How Siemens is Creating the Corporation 4.0: An Interview with Barbara Humpton

Barbara Humpton, CEO, Siemens USA


Interview Transcript

So when we looked at the strategy for the year 2020, we really had to think about creating capabilities that would address very diverse markets, from power to industry to infrastructure and transportation. Vision 2020 Plus is going to unleash the power of the corporation to address these very diverse markets.

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We’ve had to ask ourselves, “What do we need to change at the corporate level to enhance brand and reputation?” Now, what I’ll tell you is that I think what a conglomerate can do today, what the corporation 4.0 can really focus on, is taking a look at those long-term objectives that are going to ensure we continually reinvent and reevaluate our direction. We think we can bring market insights that will help each of the businesses decide, have they really honed their own strategies in the right direction, and do they have the right innovation engine set up to be able to grow and develop profitably in the coming years?

The importance of decentralizing decisions

So all around the world we’re seeing activist investors demanding that companies determine their core and become pure play actors in whatever market they’re serving. It makes you ask, “What’s the relevance of a conglomerate today? Is there real power in a brand? Is it important for very diverse companies in markets like ours, whether it’s industry or energy or infrastructure… Is it important for us to have a common brand and reputation to serve as an underpinning for each of these businesses?”

When the Siemens management team came together to talk about Vision 2020 Plus, we realized we needed to make decisions about the interaction between corporate structures and then these independent businesses we’re trying to create. It really means moving more authority and responsibility out into the businesses themselves. It’s probably the toughest topic, because a team that’s used to getting a lot of central guidance and control suddenly finds themselves capable, but also responsible, for making critical decisions they’ve never tackled before.

Ownership culture is central to everything

Hey, the biggest obstacle to any transformation is literally just the way we’ve always done things. You know the old adage, culture eats strategy for lunch. And honestly, I think any large corporation has to really work hard to create an ownership culture. Making sure that members of the organization first have a stake in the future success of the organization, but then that they also have that opportunity to interact, to have conversations with upper management about the direction we’re taking, and even to feel that they influence it themselves. Ownership culture is central to everything.