Annual Report 2012 by QVARTZ

MAY 2013 — ISSUE 06

ANNUAL REPORT 2012

ON THE HUNT FOR GROWTH — the Quartz+Co Barometer, WHEN BANANA TREES GROW FROM HEADS — and other initiatives, SEVEN CASES — how intriguing companies cope with complexity ... AND MUCH MORE

FEATURES

—4

uring our annual get-together in Båstad, we launched our 2015 strategy Claiming the Position. An alternative route was taken in the making of the new strategy. Clients’ needs, preferences and wishes, together with crowd sourcing among internal consulting communities on all levels, formed the point of departure for all consultant discussions leading up to the final strategy.

This is the sixth issue of the Quartz+Co annual report Publisher: Quartz+Co

10 —

Editors: Ditte Rosing-Schow ditte.rosing-schow@quartzco.com Thomas Holm Møller thomas.moller@quartzco.com Torsten Hvidt torsten.hvidt@quartzco.com Published in Denmark, Sweden and Norway. Printed in Denmark. Contact: DENMARK Ryesgade 3A DK-2200 Copenhagen N Tel +45 33 17 00 00 NORWAY Wergelandsveien 21 NO-0167 Oslo Tel +47 22 59 36 00 SWEDEN Birger Jarlsgatan 7 SE-111 45 Stockholm Tel + 46 (0)8 614 19 00 www.quartzco.com

Quartz+Co's Copenhagen office is WindmadeTM Certified

ON THE HUNT FOR GROWTH

urope is in f lames! This seems to be the picture painted by the media, analysts and commentators alike. Greece, Spain and Italy have made headlines with their rapidly declining

economies and massive unemployment. While Nordic companies have traditionally looked for growth opportunities in the BRIC countries, the potential in their own European “backyard” is often neglected.

FIRST YOU ADD KNOWLEDGE — 13

candinavia has a leading position within the maritime, energy and cleantech sectors, and Quartz+Co has a strong track record of advising companies within these fields. However, there’s ample room for Scandinavian companies to become better at activating their know-how in order to attract investments, seize possibilities within global export and create new jobs. Quartz+Co’s latest partnership with India-based MEC Intelligence aims to support this development.

ANNUAL REPORT 2012

TABLE OF CONTENTS MESSAGE FROM THE BOARD —

GLOBAL CLEAN ECONOMY OUTLOOK Global Cleantech Report 2012

—3

Editorial

4—

CLAIMING THE POSITION

Quartz+Co's Strategy 2015

6 — SUSTAINABLE

— 20

22 —

Statkraft case

24 —

ONE SMALL STEP Employer branding

DEFINING WHAT CAN'T BE DEFINED

PACKAGING

— 25

Carlsberg Group case

The Big Blue – our values and aspirations

8 — FINDING NEW

BUILDING THE BRIDGE AS YOU WALK ON IT

PASTURES

26 —

Arla case

ON THE HUNT FOR GROWTH

— 10

28 —

Quartz+Co Barometer

Danske Bank case

WHEN BANANA TREES GROW FROM HEADS

Bringing Talent2Talent in Nairobi

12 —

DOING COST-OUTS RIGHT

30 — BALANCING MEANS

Orchestrating successful cost-out programmes

13 — FIRST YOU ADD KNOWLEDGE

Partnership with India-based market analysts

AND AMBITION SAS case

BREAKING THE SPEED OF SOUND TOGETHER Leveraging diversity

14 —

— 32

— 34

REMEMBERING ICONIC MOMENTS Iconicity

CUTTING THE GORDIAN KNOT — 15 Maersk Line case

15 —

ONTO A BETTER PATH Dako case

36 —

ONWARDS

Keep on connecting

ANNUAL REPORT 2012

MESSAGE FROM THE BOARD

en years ago, Quartz+Co was founded, and for that reason alone, 2012 was a special year. Because 10 is, in many ways, a special number. In life, the end of the single-digit age somehow signifies that the door to Neverland is closing, and that the door to the real world, with all its duties and requirements, is starting to open. We certainly feel that we have matured in the 10 years since our inception. But we feel safe in concluding that the door to Neverland is still wide open. Indeed, our youngest consultants, when asked to submit input for the strategy process we conducted this year, didn’t return a PowerPoint presentation or something along those lines, but a video containing a few key sequences from Disney’s Peter Pan. This input conveyed the importance of continued trust in “next practice”, our values and our distinct culture. “To have faith is to have wings”.

Our new strategy was presented brilliantly at the traditional Quartz+Co summer gathering in Båstad. As you will see later in this report our strategy holds a continuation, but also a new perspective. The continuation is our commitment to building a strong presence in Norway and Sweden – to claim a position equal to the one we have in Denmark. The new perspective is our aspiration to connect more robustly to the world than temporary project work will accomplish, although our projects have brought our teams to 25+ countries during the year. Some of the most epic journeys are described in this report. If the 10-year anniversary was no cause for sentimentality, the event in Båstad certainly was. Christian Hvidt, our iconic chairman through the entire lifespan of the company, declared long ago that he would resign when he turned 70. And in 2012, he did both. When Christian held

Gry Mølleskog Marcus Alexander Nicolai Ørsted

his farewell speech in Båstad, and left us with his signature sign-off “I see, you see, QC”, we sensed that everyone in our small civilisation, from the youngest consultant to the founding partners, felt that we just witnessed the turning of a major milestone. We tip our hats, and offer Christian all the best on the hunting grounds, golf courses and other exotic venues that await him around the globe. Going forward, the strategy developed during the year will serve as a compass, showing us where to go, and not least how to strengthen our relevance and our presence. And with that, we’re sure the sun also rises in 2013.

QUARTZ+CO

THE SUN ALSO RISES

emingway found the title for his brilliant novel The Sun Also Rises in the Old Testament. King Solomon asks, “What gain has a man from all the labour under the sun?”, and answers himself rather despairingly, “The sun also rises and the sun sets, and hurries back to where it arose … what has been will be again, what has been done will be done again; there is nothing new under the sun.” At Quartz+Co we see things differently. We stand for progress, optimism and indeed early mornings. We’re convinced that King Solomon would be quite pleased to see what has been accomplished through the labour of men. And to us, the fact that “the sun also rises” has always been a great comfort and motivation, rather than a reminder of endless grind. We find that in times of crisis, financial or otherwise, it’s important to remind each other that tough times won’t last, but that tough people will. And that history tells us that even the biggest of challenges and the most complex of problems can be solved.

This report will document that we did our small part when it comes to solving complex problems and handling large-scale challenges. A range of Scandinavia’s most iconic and notable companies chose to collaborate with us – many of them consolidating a working relationship which goes back many years. We owe all our clients gratitude for the trust they’ve shown us during the year, but in par-

“ W hat gain has a man FROM all the labour under THE SUN?” ticular we would like to thank the clients who allowed us to disclose the following cases. Speaking of big challenges and gratitude towards the people who deal with them, we offer quite a bit of gratitude to Nicolai Ørsted, who replaced Christian Hvidt as our chairman at the end of 2012. Nicolai has been on our board since we founded the company, and furthermore enjoys the role of managing partner at the major Danish

As a Christmas gift to relations and friends of the house, we brought together talents from a field very different from business, asking a number of accomplished Scandinavian musicians to reinterpret the music of a handful of gifted African artists.

law firm Plesner. As such he not only brings an intimate knowledge of our company but also know-how when it comes to managing a partner-owned company. We reiterate our deep gratitude and sincere best wishes for Christian, and look forward to working even closer with Nicolai. We also look forward to continuing the tradition of hosting Club Q+, the Talent2Talent Nairobi workshops (our joint CSR initiative with Novo Nordisk, Grundfos, LEGO, BDO, Bech-Bruun and Coop), the Cantina Q+ food extravaganza, the mentoring programme for elite students, the Quartz+Co Soccer Challenge, the Christmas theatre trip with our children and our clients’ children, and much more. Alongside the intriguing client engagements, some of which can be studied in this report, these traditions deliver both results and relationships, and certainly prove that, no matter what, the sun also rises. And that’s a good thing. The Q+C Partnership

The original tracks as well as fresh interpretations of the songs were collected in an album, offering something entirely new to enjoy while the sun also rises. Tune in at www.thesunalsorises.info – access downloads and more with the password thesunalsorises

ANNUAL REPORT 2012

B책stad

An early April morning at Toldboden in Copenhagen

CONNECT TO THE WORLD

CLAIMING THE POSITION BY JAKOB WEDEL

QUARTZ+CO

ur 2015 strategy aims to solidify Quartz+Co as a clearly differentiated first-tier consulting company, claim our position as “one of three in all three” (one of the three most reputable strategy consulting companies in Denmark, Sweden and Norway), and strengthen our relevance as strategic advisors by connecting to the world. An alternative route was taken in the making of the new strategy. Clients’ needs, preferences and wishes, together with crowd sourcing among internal consulting communities on all levels, formed the point of departure for all partnership discussions leading up to the final strategy.

The internal crowd sourcing process fostered inspirational outputs; our community of junior consultants produced a Peter Pan movie highlighting the importance of an entrepreneurial, learning-based culture with everyday development opportunities. Our more experienced consulta nts w rote a Schumpeter-inspired article on the importance of winning with customers rather than winning against competition. Our group of managers and seniors analysed the Nordic consulting market to look for underserved growth pockets and paired those with the skills of Quartz+Co, resulting in a recommendation to sharpen our spikes and unlock latent international demand in areas such as water, energy and cleantech.

Our CLIENTS told us to maintain our ABILITY to tailor the approach to the problem AT HAND

THE QUARTZ+CO PROJECT

Conservatism

QUARTZ+CO

THE ESTABLISHMENT

MAGNETIC CENTRE

THE OPPORTUNISTS

METHODOLOGYDRIVEN

TAILORED APPROACHES

EXPERTS FOR HIRE

PRACTICES

NETWORK

CLOUD

COMPANY BEFORE PEOPLE

PEOPLE ARE THE COMPANY

ONLY PEOPLE – NO COMPANY

UP OR OUT

MORE THAN A STEPPING STONE

IN AND OUT

Radicalism

TSEM

Our clients were similarly clear in their feedback. They told us to maintain our ability to tailor the approach to the problem at hand, and to strengthen our capacity not only to tackle and solve complex business issues, but to focus just as much on our recognised ability to use creative mechanisms to engage and mobilise the client organisation in order to leave behind positive memories of consulting impact and learning.

TACKLE & SOLVE, ENGAGE & MOBILISE — INTRODUCING QUARTZ+CO'S ENGAGEMENT MODEL

We’re proud to present a handful of the projects and iconic moments we shared with clients and colleagues in 2012, claiming our position in the course of helping other companies tackle, solve, engage and mobilise.

We found ourselves teeing off the strategy in Båstad with a very strong narrative of where we want to be in 2015 – and what it will take to get there. CLAIMING THE POSITION IS CENTRED ON AN AMBITION TO:

1 2

BECOME ONE OF THREE IN ALL THREE Favoured position in the Nordics

SHAPE AND SHARPEN SPIKES Charge commercial engines via deep insights

CONNECT TO THE WORLD Expand reach and capabilities

REINFORCE MAGNETISM A truly differentiated value proposition

ANNUAL REPORT 2012

CARLSBERG GROUP CASE

SUSTAINABLE PACKAGING BY MORTEN SAITTA BREGENDAL

rewers and FMCG companies are under pressure from regulators, retailers and consumers to reduce the environmental impact of their operations.

45% 45% OF CARLSBERG’S CO2 EMISSIONS CAN BE ATTRIBUTED TO PACKAGING

At the end of 2012, Carlsberg defined a bold CSR ambition: to position itself as a frontrunner in the brewery industry within sustainable packaging, and to do it fast. Consequently, the Executive Committee in Carlsberg asked the CSR department to prepare the company to move fast to secure a leadership position. Packaging is an important feature of Carlsberg’s products. It’s an essential part of marketing, affecting how customers and consumers perceive the brand and products. But other aspects are of increasing concern to Carlsberg, such as the great potential of reducing the company's carbon footprint as well as optimising manufacturing, procurement and logistics costs by working systematically with sustainable packaging.

PERSPECTIVE CSR AS A STRATEGIC DRIVER A few years ago, CSR was often seen as a parenthetic business area rather than a commercial driver. Today, CSR is no longer a satellite activity hovering in the outer

Driven by Group CSR, Carlsberg decided to implement a new sustainable packaging programme to quickly establish a leadership position while also ensuring bottom line value creation and exploiting the PR and branding potential. The sustainable packaging programme builds on four pillars: reduce, reuse, recycle, rethink. In the following, two of these four principles are elaborated.

“To us, SUSTAINABILITY, or CSR, is business, it's NOT something that's DETACHED”

Reduce: Lightweighting

It was decided first to turn the spotlights Simon Hoffmeyer Boas, towards lightweightSenior CSR Manager ing. Today, a glass bottle weighs 20% less than it did 20 years ago, but there’s a potential to reduce weight even more. “Lighter products mean that less energy goes into manufacturing and transport. It’s good for the environment, but it also reduces the cost of procuring the bottle”, says Simon Hoffmeyer Boas, Senior CSR Manager in Carlsberg. “To us, sustainability, or CSR, is business, it’s not something that's detached”.

sphere of a business. The question is no longer whether a company has a CSR programme, but rather what kind of CSR programme it has and how this contributes to the overall value creation. In many businesses, the answer is still a somewhat fragmented list. Only few take the full plunge and let CSR drive vast changes throughout their supply chains. But the tables are turning. The benefits from using CSR as a driver

to fundamentally change the entire value chain can be many, and substantial financial gains can often be made. The positive impact on the environment or society, apart from being a benefit in its own right, holds great PR value. Furthermore, the company forms a strong ethical relationship to employees and the community in which it does business, thereby gaining licence to operate.

QUARTZ+CO

In addition to environmental benefits, more sustainable packaging is expected to generate cost savings

Rethink: Closing the material loop

Large-scale CSR initiatives often involve partnerships between businesses, governments and NGOs. Products made by environmentally safe and recyclable materials can be awarded the Cradle-toCradle® Certificate, however, this requires co-operation between the various stakeholders in the value chain. In COMPANY FACTS 2013, Carlsberg will commence a project Fourth largest brewer focused on generating positive impact by in the world. developing Cradle-to-Cradle® products. This will ensure that the materials used 76 majority-owned breweries in Western in beer cans can be used again – perhaps Europe, Eastern Europe in another beer can, or even in your next and Asia. iPad or bike ... 9% organic beer volume growth in Asia.

Accelerated transformation

Packaging is a complex domain in Carlsberg, involving a wide range of stake-

41,708 employed in 2012.

GROUP LEVEL

Creating transparency

Establishing baseline tools and governance

COUNTRY LEVEL

Hypothesis generation and testing

Setting targets and driving initiatives

holders, not to mention tonnes of glass, carton and aluminium. To drive the high-speed transformation, Carlsberg set up a collateral process. At group levTHE CARLSBERG el, focus was to esGROUP REPORTS tablish the baseline, OPERATING PROFITS drive PR and estabOF DKK 9.8 BILLION IN 2012 lish partnerships. In this regard, a global database of the weight and CO2 reduction potential of various initiatives was developed. In parallel, local country level deep-dives were conducted to set local targets and to accelerate specific initiatives. “One of the things that made this project special was the parallel set-up, creating a productive process between the Group and the markets. Selected markets participated in generating and testing hypotheses as well as setting ambitious yet realistic targets. Here, a key tool was the global database which contains aggregated information about the weight and CO2 impact of Carlsberg’s global packaging portfolio for all SKUs”, says Simon Hoffmeyer Boas. “The database has enabled us to compare weight across all products and markets and identify best practices as well as the CO2 reduction potential of decreasing the weight of our packaging”.

9.8

Learn more about Carlsberg Group's CSR activities at www.carlsberggroup.com/CSR/Reports

2013 PLANS Carlsberg is planning to roll out a range of activities to help markets reduce the environmental impact of packaging. 1. Identify weight reduction targets for primary packaging 2. Conduct a Cradle-to-Cradle® analysis to identify potential Cradle-to-Cradle® products 3. Create consumer engagement communication concerning recycling 4. Sustainable packaging idea catalogue developed and distributed internally

ANNUAL REPORT 2012

ARLA CASE

FINDING NEW PASTURES BY ROBERT GANTNER

Arla is owned by 12,256 dairy farmers

PERSPECTIVE TAKING THE LONG PATH The fast-paced changes permeating todayâ&#x20AC;&#x2122;s business environment are ubiquitous facts repeated all over business media. Often, the changes serve as key arguments for proclaiming the futility of longterm strategic planning. In our view, however, thatâ&#x20AC;&#x2122;s not entirely true. Long-term strategic planning is still relevant and should complement more frequent strategic reviews. Especially in cases where more

fundamental changes in the way of doing business or which strategic positions to claim are considered, for example when trying to enter a new market. Once the direction is defined, it still takes meticulous planning, analyses and steel-eyed execution to deliver success. This is also the case for PMI processes,

which are often key enablers and chances, but sadly more often pitfalls, for delivering the value that has been identified at the drawing board. Maintaining focus on how to best combine the relevant units is key.

QUARTZ+CO

n 2008, Arla launched a new corporate strategy, Strategy 2015. One of its key elements was to establish Germany as a core market with a leading position. Through subsequent acquisitions, Arla had built the required foundation. But along with this came the need to create a coherent organisational structure to realise synergies and connect to the Arla organisation to create One Arla. First, Consumer Germany Netherlands (CGN) was established as a separate business unit and second, the newly established three-letter combination was to be given a physical expression in the form of a stringent organisation populated by the right people. This was the challenge Tim Ørting Jørgensen, EVP for CGN, was facing at the end of 2011. A new business unit

Creating CGN not only required a functioning organisation and management team, but also clarifications of the new business unit’s interfaces with corporate as well as other business units within Arla. CGN was organised and staffed to be able to absorb new acquisitions, which were worked on simultaneously. COMPANY FACTS Arla has production facilities in 12 countries, sales offices in an additional 30 countries and more than 18,000 employees. Arla products are sold in more than 100 countries, with core markets being Denmark, Sweden, the UK, Finland, Germany and the Netherlands.

In the spring of 2012, the existing unit with sales of EUR ~700 million merged with MUH, Europe’s largest longlife milk production unit, with sales of another EUR 700 million. Suddenly, setting up the new organisation to ensure optimal functioning and reaping of synergies took a whole new turn.

Strategy 2015 launched Autumn 2008

A thousand pieces in a jigsaw

When putting this kind of organisational puzzle together, a steady hand is required. Following the acquisitions, Tim Ørting Jørgensen had four complete organisations at hand. To create an efficient CGN, a rigid analytical structure for making the right design choices was established, ensuring clear objectives, efficient co-ordination mechanisms and precise allocation of responsibility. Making the organisation come alive, however, was the crucial next step, and Tim Ørting Jørgensen explains, “Creating a logiTim Ørting Jørgensen, EVP for CGN cal organisational structure was our main focus, but we always had in mind that organisations are made up of people so it’s not just a question of drawing lines in an organisational chart, but also of motivating and engaging everyone to implement the changes and make the new business unit come alive”. To begin with, the top level of the management team was brought on board. “After having defined the first level of the organisation, we held a workshop with the new management team in June 2012 to use their knowledge to create the right set-up, but also to engage the team and make sure they were on board for the journey ahead”, Tim Ørting Jørgensen explains.

As soon as the ACQUISITIONS were ratified, we could conduct a POWERFUL internal launch

15%

The virtue of timing

It takes three to six months for the acquisition of one or several comARLA’S TOTAL REVENUE HAS panies to be approved by the European Union. However, Arla began INCREASED BY 15% defining One Arla straight away. This enabled CGN’s management SINCE 2011 team, on the Monday after the ratification, to present One Arla at all sites in Germany. Already at this point, One Arla included a fully populated organisational structure that was operational and commercially integrated from day one, including invoice handling, orders, etc. “As soon as the acquisitions were Building the Supply Chain unit ratified, we could On paper, organisational design might seem a simple exercise, but conduct a powerful the organisational chart hides a complex reality of roles, interfaces internal launch with and people with dreams, ambitions and feelings. Integrating four a complete roll-out production sites in the Supply Chain division was indeed a chalof our future CGN lenge. The production managers, used to deciding much themorganisation. To me, selves, were involved in creating a coherent unit that also fitted in that was a big mo- the big picture. “We were aware that it meant less responsibility ment,” Tim Ørting for some, but we really wanted to show the advantages that the Jørgensen concludes. support from the rest of the Arla organisation could provide, and I believe we succeeded”, says Tim Ørting Jørgensen.

Merger between Arla and Hansa-Milch eG 2011

Arla bought a Dutch dairy in Nijkerk 2009

Consumer Germany Netherlands (CGN) established January 2012

Arla acquired AlloäulandKäsereien 2011

Merger with Milch-Union Hocheifel (MUH) May 2012

Merger with MUH approved. Organisation announced October 2012

ANNUAL REPORT 2012

QUARTZ+CO BAROMETER

ON THE HUNT FOR GROWTH BY DITTE ROSING-SCHOW

Nine top executives discussing growth potential in Europe August 15, 2012

urope is in flames! This seems to be the picture painted by the media, analysts and commentators alike. Greece, Spain and Italy have made headlines with their rapidly declining economies and massive unemployment. These years, conceptualising strategies for businesses in Europe has caused

“We don’t focus on new markets, but exclusively on how to gain MARKET SHARE in the European markets where we’re already present” Søren Schriver, CEO of Hummel

SØREN SCHRIVER CEO of Hummel

LYKKE FRIIS Member of the Danish Parliament, The Liberal Party

ANDERS WILHJELM CEO of GEA Process Engineering

JENS-PETER SAUL Group CEO of Ramboll Group

plenty of grey hair and sleepless nights for executives in all lines of business. While Nordic companies have traditionally looked for growth opportunities in the BRIC countries, the potential in their own European backyard is often neglected. EUROPE UP FOR DEBATE

But are there growth pockets in Europe worth exploring? This was the question nine top executives debated in August 2012 when they were invited by Quartz+Co and the

ANDERS HEEDE CEO of BDO

The Quartz+Co Barometer is based on a survey including more than 400 Danish companies and was conducted in the summer of 2012. In August 2012, the survey was followed up by a panel debate hosted by Quartz+Co between nine top executives about “Growth in Europe”.

QUARTZ+CO

Decompose Europe and look for growth regions 1. Reconfigure the borders: Don’t divide Europe according to countries but rather decompose it into growth regions. Countries and regions should be analysed separately.

2. Build an effective regional set-up: When a company approaches markets by region, it's able to quickly respond to changes in the market.

Danish business daily Børsen to participate in a discussion on growth opportunities in Europe. The stances represented in the panel were somewhat fragmented. Most could agree that there are several unexploited opportunities in Europe which companies are missing out on, but how to seize them was up for debate. Do you try to beat the guy next door by gaining market share in your current strongholds, or do you go for breaking new grounds by growing in unfamiliar territory? Beating the guy next door

“We don’t focus on new markets, but exclusively on how to gain market share in the European markets where we’re already present”, says Søren Schriver, CEO of Hummel. “Growth to me is about beating the closest competitor. If we’re able to do so there will always be opportunities for growth”. Adapting to new markets

Icopal, a manufacturer of roofing and other building materials, has turned its focus to Eastern Europe. “We’re forced to face a new reality. We produce quality products with a durability of up to 30 years. But if we adjust the quality to a durability of only 10 years, the Eastern Europeans can afford to buy the products today. In these difficult times, it’s essential for us to adapt faster to cope with the demand”, explains Miguel Kohlmann, CEO of Icopal. Get moving

Companies have become more risk averse and consider their moves in Europe carefully. According to Søren Sørensen, Group Executive Vice President of Grundfos,

3. Incorporate macroeconomic perspectives into your strategy: Companies need to find new sources of information, enabling them to identify, understand and attack the right regions in Europe.

4. Go shopping: In countries struck by crisis, there are plenty of interesting companies to be acquired at a good price. Exploit this opportunity.

companies ought to get moving. “We’re not giving up on Europe, and we’re focusing on gaining market share. But we recognise that we have to rethink our go-to-market approach”, says Søren Sørensen and urges other companies to do the same. SUCCESS LIES IN REGIONS

“We’re not giving up on Europe, and we’re focusing on GAINING market SHARE. But we recognise that we have to RETHINK our go-tomarket approach”

According to partner in Quartz+Co, Anders Bruhn, “Danish companies put the wrong effort into accessing low-potential and lowgrowth areas by targeting entire countries. Companies Søren Sørensen, Group Executive should adopt a focused reVice President of Grundfos gional approach to capture potential markets”. Countries suffering from budget deficits and recession often contain regions with growth. Numbers from OECD reveal that the 10 biggest regions constitute about a third of the total economy ONLY 20% OF THE RESPONDENTS CONSIDER in the European countries. Among these GROWTH POCKETS AS GEOGRAPHIC AREAS, LEAVING POTENTIAL IN REGIONAL GROWTH regions are the areas around the cities of POCKETS UNTAPPED Paris, Düsseldorf, Stuttgart, Milan, Madrid and London. In these areas, the economy Respondents consider growth pockets is stable and growing. “Quartz+Co’s survey according to different criteria shows that half of the companies don’t try to exploit the opportunities in these growing regions, but rather look at whole countries. No 68% No 80% With this in mind, European companies should make sure not to leave the contracts for the Chinese or the Americans to sign”, Yes 20% says Anders Bruhn. Yes 32%

GEOGRAPHIC AREAS

PRICE NICHE

No 73% Yes 55% Yes 27% No 45% JAN JOHAN KÛHL Managing Partner of Polaris Private Equity

BIRGIT NØRGAARD Board member at DSV and Lindab

SØREN SØRENSEN Group Executive Vice President of Grundfos

MIGUEL KOHLMANN CEO of Icopal

INDUSTRY

PRODUCT NICHE

ANNUAL REPORT 2012

n the economic landscape of today, most companies and public institutions are forced to drive their businesses efficiently and effectively. Most Western European companies face the challenge of having to structurally increase their productivity – and public sector spending is also under scrutiny, forcing institutions to realise synergies and take out incremental costs. Few executives have the luxury of ignoring the agenda of cost reductions, and therefore most are faced with the challenge of driving efficiency and cost savings programmes at some point.

Few executives have the luxury of ignoring the agenda of cost reductions

But the journey from benchmarking a company’s savings potential to realising savings is often a bumpy ride, and even though cost cutting is a common exercise among executives, it’s a delicate process. In our experience, cost reduction programmes are often poorly set up and orchestrated.

A FRAMEWORK FOR LARGE-SCALE COST-OUT PROCESSES

Quartz+Co has published a whitepaper outlining a framework for driving cost-out programmes. According to its authors, partners Adam Norsker and Christian Sparrevohn, who have vast experience with costout programmes, the success rate of such processes largely depends on how they are set up and managed:

“Our whitepaper is mainly aimed at semi-public or private organisations that pursue larger budget analyses or cost-out programmes – but the principles also apply to smaller initiatives. The decisive factor is not exclusively the scope of the targeted costs – often larger cost-out programmes don’t target the entire cost base. In our experience, the critical factor for success, that’s to say actually being able to realise cost savings, is how you design, set up and manage the programme”.

BASED ON QUARTZ+CO’S WORK ACROSS A LARGE ARRAY OF INDUSTRIES AND COST SCOPES, WE HAVE FIVE KEY BELIEFS

Put the cost reductions into a relevant context

Plan the implemen-

Set up and plan the process thoroughly Base the work on robust hypotheses

tation

Insist on tangible initiatives

2 4 Doing cost-outs right – five beliefs about cost-out programmes. Whitepaper published by Quartz+Co. Download the whitepaper at www.quartzco.com

QUARTZ+CO

OSLO

STOCKHOLM Quartz+Co

Quartz+Co

COPENHAGEN Quartz+Co and MEC

There’s ample room for SCANDINAVIAN COMPANIES to become better at activating their KNOW-HOW within the maritime, energy and cleantech sectors. QUARTZ+CO’S latest partnership aims at supporting this DEVELOPMENT HONG KONG

MEC INTELLIGENCE Delivers domain knowledge within the maritime, energy and cleantech sectors with a specific focus on strategic and market-related growth, through delivery centres in India, China and Denmark.

MEC

NEW DELHI MEC

PARTNERSHIP WITH INDIA-BASED MARKET ANALYSTS

FIRST YOU ADD KNOWLEDGE BY HANS HENRIK BECK

close partnership has been established between Quartz+Co and MEC Intelligence, a company which delivers tailored market analyses and in-depth knowledge within the maritime, energy and cleantech sectors through its delivery centres in India, Denmark and China. There are clear synergies to be harvested in joining the knowledge, experience and competences of the two companies, and this was the starting point of the close co-operation that led to Quartz+Co becoming the majortity shareholder of MEC Intelligence. The sector focus of the two companies is an excellent match – with insights and references that provide unique perspectives to drive our clients’ growth, putting the constellation in a league of its own.

Cleantech growth

KNOWLEDGE IS KEY It’s difficult for Scandinavian companies to stay informed, identify growth possibilities and react fast enough to keep the lead. In this context, knowledge is an invaluable asset, and reliable and tailored market analyses are needed, not least of the possibilities in Asia. Scandinavian companies are well aware of this. “We see a rise in demand among our clients. And if you think that Indian companies only provide cheap labour, think again. Indian companies are among the best within market research, and it takes a high degree of specialisation to get the needed depth and geographic spread in the analyses”, says Thomas G. Arentsen.

“Danish companies are ver y skilled within the maritime, energy and cleantech sectors, but in order to maintain the leading position they need to become bet- Read more at www.mecintelligence.com ter at repositioning themselves in relation to the future com- solutions combined with an exploding depetitive situation, taking advantage of the mand in new growth markets. The evolution growth possibilities offered by global markets within cleantech happens fast, and Danish and attracting foreign investments and com- companies need to adopt new intervention petences”, says Thomas G. Arentsen, head strategies to survive the industrialisation of of Quartz+Co’s energy practice. And there’s the sector. indeed something to be gained, with the rapidly growing demand for sustainable energy

ANNUAL REPORT 2012

QUARTZ+COâ&#x20AC;&#x2122;S ENGAGEMENT MODEL TS

TACKLE AND SOLVE The discipline of decomposing a business issue into its logical parts is the heartland capability of every good business strategist. Itâ&#x20AC;&#x2122;s a method, but also a mindset. A principle, if you like. Tackle and Solve is the Quartz+Co way of approaching critical business issues and arrive at fact-based solutions which are at the same time relevant and innovative and, if we may say so ourselves, often disruptive to competition.

ANNUAL REPORT 2012

ENGAGE AND MOBILISE The discipline of delivering impact and exceptional results through co-creation is the new black for every strategist. Itâ&#x20AC;&#x2122;s not a method, but a way of working. A philosophy, one could say. Engage and Mobilise is the Quartz+Co way of delivering impact and creating memorable experiences for our clients, often by using unconventional and creative ways to fast-track execution and ensure lasting change.

ANNUAL REPORT 2012

DAKO CASE

ONTO A BETTER PATH BY CHRISTIAN REICH AND JAKOB WEDEL

his is the story of Dako, the leading cancer diagnostics company, and how a dedicated management team with strong commitment and clear direction could make a world of difference in just one year. The scene is the 2013 USCAP show in Baltimore, the main annual pathology event in the world’s largest market, and Dako is the talk of the town. Dako has just success-

Everyone NEEDED to be part of the solution if Dako was to get on a better PATH

110 DAKO’S PRODUCTS ARE SOLD IN MORE THAN 110 COUNTRIES

fully launched its new instrument, the Dako Omnis™ and once again set the standard for all others to follow. But that’s not all, something is different about Dako. From being a bit old-fashioned and falling behind, suddenly Dako is positive, vibrant, focused and confident, and everyone has noticed. What happened? Tackle and Solve

To understand this transformation, we need to go back to late 2011 when Dako’s CEO Lars Holmkvist convinced his management team that a major commercial transformation was needed.

Dako had lost its global leadership position. Competition had for years aggressively pushed innovations in the cancer diagnostics market and had eaten away Dako’s market share in most established markets, and gotten a head start in the fast-growing emerging markets. Lars Holmkvist and his management team initiated a large-scale X-ray of their current commercial performance, and the conclusions were unmistakably clear • Dako had lost its leadership position both in numbers and reputation • The commercial organisation was in disarray – it had lost touch with customer needs and also appeared disconnected from the rest of Dako Something had to be done. Under the heading RESTORE , an ambitious commercial transformation was initiated. The aim was fivefold 1. Rethink how the commercial organisation must operate 2. Enable field force success to focus on the most attractive opportunities 3. Improve core commercial disciplines and capabilities 4. Ensure a successful launch of the Dako Omnis™ 5. Align all of Dako behind the new growth agenda A RESTORE programme office was established and a head of commercial excellence appointed. For the next year, RESTORE became the epicentre of commercial drive and the programme office the physical representation of the change. All efforts were highly visible, and all the programme office walls were decorated with plans, deliverables, ideas, inspirational quotes and pictures from workshops and events.

QUARTZ+CO

Dako provides antibodies, reagents and instruments enabling physicians to choose the right form of cancer treatment, the first time

12.9 IN 2012, DAKO WAS SOLD TO THE GLOBAL TECHNOLOGY FIRM AGILENT TECHNOLOGIES FOR DKK 12.9 BILLION

RESTORE became the project for all of the organisation, and not just

something that was conjured up by management. All were engaged, all were informed, and the results were evident. Over the next twelve months, Dako developed and implemented the following • • • • • •

A new go-to-market model for the field force A new company-wide value proposition A revitalised Global Marketing and Customer Management organisation A new commercial planning process A world-class launch of the Dako OmnisTM A RESTORED confidence

Engage and Mobilise

The first major milestone in the commercial transformation took place in mid-April 2012. Dako gathered its top-100 leaders at a global Leadership Forum dedicated to RESTORE . Under the headline A Better PathTM, the Dako corporate management team showed its unified commitment to implementing the necessary changes across the commercial organisation and realigning all sales affiliates around a new common selling model and a new company-wide value proposition. Their commitment stretched across all functions. Commercial performance was not the Sales division’s challenge alone; it was everyone’s issue, and everyone needed to be part of the solution if Dako was to get on a better path. A Better PathTM even became a physical memory for all participants through a tailored board game allowing everyone to help find solutions to the everyday challenges of the field force. All learnt that their contribution made a real difference to the customer, no matter if they worked in R&D, Finance or any other department. The Leadership Forum also introduced all of Dako to Operation Tailwind, a travelling team in RESTORE . With the support of Operation Tailwind, the sales organisations in some of the largest markets had each gone through a 4-9-week exercise of 1. 2. 3. 4.

Creating full market transparency Establishing a tactical segmentation model Realigning territories and teams around market opportunities Implementing the new selling model

Finally, the Leadership Forum was the kickoff for the new marketing organisation which was closely tied to the needs of the field force; to bring the best of Dako to every customer COMPANY FACTS situation. Dako was founded in 1966 by the medical doctor Niels Harboe.

During the followDako’s objective is to fight cancer by providing ing months, Dako high-quality antibodies, instruments and software continued down its enabling physicians to choose the right kind new path. Operation of treatment for the patient. Tailwind was rolled out, the new marketing organisation was beginning to take shape, and in the middle of the transformation something big happened. Dako was sold. EQT had been searching for the perfect owner for Dako and with the commercial transformation progressing, the timing was right. On May 17, EQT proudly announced that Dako was sold to the global technology company Agilent Technologies at 22 x EBITDA – or DKK 12.9 billion. With the sale to Agilent, Dako became part of DGG (the Diagnostics and Genomics Group). Along with the new ownership, Dako received significant investments, global reach and access to an abundance of new exciting genomic technologies that can be applied in cancer diagnostics.

The path ahead The future indeed looks bright. Dako is now an Agilent Technologies company, the Dako OmnisTM is launched, the pipeline is filled with promising technologies and commercial momentum has been regained. This inspires the kind of confidence that was so evident for everyone at the USCAP conference.

ANNUAL REPORT 2012

MAERSK LINE CASE

CUTTING THE GORDIAN KNOT The segmentation model allows managers to prioritise segments according to the same principles whether in London, SĂŁo Paolo or any other harbour on the map

BY JESPER ADELTOFT

magine being in charge of a Maersk Line office in, say, Brazil, having to grow a market position at rates in excess of 15% per annum in order to cater to market developments and central capacity investments. Which customers and areas do you target in order to reach the target volumes?

MANAGEMENT was determined: Either we take it to the point where we believe it WILL WORK, or we drop the project entirely Several times over the past 10 years, Maersk Line has tried to develop a segmentation model that could be made operational at Group level as well as in all 130 local offices

in order to ensure coherent commercial focus and prioritisation. All attempts of making it operational have failed, however.

COMPANY FACTS Maersk Line is the worldâ&#x20AC;&#x2122;s largest shipping company, operating in 130 countries, with a work force of more than 25,000 employees, a fleet of about 650 container ships and 15 million containers transported annually across the globe.

But the management was determined to cut this seemingly Gordian knot of developing a framework that was widely accepted, simple enough to apply in a daily setting and yet able to encompass the complexity of market realities. In the autumn of 2011, after nine months of hard work, Maersk Line was finally able to untangle the threads and start the global roll-out of a new segmentation framework. What had made it work this time around? Tackle and Solve

To answer this question, we need to look into what segmentation is all about. The misunderstandings regarding segmentation are many, and the pitfalls on the way to success even more plentiful. Put very simplistically, segmentation is about prioritisation. However, when

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Where to grow?

STRATEGIC SEGMENTATION Understand the overall market landscape in order to identify attractive market opportunities and prioritise segments.

looking closer there is a need to agree on precisely which problem the segmentation efforts should solve. Is it growth or cost cutting? Is it to regain lost market share? To increase sales efficiency? The purpose of the segmentation efforts will determine which different segmentation models to apply at the different levels.

At STRATEGIC LEVEL , the key is to create an understanding of the overall market landscape in order to identify attractive market opportunities and prioritise segments accordingly. The TACTICAL LEVEL determines what to offer customers by examining the needs, buying criteria and behaviour of the prioritised segments. And at OPERATIONAL LEVEL , the segmentation is translated into How concrete action plans to realise value where to sell? the customer meets the business. The three levels are interconnected, and changes at one level impact the others. Companies should OPERATIONAL define what they want and how to achieve SEGMENTATION it for all three of them. Drive and manage

operations and projects in order to realise value where the customer meets the business.

In the case of Maersk Line, the segmentation was to encompass all three levels, with distinct focus on defining and connecting the strategic and operational levels as a reshaping of the value proposition – i.e. the tactical level – had recently been scrutinised with the Daily Maersk product.

What to offer?

TACTICAL SEGMENTATION Understand costumer needs, buying criteria and behaviour for prioritised segments in order to develop attractive offerings.

At strategic level, the first step was to develop a strategic market model. In such a model, a segmentation grid is established on the basis of just two dimensions. This is an oversimplification of reality that trades off complexity for operational efficiency – but if made right, it still holds the potential to embrace vast complexity.

After multiple analysis loops, the two primary dimensions of the model chosen in Maersk Line were cargo types and routes. The next exercise was to define groups of cargo types with the same characteristics that represented different value to Maersk Line. An entanglement of 600-800 cargo types and 250+ routes was transformed into a segmentation grid consisting of 144 prioritised fields. Each field was broken down according to the same logic, allowing every part of the organisation to find itself and to know which cargo types to focus on in which routes and corridors. Engage and Mobilise

This case story promised to reveal what made the segmentation project work for Maersk Line this time around. The answer to this question can be found in the process leading to the segmentation model and its implementation. To make the defined segments of the model operational at all levels, not only must a logic model be defined with the right dimensions, but it must also be populated with the right data – not just the available data. And just as importantly, a common language to talk about segmentation and to agree on the priorities must be established.

This is not done in a flash; however, when done right, it enables the organisation to rank and prioritise segments according to the same principles, whether in London, São Paolo or any other harbour on the map. One of the simple reasons why the previous segmentation efforts had failed was the fact

Today, the manager in São Paolo MAKES DECISIONS ACCORDING to the same logic as the manager in London, or in any other MAERSK Line office that Maersk Line had not aligned the purpose of the model and dimensions or the priorities and focus with all stakeholders involved. This time, months were spent discussing the dimensions. There were 16 to begin with and everyone needed to agree on just two. Nonetheless, management was determined: Either we take it to the point where we believe it will work, or we drop the project entirely. So, what did it take to reach this point? The project group included all commercial departments as well as the local sales organisations and ensured an open and widespread dialogue with all major stakeholders. Five pilot implementations were carried out on four continents, ensuring proof of concept, local adaptability and adjusting supporting business processes – admittedly a quite lengthy process. But this meant that the segmentation could be made operational and rolled out quickly. The regional clusters made their own segmentation grid following the logic of the overall model, determining how to prioritise resources, what types of cargo to focus on, and the model gave everyone the same frame of work. Today, the manager in São Paolo makes decisions according to the same logic – the same understanding of segments and an aligned prioritisation between them – as the manager in London, or in any other Maersk Line office.

ANNUAL REPORT 2012

GLOBAL CLEANTECH REPORT 2012

GLOBAL CLEAN ECONOMY OUTLOOK BY THOMAS G. ARENTSEN

The Nordic region is often considered as leading within cleantech solutions and technologies

QUARTZ+CO

2010 2015

EUROPE NORTH AMERICA

14%

ASIA

198 243

15%

181

142 287

AFRICA SOUTH AMERICA

19%

14%

8 16

AUSTRALIA 13 19

THE CENTRE OF GRAVITY FOR THE CLEAN ECONOMY IS MOVING EAST AND WEST Forecasted accumulated growth development within cleantech between 2010 and 2015. Market size in USD billions.

GO-TOMARKET

VALUE PROPOSITION

BUSINESS STRATEGY

CHANGE AGENDA

Strategic focus area

From

MARKETS

BRIC countries, Europe and North America

Mega and large city focus on a global scale

BUSINESS MODELS

Risk diversification and avoidance

Risk sharing/risk management

BUSINESS CASES

Stand-alone (single bottom line)

Integrated system business cases (multiple bottom lines)

INNOVATION

Walled garden

Open garden

PRODUCTS

Engineering and “high end”

Scalable “mass production” developed to local needs

PARTNERS

DIY

Partner with lead turnkey providers

SALES AND MARKETING

“Push”

Push/pull (key opinion leaders)

CUSTOMER RELATIONS

Industrial

Institutional and industrial

Read more at www.quartzco.com and www.cphcleantech.com

ANNUAL REPORT 2012

STATKRAFT CASE

FROM WATER BY KRISTIAN KOLIND

COMPANY FACTS Based in Norway and owned by the Norwegian state, Statkraft is the European leader within renewable energy. Present in more than 20 countries, Statkraft’s power plants have a total

Statkraft has a total annual power production of 51.5 TWh, renewable percentage of 91%

installed capacity of about 17,000 MW. The bulk of the company’s energy production is generated through hydropower, but Statkraft also generates gas power, wind power and district heating and is a major player on the European energy exchanges.

20% THE EU AIMS TO GET 20% OF ITS ENERGY FROM RENEWABLE SOURCES BY 2020

ith a hundred years of experience from developing and operating hydropower plants, Statkraft expanded into wind power more than a decade ago, starting with onshore and later moving into offshore. In this process, a number of key questions were considered, including: Which technical choices have to be made to reduce lifetime costs to a long-term sustainable level? Which choices should be made in the supply chain to further drive reductions in investment costs?

Do we have (or can we build) the skills required to handle the increased technological risks and capitalise on alternative supplier and partner models (e.g. insourcing or taking out the contractor link)? The long-term bet

Statkraft’s home turf of Norway was well suited for the first onshore wind projects, and a number of projects in all stages from operation to development have been established in Norway, Sweden and the UK. The next leap is to take the turbines to the sea. Statkraft chose Norfolk for its first project, the Sheringham Shoal Offshore Wind Farm, built in co-operation with Statoil, which came into operation in 2012. Another project not far from this, the Dudgeon Offshore Wind project, is under development. The big, long-term bet, however, is the Dogger Bank project, which Statkraft and three partners have a licence to develop. It's the world’s largest offshore wind zone currently under development, placed far from shore in the shallow areas of the North Sea basin, roughly midway between the UK and Denmark.

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PERSPECTIVE

constant winds and room for larger wind farms. During the past couple of years, most large utilities have entered the scene, and sizable subsidy programmes have been put in place. In Northern Europe, especially, where coasts are dominated by shallow waters and powerful winds, many governments see offshore wind as the preferred option in the large-scale green energy transformation that's needed to meet the CO2 reduction targets. Naturally, the Americans and the Chinese are also looking to offshore wind as one of the future energy providers, and the industry is expected to grow to five times its current size by 2016. But establishing offshore wind farms is a huge undertaking with a complex supply chain and stakeholder landscape. This equals high risk and uncertainty. Therefore, the key challenge for wind farm owners is to manage this risk exposure while still working towards reducing lifetime costs.

FINDING THE RIGHT VALUE CHAIN PLAY IN OFFSHORE WIND The world’s ever-growing energy consumption and the introduction of binding CO2 reduction target agreements drive further momentum of green energy sources such as offshore wind. But despite the positive outlook, the industry is not yet mature. Of the total 227 GW global cumulative wind power capacity reached in 2011, only 2% were produced by offshore wind turbines. In the long term, however, it’s estimated that more development will take place offshore, with improved utilisation of stronger and more

Establishing offshore wind farms is a huge undertaking with a COMPLEX supply chain and stakeholder landscape. This equals HIGH RISK and uncertainty

are time consuming to produce and difficult to transport, both on- and offshore. In addition, there’s a substantial risk of unforeseen complications and errors due to the difficult circumstances under which the up to 200 metre tall turbine towers are erected, 200 km from shore and 50 km below the ocean surface. And imagine, once the turbines are in place, to be faced with the chilling task of boarding the turbine from a small boat bounced up and down by three-metre high, freezing waves to attach the array cables that connect the mills.

Supply chain complexity

However, this is by no means a walk in the park. An offshore wind project involves numerous challenges from turbine development and installation methods to cable-laying, mostly in high waves, far from shore. A clever supply chain strategy was needed to help Statkraft deliver on its ambitious growth plans. Understanding the convoluted supplier landscape was the first step, including considerations on how and when to pick the right suppliers and how to build the in-house support organisation. The next step is to map the road towards reducing lifetime costs, which is crucial to make offshore wind a long-term sustainable industry which isn’t dependent on subsidies. The offshore wind supply chain is quite complex: The industry contains only a few main suppliers of turbines, and many components

44% THE OFFSHORE WIND INDUSTRY IS EXPECTED TO GROW BY A CAGR OF 44% FROM 2011 TO 2016. SOURCE: MAKE CONSULTING

At this point …

Entering the offshore wind industry isn’t done in a flash. Statkraft and its partners expect to receive the consent for the first 1.2 GW project in 2014 and will then be ready to start pre-construction work. To achieve this, however, supplier choices must be considered already now for Statkraft to be prepared to move into new waters.

SUCCESSFUL ESTABLISHMENT OF OFFSHORE WIND FARMS REQUIRES SMOOTH CO-OPERATION THROUGHOUT THE ENTIRE SUPPLY CHAIN

Onshore substation

Onshore cable

Port

Offshore export cables

Offshore substation Substructure

Wind turbine manufacturers

Structural fabricators

Electrical suppliers

Marine contractors

Topside steelwork

Array cables

Substructure

Wind turbine manufacturers

Equipment

EPCI contractors

Cable installers

Cable suppliers

Port operators

ANNUAL REPORT 2012

EMPLOYER BRANDING

ONE SMALL STEP

NORWAY Our office in Oslo displayed its magnetism as we saw an impressive 25% increase in the number of received applications from 2011 to 2012 — now that's a force of attraction.

BY NICLAS NÆSTOFT JAKOBSEN

DENMARK In the Danish 2012 Universum survey, Quartz+Co has certainly claimed its position and now ranks third among management consulting companies. SWEDEN Our Swedish office busied itself connecting to the world by hosting seven sparkling student events in 2012 – including two large events at universities, case events and a student dinner.

One of three – in all three states our goal of becoming one of the top-3 management consulting companies in Sweden, Norway and Denmark

hen Quartz+Co took its first baby steps, we coined the phrase “One of three – in all three” as a label for our goal of becoming one of the top-3 management consulting companies in Denmark, Sweden and Norway. Within employer branding, our ambition is even higher. “One in all” articulates the seemingly impossible ambition of creating the strongest employer brand within management consulting in Norway, Denmark and Sweden. It might still seem a hairy and audacious goal, but with the latest numbers from the 2012 Universum ranking, the seemingly impossible seems within reach. This year, Quartz+Co took a major leap forward and moved up the Students getting ready to present their case Nordic Ideal Emduring our recruitment camp in Copenhagen ployer ranking from last year’s position as number 45 to 39. In Denmark, we have moved from 39 to 34, and find ourselves as number three among management consulting companies.

No need for euphemisms: we’re quite proud of these results. Next practice recruiting

We exert ourselves to recruit the best, brightest and most creative people who are indeed able to tackle and solve complicated issues and engage and mobilise people when doing so. As in other aspects of our business, we like to do things a little differently. Therefore, in our Copenhagen office, we have changed our approach to recruiting in order to learn more about the candidates and to give them a chance of getting to know who we are. Now, selected candidates are invited to participate in a two-day recruitment camp, enabling us to introduce Quartz+Co and test the potential future employees both individually and in team settings. “There are several reasons for introducing the new two-day recruitment camp. Firstly, we want to get to know our potential new colleagues better and give them a chance to learn more about us”, says Dorte Bregnhøj Brehmer, Head of People at Quartz+Co. “Secondly, the traditional recruitment process focuses on testing problem solving and numerical skills, but in consulting, personality and interpersonal skills are just as important. Finally, we hope to give the students a great experience and an opportunity to learn more about themselves and provide them with some concrete tools they can use in their career, whether at Quartz+Co or elsewhere”, Dorte Bregnhøj Brehmer concludes.

QUARTZ+CO

THE BIG BLUE

DEFINING WHAT CAN’T BE DEFINED BY TORSTEN HVIDT

hen meeting new clients we’re often faced with the question: So, what makes you different from other management consulting companies? With a reference, not to Mao Tse-Tung’s Little Red Book, but more to Luc Besson’s epic movie Le Grand Bleu, about competition, friendship, achievement and transcendence, we have sought to articulate such an answer. The Big Blue is an outline of the values and aspirations to which we strive to adhere. The writing of The Big Blue was undertaken with hesitance, not because we feel uncertain about our values, but rather because the articulation of these values is ever-changing. Like a snapshot of a running child. It will give you an immediate impression of the child and its whereabouts, but within minutes the child could be in a different context, and within a year the child might have grown to look completely different. On the one hand, we don’t want the words that shape

our culture and fuel our magnetism to freeze into a fixed definition and with time become stale and outdated. On the other, we want to present a strong narrative, interwoven with the values and beliefs of our civilisation. The straight line from inner conviction to outer action is the backbone of all authenticity. Such authenticity arises when members of a civilisation share the same core values as well as the underlying beliefs. Not meaning that everyone has to think or be alike. Quite the opposite, actually. Coherence is possible when each of us finds our own narrative: our own way of articulating the meaning of timeless values like results and relationships. And when each of us has a personal account and explanation of how and when we deliver excellence, diversity, civilisation, followership, flexibility and iconicity.

Coherence is possible when EACH OF US finds our own narrative: OUR OWN WAY of articulating the meaning of TIMELESS values like results and relationships

SIX KEY BELIEFS

Excellence

Diversity

Civilisation

Learn more about The Big Blue at www.quartzco.com/the-big-blue

Followership

Flexibility

Iconicity

ANNUAL REPORT 2012

DANSKE BANK CASE

BUILDING THE BRIDGE AS YOU WALK ON IT BY JESPER ADELTOFT

he past years have been turbulent times in the world of business, not least in the financial sector. Banks face tougher regulations and stricter demands to their capital and liquidity position. Many private customers lost faith in the banks during the financial crisis, and the huge task of rebuilding trust in the industry is only in its early innings.

COMPANY FACTS

Eivind Kolding took over as CEO of Danske Bank in 2012, and, together with a new management team, he carried out an extensive organisational transformation.

Danske Bank is one of the leading financial enterprises in Northern Europe. Danske Bank is organised in three business units: Corporate and Institutional Banking, Personal Banking and Business Banking.

Danske Bank went from a six-stringed, country-focused organisation to having a segment focus with three business areas:

PERSPECTIVE INVENTING THE FUTURE When moving into unfamiliar territory, it’s common practice to look to the experience of others and learn from those who do well. But what to do when bold and innovative moves are needed to develop a unique proposition in the market, get ahead of competition and be the first business to plant a flag in an unexplored field? This is a perpetual challenge for first movers in every industry.

Corporate and Institutional Banking, Business Banking and Personal Banking. One of the new management team’s first priorities was to develop a new strategy for Danske Bank. For Personal Banking the reality was that the bank was losing money, more in some markets than others, that many customers were unprofitable, that customer satisfaction was low, and that the bank no longer had a distinct position in the market. So, the task for the new management was to execute a financial turnaround and simultaneously define the road to a competitive and profitable future for the bank. The future of personal banking

The development of new technologies and platforms will undoubtedly continue to change retail banking. The Nordic countries have an extraordinary position as the internet penetration and the share of the population using online banking are close to unmatched. Danske Bank saw this as an opportunity to embark on a journey to take personal banking to the next level, allowing customers to serve themselves on state-of-the-art digital platforms when performing their daily banking transactions while offering more service and tailored counselling to customers with complex needs.

There are ups and downs of pioneering. You develop invaluable knowledge and experience about new products or technology, creating an asymmetric relationship between your business and competitors, leading to temporary monopolies. But it requires resources and time, it most often leads to costly experiences, and your competitors might be able to follow your moves with a substantially smaller risk and investment. So, how do you make sure that your business is one of those for whom the benefits outweigh the risks? The key is to keep looking into the future and learn from experience. Those who plan well to exploit the pioneer’s position and dedicate resources to consolidate their advantage will most likely come out successful in the long term.

QUARTZ+CO

The internet penetration rate and share of online clients make the Nordic countries a good platform for taking retail banking into the future

Leading change

In order to agree on the scope of the strategy and the new direction, the management team needed to create alignment on a number of parameters. The first step was to establish the baseline for the new organisation and a joint view on the strategic direction and key levers in order to obtain a solid starting point for defining the future ambition. The next step was to translate the strategy into executionable programmes and concrete projects, including tools for following up and measuring progress. Lastly, it was crucial to mobilise the organisation, define a strong governance model and initiate execution. In today's fast-paced business environment, most large companies will recognise the dilemma of handling daily operations and structural changes in parallel. Danske Bank is no exception, and therefore an agile virtual organisation with the sole focus of transforming the bank has been created, while the remaining employees focus on operating the bank efficiently. This dual focus on running the bank while changing the bank will enable the tightrope walking of ensuring short-term financial sustainability while setting new standards within four areas: Advisory services & solutions, Customer interaction, Transparency & financial strength and Responsibility in order to make Danske Bank the most trusted financial partner for its clients.

The development of new technologies and PLATFORMS will undoubtedly continue to CHANGE retail banking

THE JOURNEY TOWARDS THE FUTURE BANK WILL CHANGE THE ENTIRE BANK

From focus on the entire market to clear segment prioritisation.

WWW

From independent channels to integrated channels.

BANK WWW

BANK

From broad physical footprint to the best self-service platform.

BANK WWW

From reactive service to proactive care. BANK

BANK

ANNUAL REPORT 2012

BRINGING TALENT2TALENT

WHEN BANANA TREES GROW FROM HEADS “This kind of CSR project really puts our knowledge and expertise into play by helping the start-ups unfold their potential. Instead of sending ‘a bag of money’ to appease our consciences, we can assist these entrepreneurs in creating tangible results, which in time will lead to new jobs and growth in the local community and, hopefully, create sustainable change”, explains Jens Friis Møller.

Matching supply and demand

hen Scandinavia turned dark and cold in November, four Quartz+Co consultants headed towards distant skies, more precisely the fourth largest city in Africa, Nairobi, to do some good. For the second consecutive year, Quartz+Co partnered with 88mph; a social platform with the objective of putting Kenyan entrepreneurs in contact with mentors and potential investors from all over the world.

The team had prepared thoroughly, trying to match their skills with the needs of the projects. For instance, a manager of a Danish supermarket was the mentor of a pharmacy chain wanting to go online, and Jens Friis Møller, an avid gamer himself, was connected to a mobile gaming project.

However, this year the four consultants were not alone on their mission: a group of managerial talents from prominent companies such as Novo Nordisk, Bech-Bruun, Coop, LEGO, BDO and Grundfos joined the team of Quartz+Co consultants, travelled to Nairobi and used their experience to challenge, stimulate and coach local entrepreneurs.

And however different the Kenyan start-up projects were, they all had a good idea and motivated talents determined to develop their business into something bigger. And the learning experience went both ways. By getting in

The visit was part of a three-month accelerator programme called Talent2Talent, during which eight local start-ups received a shared working space and coaching from a group of mentors, who were ready to guide the startups and help them develop their businesses, plus an initial investment. Unfolding potential

“We did a presentation and DEMO at Barclays which was fantastic. I also used YOUR GREAT suggestion to utilise the whiteboard to explain things and could immediately NOTICE the difference in engagement”

While in Kenya, the managerial talents and Sophia-Marie Klages, Sonu Banga, Jens Friis Møller and Stefano Zorzi from Quartz+Co focused on scrutinising the start-ups’ business ideas while assisting the local teams in Duncan, Co-Funder, Manyatta Rent identifying key priorities for the immediate future and developing a convincing pitch to potential investors. The touch with the entrepreneurs, the participating idea was for the mentors not only to offer advice, but also to be part professionals got an invaluable chance to be of the solution and get their hands dirty, for instance by joining exposed to businesses with cultural differences customer meetings, negotiating with potential partners or assisting and challenges different from what they see by writing part of a business plan. in Scandinavia.

QUARTZ+CO

“The object of this project was to drive businesses and develop local talents, but also to deepen our understanding of emerging markets and the cultural differences at hand. It was a spectacular experience, and I really think that we succeeded in making a difference together with these guys!” says Thomas GjølTrønning, Partner in the law firm Bech-Bruun.

There is a good chance that NEW BUSINESSES will grow and thrive in Nairobi

A Kenyan proverb states, “However much it rains on you, no wild banana tree will grow on your head”, meaning that things might not always turn out the way you want them to. Time will tell if perhaps trees will grow into the sky, or wild banana trees grow from heads, but at least there is a good chance that new businesses will grow and thrive in Nairobi. Status update

And the teams of talents will stay in touch, Sophia-Marie Klages confirms. The mentor team is still in ongoing contact with the teams in Nairobi and can report that some of the teams have received additional funds while others are now better prepared to stand on their own feet. “All of the start-ups now have a proven business concept, a clear action plan to grow their business, and some even have a few customers signed up already, which is really rewarding to see”, Sophia-Marie says.

We strive to use our knowledge and experience to create sustainable change. This year the trip went to Kenya where a team of consultants and good relations coached local start-up companies in developing their businesses.

EXAMPLES OF START-UPS Manyatta Rent

Mdundo.com

Gamsole

Manyatta Rent wants to enable tenants in Kenya to pay rent via Mobile Money by offering an estate management system (EMS) for commercial real estate agents in Kenya. The EMS makes it easy for tenants and landlords to pay and receive rent. Manyatta Rent charges a fixed fee per transaction to generate revenue.

Mdundo makes it possible for artists to monetise music downloads to phones through scratch cards similar to those used for airtime credit. The cards are distributed free of charge to the artists, who sell them directly to their fans – and the artists keep all the generated cash, disrupting the current payment system, through which the artists only get 10%.

Gamsole develops games for mobile phones, targeting African users. A team of four Nigerians build social games that are based on day-to-day African stories inspired by local history, customs, art concepts, games and current events. The company’s revenue comes from paid apps and in-app purchases.

57% 57% BNP GROWTH IN KENYA IN 10 YEARS

Talents from Quartz+Co and six of our clients packed up to mentor and guide start-ups in Nairobi

ANNUAL REPORT 2012

SAS CASE

BALANCING MEANS AND AMBITION BY KARINA KIRK AND CARL CHRISTIAN HAMMAR

he challenges facing SAS in 2012 constitute a classic example of a turnaround situation: A company in serious financial distress requiring structural initiatives to address the issues at hand.

30% 30% MORE COSTEFFICIENT CUSTOMER-CENTRIC ORGANISATION

When Eivind Roald became EVP of Sales and Marketing in SAS on April 1, 2012, he entered the company with a vision of changing the approach to sales and of reigniting the SAS brand. However, his top priority in the short term was to cut costs significantly given SAS’ difficult situation. In order to deliver the change, he launched an organisational redesign process and a rebranding process. The baseline Sales and Marketing organisation was set up in line with the traditional airline sales model, leveraged by the traditional sales channels and oversized in some markets. SAS had already gone through several cost-focused restructuring programmes over the last years, and Eivind decided to start with a blank sheet this time. “We needed to consider everything. Low-cost competitors are undermining our value proposition with

PERSPECTIVE ADAPTING TO THE NEW RULES OF AVIATION

cost-efficient business models and not the same history. In most cases, price is what determines the customer’s choice, and SAS must create more value for our customers”. Accelerating the commercial vision

The organisational redesign process was part of SAS’ survival programme 4XNG and set out to define a new and more cost-efficient sales set-up and approach better aligned with key market trends. The process leveraged an analysis of key changes in purchasing behaviour and drew on the commercial excellence toolbox to identify cost-out potential based on a deep understanding of where the cost cuts would accelerate the commercial vision rather than hurt organisational execution. “SAS has a unique position in a challenging market and in the minds of Scandinavians. We need to exploit that platform and build on current trends in customer behaviour to build a new position and sharpen our competitive edge”, Eivind Roald Eivind Roald says. EVP of Sales and Marketing

The global aviation industry is in the unfortunate situation of being subject to both structural and cyclical pressure, leaving the industry incumbents vulnerable. The structural change stems from more than 10 years of intense competition and price

“SAS has a unique position in a challenging market and in the MINDS of Scandinavians”

pressure from the entry of low-cost carriers, fundamentally changing the rules of the industry game. Current cyclical elements added on top are dips in business travel demand spurred by the global economic crisis and record-high levels of jet fuel prices.

QUARTZ+CO

1,356 destinations worldwide by SAS and partners

The order of the transition was important given SAS’ situation. SAS was founded in 1946 as a consortium A 30% more cost-efof the three national airlines in Denmark, ficient customer-cenNorway and Sweden. tric organisation is in SAS is the first airline in the world to achieve IATA place. “We’re moving Fast Travel Award Platinum status. This means from a structure based that SAS offers over 80% of the IATA’s selected on geography, funcself-service options to its passengers throughout the journey. tion and channel to a global, functional organisation. Now we’re ready to launch our rebranding initiative and take SAS on a journey towards future positioning and profitability”, states Eivind Roald. COMPANY FACTS

Making travelling easier

SAS is introducing two brand new service concepts in Scandinavia and Europe: SAS Go, for customers who want a lot, and SAS Plus, for customers who want even more. These new concepts have been developed in close co-operation with customers and include a new and improved onboard service concept. As stated by Eivind Roald: “We want to make travelling easier for our customers. And this includes SAS Go and SAS Plus. When we developed the new concepts, we based our work on our customers’ needs rather than on industry standards”.

KEY MARKET TRENDS INFLICTING SAS’ SALES MODEL

$ Consumers and professionals integrate as one target group, “prosumers”, as work and free time get mixed.

Mobile devices and social media are used more frequently in purchasing.

Increased importance of flyer in purchasing decisions.

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Clear channel shift towards online/mobile, with a decline in corporates with negotiated agreements.

Strong growth in the leisure segment.

ANNUAL REPORT 2012

BY DORTE BREGNHĂ&#x2DC;J BREHMER

At Quartz+Co, we use the personality type indicator MBTI in our team constellations and daily work

High-performing teams ACCOMPLISH more TOGETHER than individual team members can achieve WORKING ALONE

he world held its breath when Felix Baumgartner jumped out of the worldâ&#x20AC;&#x2122;s largest helium balloon from an altitude of 38,969.4 meters, falling faster than the speed of sound during 4.20 minutes. Although Felix was the one taking the fall, the achievement was only made possible by

the hard work of a team of top scientists, doctors, engineers and many other dedicated individuals. Such an accomplishment requires courage, determination and perfect execution. And the skills of a diverse team coming together. At Quartz+Co, skydiving from high altitudes is rarely on the task list. However, we also believe that a key driver in creating remarkable results is diversity.

QUARTZ+CO

MBTI TEAM COMPASS E

anal

ys i

E J

visi

c tu

ti o

f le

c ti o

peo

ple F

ail

o ce

d et

Contact to others Experiments Action Learning Talking Calm Writes Reads Thinks Works alone Works without being interrupted

Challenges Changes Enthusiasm Inspiration Visions Creativity The familiar Step-by-step Realistic Applied knowledge

Harmony Values Beliefs Empathy Needs recognition People-oriented Follows the plan Decides quickly Task-oriented Plans Finishes

Juggles project opportunities Delays decisions Pressed for time Pros/cons Systems Objective Clarity Critical Ideas

THE COLLECTIVE QUARTZ+CO MBTI PROFILE SPLIT IN PREFERENCES

80 + 20

80% Extroversion 20% Introversion

55 + 45

Mapping the team DNA

Early this spring, three of our consultants came together in a new team set-up to reflect on how to use the personality type indicator tool to tackle their new assignment. “The MBTI team compass helps us identify potential scenarios to be aware of in our team work. We’re all quite different, and some of us have rather similar ways of structuring our work, meaning that we have to take notice that others might have a different approach. Also, the compass guides us in terms of using our collective strengths to achieve higher performance”, explains engagement partner Morten Saitta Bregendal.

70 + 30

55% Sensing 45% Intuition

“I found it to be a really good tool to frame our different working processes”, says team member Sophie Fabricius. “It creates a positive structure for articulating our differences, since all profiles have something to contribute”. “Our MBTI compass outlines a common framework which helps address potential issues upfront and provides a guide for discussing our differences”, concludes team manager Nikolaj Bisgaard Nielsen.

70% Thinking 30% Feeling

60 + 40

60% Judging 40% Perceiving

Our ways of working with DIVERSITY EMBRACE and recognise individual differences and go beyond mere TOLERANCE to truly appreciate and LEVERAGE our differences

Thinking together

Building on each other’s strengths

The term diversity has become a bit of a buzzword, and as is the case with such expressions, they tend to lose their meaning over time. However, working with diverse teams in a structured manner holds great advantages. Studies of teams’ problem-solving abilities have shown that high-performing teams accomplish more than what the individual team members could achieve working alone. Therefore, creating a conducive environment in which all team members can provide their unique contribution is crucial. Our ways of working with diversity embrace and recognise individual differences, and go beyond mere tolerance to truly appreciate and leverage our differences.

So, we’re all different, and that’s a good thing. However, it requires some finesse to articulate the intangible and sensitive subject of personality types. There are many roads to Rome, and the one taken in Quartz+Co is to use the Myers-Briggs Type Indicator, a personality indicator that measures individual preferences on four dimensions 1. How we get our energy 2. How we perceive information 3. How we make decisions 4. How we organise our lives We find MBTI to be a great instrument to explore the profile differences and strive to leverage the strengths of all team members as well as to steer clear of potential blind spots in a team.

Let diamonds stay rough Some speak about people being “diamonds in the rough”, needing polishing to fit in. To us, it’s quite the opposite. We’re looking for people who stand out, and have an edge. By leveraging diversity – ensuring that like meets unlike, femininity meets masculinity, function meets form, capitalism meets humanism and strategic analysis meets behavioural change – we will tackle and solve our clients’ most complex problems and engage and mobilise people in the process.

Annual report 2012

QuartZ+Co

Putting words to the intangible

Remembering some of the iconic moments OF 2012

Iconicity is a self-invented word hinting at the ability to deliver iconic moments externally and internally. Iconic moments are the everlasting images that clients and colleagues see before them when asked to describe

Club Q+ in Copenhagen

Each year, colleagues from Denmark, Sweden and Norway gear up for the annual skiing trip. Once more, the setting was beautiful, the snow was crisp, and the après-ski was elated and somewhat hazy. Some less experienced mountaineers had trouble aligning their skis ...

Celebrating Christmas

C DE

JA N

OC T

R MA

P SE

APR

U A

On a cold February night, Quartz+Co invited 20 students to the warm bosom of our office, the kitchen, and with chef Jesper Paustian and consultants as wingmen, their culinary skills were challenged.

J U L Y

DHL We wouldn’t want to miss a race. And therefore, Quartz+Co is a recurring contestant in the DHL Relay in Copenhagen. Once again, we enjoyed a pleasant evening where fast running, barbecue and draught beer all came together.

Read more at www.quartzco.com/whoweare/iconicity

Our offices in Copenhagen and Stockholm opened their doors to connect with good relations and offer some red drinks on a black March evening. In Stockholm, the popular rapper Jason Diakité – a.k.a Timbuktu – gave us a taste of his reggae-infused tracks.

CommerciEl Awards 2012

Quartz+Co was the main sponsor for the annual Commerciel Award show at Aarhus School of Business. The versatile Danish media darling Adam Duvå Hall hosted the event in front of an enthusiastic crowd. Students competed to provide the fiercest definition of “Next Practice” in consulting, and the Talent of the Year prize was presented to Torsten Lauritsen.

Travelling the world

As always in July, the corridors were awfully quiet while consultants and in-house colleagues travelled the world. Rune Petersen delivered this year’s most iconic holiday snapshot.

Club Q+ in Copenhagen and Stockholm

N E JU

Our retreat in Båstad went down as one of the most iconic events in 2012. On Centre Court, a young team consisting of brand new junior consultant Joen Moth-Poulsen and consultant Tommy Høy demonstrated next practice tennis and won a legendary victory over a team of Stockholm partners. Indeed, this bodes well for the future of our civilisation.

Båstad retreat

In September, our junior consultants took a small Everest climb as Galdhøpiggen, Northern Europe’s highest mountain, was conquered. But we like to think there was more to it than physical achievement. Edmund Hillary, the first man to reach the summit of Mount Everest (with Tenzay Norgay) put it this way, “It’s not the mountain we conquer but ourselves”.

Junior Consultants in Norway

Cooking Challenge in Cph

Christmas is the peak season for childish souls and traditions. In Copenhagen, we invited colleagues, clients and their families to see Dickens’ A Christmas Carol in Tivoli. Big and small were enchanted by the V Christmas ghosts.

It’s a tradition for our office in Copenhagen to host Club Q+ twice a year. So, as days shortened and a chilly breeze set in, we opened our doors to 600 good relations to share some invisible treasures with us while the sun was setting, accompanied by groovy tunes and colourful drinks.

be mistaken for the results we work hard to deliver. We know when we experience a true iconic moment – because we feel it. Here are some of the images that have burnt an impression onto our eyelids in 2012.

Skiing trip

Talent2Talent in Nairobi Quartz+Co and a group of talented professionals from our network of clients joined forces and used their combined experience to challenge, stimulate and coach Kenyan entrepreneurs to obtain the investments needed to kick off their dreams.

Quartz+Co. Iconic moments lurk in everything we do, from big events to small conversations. And we're dedicated to creating them. But like magic, iconic moments are impossible to put on a formula and must not

Soccer Challenge 2012

Club Q+ in Oslo The second Club Q+ in Oslo was a midsummer night’s celebration of our beautiful ”new home” in Wergelandsveien. Shrouded by smooth jazz melodies in the garden, no less than 130 friends of the house joined us for a glass of wine and cosy conversation as sunlight turned into twilight.

To many of us, the Quartz+Co Soccer Challenge has become one of the highlights of the year. As is with tradition, little was changed in this year’s tournament: a handful of the most prominent professional service companies in Copenhagen were invited to join us for a day of soccer and good, old-fashioned fun. And let’s not get too much into details about who won …

Annual report 2012

QuartZ+Co

Putting words to the intangible

Remembering some of the iconic moments OF 2012

Club Q+ in Copenhagen

Celebrating Christmas

C DE

JA N

OC T

R MA

P SE

APR

U A

On a cold February night, Quartz+Co invited 20 students to the warm bosom of our office, the kitchen, and with chef Jesper Paustian and consultants as wingmen, their culinary skills were challenged.

J U L Y

Read more at www.quartzco.com/whoweare/iconicity

CommerciEl Awards 2012

Travelling the world

As always in July, the corridors were awfully quiet while consultants and in-house colleagues travelled the world. Rune Petersen delivered this year’s most iconic holiday snapshot.

Club Q+ in Copenhagen and Stockholm

N E JU

Båstad retreat

Junior Consultants in Norway

Cooking Challenge in Cph

Skiing trip

Soccer Challenge 2012

ANNUAL REPORT 2012

KEEP ON CONNECTING

ONWARDS

his is the end of the 2012 annual report from Quartz+Co. Thank you for reading – we hope you found it worth your while. Despite a number of apocalyptic projections for 2012, the world didn’t end. No doubt, to many businesses, 2012 was another tough year, but we have seen that it was also a year of progress and optimism. And we hope that the stories in this report helped convince you that even in difficult times, the labour of men can achieve much. Stories of tough people breaking new ground, of turning financial struggles into new visions, of doing business to turn the world into a better place, of finding growth pockets in a Europe struck by crisis, of hopes, dreams and ambitions. Stories of the sun also rising.

In Quartz+Co, we have hopes and ambitions for 2013. We’re determined to foster and consolidate our ability to win with our clients and to claim our position as the people-centric company that delivers tailor-made solutions. In 2012, we created results across six of the world’s seven continents – primarily through our work with our clients, but also through our partnership with MEC Intelligence in India and our CSR venture in Africa. We will continue to connect to the world in 2013 in order to increase our relevance and to help our clients tackle and solve complex issues, and to engage and mobilise for change and growth. After all, that’s why our sun also rises.