revenue of a billion euros with more than 2,000 employees in its heyday, but now its revenue is just 293 million with 900 employees. Is that a bitter process of shrinkage or a clear step toward rebuilding the company?
Klaus Weßing: It’s obviously a clear rebuilding of our company that enabled us to adapt to demand. Digitalization and automation in production are also contributing to that. We now make nine million units and growing; at our peak we made 14 million. So I wouldn’t call this adaptation a bitter process of shrinkage. Our falling revenue is due to the sharp decline in market prices – an average of three to eight percent a year – in our core business of cordless phones. In the product lifecycle, we assume there are two years with prices at a normal level as part of our pricing strategy, but then lower prices at the end …