Values, Vision, Strategy

In 1855, it was Siemens that implemented the first major project in the history of telecommunications: a telegraph line between Finland and the Crimea, which transmitted information over a distance of several thousand kilometers. In 1874, it was Siemens that linked Europe to North America via a transatlantic cable. And today, it’s Siemens that has supplied the wind turbine for the world’s first floating wind farm, off the coast of Norway. Since floating turbines can be positioned with little regard to geographic factors, this truly pioneering project is creating undreamt-of opportunities for exploiting wind power on the high seas.

A pioneer of our time – this is our vision. To realize it, we’re continually rekindling our spirit of innovation to open up new perspectives for our company. Our innovative products and solutions are positioning us to tap new markets in which we can capture leading positions. This is our longstanding approach and – particularly when the going gets tough – our obligation. As Werner von Siemens noted back in 1857, “In critical situations, decisive and vigorous action is nearly always the best strategy.”

In addition, we adapted our management structure to the requirements of our revised portfolio by implementing the most comprehensive company reorganization in 20 years. For example, the CEO principle that we introduced for our top three management levels ensures that the responsibilities for all our business activities are clearly defined – the basic prerequisite for achieving a lean, rapid-response organization. To further foster our employees’ motivation, sense of personal responsibility and entrepreneurial commitment, we began offering our entire workforce – from non-management personnel to members of our Managing Board – greater opportunities to share in our company’s success. To ensure our competitiveness, we launched programs to boost the efficiency of our administrative and procurement processes. And these programs have proved successful – as the cost reductions we’ve achieved demonstrate. In other positive developments, we settled the lawsuits against our company quickly and successfully. We also set up compliance structures and processes that are now the benchmark for companies everywhere in the world.

In short, we took action to make our company faster, more efficient and more customer-centric. We’re an integrated technology company organized into four Sectors and a large number of Regional Companies, which are grouped, in turn, into 14 Regional Clusters. Our businesses are supported worldwide by tailor-made financial solutions. Our innovations are providing high-tech solutions to the challenges of our day. And our excellent employees, innovative strength, worldwide presence and strong brand identity are making us a trusted partner to our customers.

However, we’re not resting on our laurels. In keeping with the tradition inaugurated by Werner von Siemens, we’re convinced that if you’re not going forward, you’re going backward. The current financial and economic crisis is offering a world of opportunities that we intend to exploit arising opportunities.. Our goal is to achieve profitable long-term growth and outpace our competitors. But to reach this goal, three key conditions must first be fulfilled:

Our commitment to the DESERTEC initiative is an excellent example of our focus on innovation- and technology-driven growth markets. At Siemens, we have a long tradition of involvement in cutting-edge engineering projects. As part of the DESERTEC initiative, we’re constructing solar-thermal power plants in the Sahara and wind farms in Europe and northern Africa. In the years ahead, we’ll also steadily expand our business in renewable energies while pushing technological progress in the area of fossil-fuel power plants. If power grids are to be capable of storing energy from alternative sources, which fluctuate more than conventional ones, they must be more intelligent than their predecessors. Our smart grid solutions boast the technology needed to link power suppliers and consumers in both directions. One particularly important application for smart grid technology is electric cars, an area in which we intend to be at the forefront of developments. These vehicles can do more than provide emission-free transportation. In large numbers, they can also serve as mobile storage devices that – thanks to their batteries – help offset fluctuations in the power grid. However, the best way to minimize environmental impact, ensure power supplies and cut energy costs is still to reduce energy consumption. That’s why new markets are opening up in all areas where power is consumed: from energy-saving LED lighting and intelligent building control systems to high-efficiency integrated automation solutions to energy-efficient drives that feed excess braking energy back into the power network – all fields in which we’re already a technology leader today.

The healthcare market also offers considerable growth potential. The pressure on healthcare systems is increasing relentlessly. Due to demographic developments, more and more people are requiring medical services, while fewer and fewer people are available to finance them. We’re working on solutions for the early detection and treatment of disease – solutions capable of networking the data of different healthcare providers. The advantages are obvious: the patient’s quality of life is enhanced, and treatment costs are cut. It takes a pioneer to develop and shape the healthcare markets of tomorrow.

To ensure that we participate in this growth, we launched the top+ SMART initiative in 2008. SMART stands for Simple, Maintenance friendly, Affordable, Reliable and Timely to market, and the initiative aims to offer products, solutions and services for the fast-growing low- and medium-end market segments. This approach has two clear advantages. First, it enables us to move into additional markets. Second, it makes it harder for our competitors to penetrate our established markets, because it forces them to compete with us on their home turf. But it means that we have to give our local managers the leeway they need to make decisions. And it also means that we have to serve the entire value chain – from sales and procurement to production and product management – from local markets. That’s the only way to develop and launch competitive products tailored to specific market requirements as quickly as possible. And it’s the only way to support our customers worldwide – and acquire new customers – via our local service network. What’s more, in the medium term, we can also leverage the product knowhow and cost-optimization expertise we gain in low- and medium-end markets to develop products for high-end segments.

To beat our competitors, we have to know their strengths and weaknesses. This applies not only to our longstanding competitors but, above all, to ambitious new players in emerging countries. We’re conducting ongoing benchmarking analyses to uncover not only our competitors’ strengths and weaknesses, but also our own. We take shortcomings at our company very seriously. Rather than downplaying them, we address them rigorously to improve our own performance.

Our outstanding, innovative employees are one of our greatest assets. Their commitment, ideas and perseverance are what have made Siemens the company that it is today. We want to give all our people the opportunity to develop themselves at our company. We evaluate them in accordance with global standards, identifying and nurturing talented individuals early in their careers, and grooming our managers for their responsibilities. The Diversity Initiative launched by our Managing Board is an important part of these efforts. First of all, the initiative will enable us to build an outstanding team of employees with a broad range of experience and skills while optimally fostering the strengths of each individual in heterogeneous environments. Second, the initiative will ensure that our managers, in particular, have an international background, coupled with extensive technical expertise and professional knowhow acquired in a wide variety of capacities and businesses at different levels of our Company.

Of course, for a global player that does business in 190 countries, diversity is not only part of our identity; it’s also a major strength. To understand the specific needs and requirements of our customers around the world, we need excellent employees and intensive customer relationships. We make every effort to maintain and strengthen close contacts, some of which have been nurtured over years or even decades – because we place greater value on long-term opportunities than short-term profits. We are where our customers are, supporting them with our technologies and cooperating with them to find competitive solutions for the future.

We take these developments seriously and are intent on exploiting them as an opportunity for profitable growth. We’re fully leveraging the potential, size and financial clout that are at our disposal as an integrated technology company. We can allocate capital efficiently; our businesses are benefiting from a uniform management system and uniform development measures for employees and managers; the technologies we develop for specific applications can often be used in other businesses as well; and our access to global markets is strengthening our position in the various regions of the world.

At the same time, we’re investing resources in pioneering projects and technologies that are promoting the well-being of people around the world while minimizing environmental impact. For example, we’re ensuring power supplies for future generations by increasing energy efficiency; we’re boosting industrial productivity substantially with our innovative technologies; we’re developing healthcare solutions that make high-quality individualized patient care available at affordable prices; and we’re providing intelligent infrastructure solutions that are helping transform the world’s metropolises into sustainable green cities.

Just as our predecessors at Siemens shaped industrial development with their pioneering achievements, we’re now answering the toughest questions of our time with our leading-edge products and solutions – ensuring a better, more sustainable future for all.