LEDVANCE is the new €2 billion revenue company that has been carved out of German lighting giant OSRAM. LEDVANCE bundles LED products and traditional lamps with OSRAM’s ballast business.
Prior to his current role as CEO of LEDVANCE, Jes Munk Hansen was Head of OSRAM's Americas division. Before that, he was President and CEO of the North American business of Danish pump manufacturer Grundfos.
Before joining OSRAM, I worked for 15 years in the pump manufacturing industry. I think light is extremely interesting because, like water, it influences your life. It's everywhere. I was always a little jealous of people working in the lighting industry because when it came to energy efficiency, they were making the biggest difference.
Passion for light was one of the main reasons I took this job. Light is one of the fundamentals of life. But LEDVANCE is also an opportunity to do something unique. It's a new organization, it's a new strategy and it's a new brand. Instead of seeing the business as a dwindling asset, we saw it as the great opportunity it really is.
I studied forestry for eight years, completing both a Bachelor's and a Master's degree. So of course forestry is still one of my main interests in life, although I doubt you will find too many foresters in the lighting industry!
One of the things that fascinates me about forestry is ecosystems. And right there I already see a big connection with the lighting business. There are maybe 500 factors influencing our business. And if you change one, many of the others are impacted. My job as CEO is to understand these complex interactions and then break them down into simple, easy-to-understand activities.
I was lucky that my father often took me to events and site visits. As a result, I saw many different buildings, attended lectures at universities and met some leading architects and designers. lt was interesting, and light was always a central topic. I share the Scandinavian love of good design. Of course light plays a special role in design, and that's what I grew up with.
The traditional light bulb business is under enormous pressure. But along with the challenges, there were also real opportunities that had been overlooked. The most important were the brands – OSRAM and SYLVANIA – as well as the power of the trade and retail sales channels. Having such strong brands and access to millions of customers is an incredibly valuable asset.
lt was decided that the business needed two things. Firstly, it needed more products – both LED bulbs and light fixtures. Secondly, it needed more speed and agility to adapt to today's fast-changing reality. As a result, OSRAM made the decision to move the conventional and LED bulbs over to LEDVANCE. lt was also decided to opt for a carve-out, so LEDVANCE could move quickly and independently, leaving OSRAM free to focus fully on its core business.
The light quality of LED bulbs is now at the point where they are a real alternative for customers. As demand continues to increase for LEDs, prices will continue to go down, and this, in turn, will promote market acceptance. At the same time, demand for traditional products is shrinking. This means that while the opportunities for LEDs are growing, the challenges facing traditional products are also rising.
Once the new strategy was in place, and the organizational changes had been made, we needed a fresh positioning to define this new, independent company. We invited 40 of our top managers for an afternoon workshop where we discussed questions such as: "Who do we want to be as a company?", "What do we want to stand for?", "What is important to us as leaders?" This was a once-in-a-lifetime chance to re-think OSRAM values and give the story our own spin. We did not want to throw away the fundamentals of who we are. We are very proud of our heritage. But this was also a chance to create a new company that would embody our ideas and ambitions.
Our brand values are built on the ideas of breaking new ground, striving for excellence and winning together. But our brand positioning must be brought to life to unfold its true potential. The most important question now is: “How do we live it?”
lt was important that the brand represented more products than just light bulbs. That is one of the reasons we do not have the light bulb in our company logo. Instead we have a "pulse", which represents energy and also illustrates our core goal of bringing light to people's lives. The color orange is a visual reference to the heritage of OSRAM.
On a strategic level, the speed at which we bring new products to market and the number of products we offer are important. But a change in mindset is also important. Instead of seeing this only as a declining business, we saw it as an opportunity to create a strong company and break new ground.
We needed to convince everyone on the team that the strategy was realistic and that we could succeed together. Once we achieved this, we released tremendous energy in the organization. But LEDVANCE is not just about technological change. It's also about a change in process; how we operate as a business. This includes creating a fast, agile, efficient organization with an entrepreneurial way of thinking.
When we started recruiting, we decided that we would only bring people on board who truly wanted to join us. We wanted people who believe in the strategy and are excited to be part of the team. Then we started recruiting the next layer of management, all people who shared the same vision and energy.
When we talk about "winning together", we do not just mean winning with our team. It's about succeeding with our customers; that's how we truly win together. The whole industry is evolving and we are committed to helping our customers develop and grow in this new environment. Our promise is: "Advancing light". We want the best for our customers and we always strive for excellence, both for them and for us.
We work proactively with our customers to help them meet their business goals and guide them through changing market dynamics. Having new products and faster, more agile processes as a company will also be an important part of how we do this. Throughout the course of 2016, we unveiled our future portfolio featuring over 200 new products – the biggest expansion of OSRAM lamps ever.
We have not won yet, but we are making exciting progress on our journey. We are seeing double-digit growth for our LED bulbs as well as continuing high demand for halogen bulbs, which is very positive. We have a strong and innovative portfolio, particularly around trending technologies, which means we are ideally positioned to meet changing consumer expectations around the ergonomics and energy efficiency of lighting. I see a very bright future indeed for LEDVANCE.