Andreas Widl: Innovationsfan,“Unternehmensumkrempler“, Freigeist - Mission: Machen!

Good morning, dear Christian. I'm amazed. I don't know what to say. That was a very apt summary, I think.

Well, there are many reasons. I set the bar high with my studies. I had math and physics as advanced courses, but I wasn't a great physics star. What I always enjoyed was tinkering. I had a lot of fun with remote-controlled cars and planes. Luckily, my father had a workshop with a lathe, and I was allowed to work with it as a nine-year-old. In German class, I preferred to develop a new bearing for a remote-controlled car rather than deal with texts. The blame goes to my brother-in-law, who is a physicist. I didn't know what to do, but it should be technical. Sports were ruled out for studies because my father said sports are for recreation. So I considered mechanical engineering, but I had already practiced that for 10 years in the basement. Electrical engineering seemed suspicious, chemistry I didn't understand, computer science was too one-sided. So it became physics. Honestly, I didn't want to commit, and physics is a good study where you can decide later what to do with it. I thought it was business administration, but apparently I could suggest physics to my kids too.

It was at least the way not to commit early. Alongside my studies, I could always work. I started writing software, which almost kicked me out of the pre-diploma because it was more exciting to write software at night than to learn during the day. I had various side jobs and got to know companies as a working student. Then I could think about what I wanted to do later. I was very lucky to join a think tank after my studies. I was employee number 5. My job description was 'invent'. I spent 7 years there and was allowed to invent. About 30 patents were created. The current GPS-based toll system was developed there because we had the freedom to unfold. The great luck I had besides the job was having a fantastic managing director who saw things in me that I didn't know were there. I learned a lot for my later career. So it was less research and more the idea of solving old problems with new technologies, which has probably accompanied me my whole life.

I think he had a method. We nicknamed him 'exploitation through motivation' because he really pushed us to our limits. We worked through the night to finish a trade fair or develop something. He had a very high standard for innovation and graphic design, and at the same time he was an excellent coach. He saw that I had ideas and helped me implement them. He gave me freedom and later leadership responsibility. I learned how to bring diverse teams together to achieve a common goal. He made himself small and made us big. I learned a lot from him and still benefit from it today.

After seven years in a think tank, you can become unhappy even in paradise. My father was entrepreneurial, so I thought it was time to see something completely different. I went to GE Capital, which was a reinsurance company. I became an assistant to the board and helped bring structure. At GE, I learned how to run a large company with few initiatives. Jack Welch drove four initiatives: globalization, service, Six Sigma, and e-commerce. That was interesting, but after five years I had enough. Then I heard about a high-tech company in Switzerland, Unaxis, later Oerlikon. They built coating systems for flat panel displays. I was supposed to take over business development, but my American boss asked me to become interim CEO. I agreed, but not as interim. Suddenly I had 500 employees and knew nothing about the product, customers, or finances. The company had huge financial problems. I had to write off hundreds of millions. We restructured, cut half the staff, closed legal entities. After 15 months, we turned the company around and changed the business model from semiconductor coating to solar cell production. The key was to set three goals: final acceptance test, cash, and IT. All measures were aligned to these. It worked. For creativity you need freedom, for restructuring you need clear targets.

I learned to communicate as much as possible. You need your own leadership team. Since we couldn't replace people, I worked with those who were there. I asked for their opinions but made the decisions. I held all-employee meetings every two weeks. I told them honestly about the problems: we had miscalculated, the systems weren't working, we had huge operational risk. We changed the business model to service and solar. It worked because of the solar boom. It takes courage and humility. Courage to change course, humility towards the engineers who weren't at fault. I also had to defend myself to headquarters. I told them I was cleaning up their mess. When things go really wrong, you have a lot of freedom. My career has been driven by a desire to act entrepreneurially without constant justification. That leads to jobs in crisis, but you have the privilege of freedom. When you succeed, you build a strong team.

Finally, a company where everything was going well. It was 2008. I came on board with 1,500 employees, 10% EBIT. Then order intake dropped 50% from April 2008 to April 2009, and revenue 35%. There was a standard job protection agreement, so we couldn't lay off people quickly. I'm glad because the crisis was shorter than expected. We took all measures to break even despite the 35% revenue drop. Then the market turned, and with our new cost base, EBIT went from zero to 7%, 14%, even over 20%. Never waste a good crisis. The job protection agreement meant we had enough people for the growth. Every market change brings opportunities; you just can't rest. There was no sense of urgency, but I said we have a problem and we will take immediate, measurable actions. We restructured the company.

I had sales, marketing, and strategy. Strategy had never been in the board at Samson. Let me say a few words about Samson. It's a dream to work for such a company. 116 years old, privately owned, through all phases of German history. It builds valves, mainly control valves that regulate flow and pressure, but also a large portfolio of on-off valves like ball valves and butterfly valves. These valves are used wherever media flow: steam, water, liquid, gas, very cold like liquid hydrogen, very hot like molten salt at 600°C, high pressure up to 1000 bar, toxic gases like phosgene, or tasty like beer and wine. So I work for a company that builds a huge bouquet of valves for all applications and serves many market segments: chemicals, food, pharma, industrial gases, district energy, and others. That's good because we are not dependent on oil and gas and avoid cyclicality. It's a wonderful hidden champion, a family business with 4,500 employees worldwide.

So I came on board, and two years later I became CEO. Under my leadership, the company first crashed. I invested heavily in digitalization, processes, and standardized workflows. I introduced ERP for the third time. You need good processes before ERP. People kept saying 'it's different here'. I had to convince them: no, it's not different. We get orders, build valves, deliver, and do service. It can't be that different. The challenge was that everything had gone so well in the past that there was no sense of urgency to change. That transformation from a manufacturer to a real industrial company with standardized processes, where I can scale and produce in a network, was a long road.

Ten years ago, we were very weakly digitalized. We had three different ERPs that didn't communicate. We introduced SAP in Frankfurt and are now rolling it out worldwide. It was a huge challenge; the high-bay warehouse didn't communicate with SAP, causing global delivery problems. Now we have much better transparency on contribution margins and can make entrepreneurial decisions. Digitalization is more a cultural issue than a technical one. It creates transparency that is not always welcome. We have high vertical integration, which is good, but we lacked transparency in production. Now we have instruments we can trust.

We first take the valve apart into all its subcomponents, then the few parts that are in the valve are manufactured separately, and then it comes back together like a miracle, is tested, and goes out. It is served by a relatively large machine park. We had the problem that I constantly had requests from production for new machines, and I asked, 'Can someone tell me if the machines are even running? What is the utilization?' No one could tell me. So we invested in an Israeli startup to detect the condition of valves early through sound analysis—cavitation is the key word, those micro-bubbles that destroy even the hardest metal. We programmed neural networks and took profiles, and it actually worked, but it was too expensive. However, we used that technology to connect the machines with just a sound sensor and a current sensor. With those two pieces of information, we could detect whether our production machines were on, idling, or off. In the first COVID year, we increased our machine productivity by up to 30%, saved €70,000 in energy costs and €700,000 in personnel costs by reducing from three shifts to two with the same output. That also reduced the risk of infection by 50%. This kind of smart digitalization now takes 30 minutes to connect a machine, and I can see it on my phone and iPad. We put up displays so everyone can see how the other shift worked. This digitalization led to transparency that made us operationally much better. We then expanded the algorithm to understand what we produce by recording sound data. We found that we had similar sound patterns in the morning and afternoon, meaning we produced the same thing but changed setups twice in between. So it's not just about whether the machine is running, but whether it's being used for the right task. Now we optimize the entire value stream through this kind of digitalization. It's fun. There were 8 million reasons not to do it, but the production colleagues said the tool is good and we become better, so it gained its own momentum. My job is to set impulses and encourage change, but then it has to become a self-runner. That is perhaps one of the big changes: we increasingly have a culture at Samson where ideas come from the base, less top-down, more exchange, less hierarchical, thinking and working in a network with the goal of making the whole group better.

I described earlier that I was employee number 5 at the Mannesmann pilot development, surrounded by geniuses. Ironically, 25 years later, I founded the Samson pilot development together with my CTO because we thought we needed the same thing: a think tank, a small, fine team that thinks ahead and proves things technically without making a product. We located it in Munich about 7 years ago, and it has three tasks: robotics, AI, and scalable software systems for edge cloud functionalities, open source. How can we get intelligence into any infrastructure, whether it's valves in process industry or self-organizing drones and robots for service in chemical industry with explosion protection, safety, security? I try to spend one day a week there to engage with the future; the other four days are more about past and present. It's absolutely inspiring. They have pre-developed some things that I can take back and hopefully excite colleagues in Frankfurt. Our industry is extremely conservative. In my view, if we had intelligence in the process field, we could save 30% of energy costs immediately. For example, if a pump that uses electricity to move media could talk to the valve that dissipates that energy through noise and heat. We built a control loop with KSB called iQation where valve talks to pump, and it significantly reduces energy consumption. What we want to do with the pilot development is to transform from a valve manufacturer into a provider of process intelligence. That means valves must first become intelligent: have sensors, communicate, get data out of the field, then run algorithms and AI for pattern recognition to identify obvious waste. That's what drives me. The keyword is biologization of industry. What if we orient ourselves by nature? Nature knows no waste; it always optimizes for energy. One of our visions at Samson is to use our valves and process intelligence to create a field where swarm intelligence and self-organizing substructures emerge, helping our customers save energy and prevent waste. Suddenly we become a different company, not just a valve manufacturer. That's the journey I try to communicate. Of course, I sometimes get feedback that I'm galloping too far ahead, but it's not friendly fire.

That is indeed a challenge. In the process industry, especially chemicals, it's all about safety and security, so they are very reserved about giving out process data. That's why our system runs on-premises, closed in the plant, or optionally in the cloud. You're absolutely right that this reluctance to share data is innovation-inhibiting. I wish we would talk not only about safety and security but also about sustainability. If we have those three points, we can't afford waste anymore, and then we should be open to more transparency and digitalization. You can encrypt and process the data so there's no risk of knowledge drain. But currently, safety and security are paramount, and I understand that completely. Operating a plant is a huge responsibility. But it often leads to a situation similar to data protection in Germany—sometimes I wonder who protects us from data protection. For example, the digital health card: I would like an app where I decide where my health data goes, and if I go to the dentist, I would give him my blood values because that could enable a completely different diagnosis. Technically everything is possible, but I don't know why it's not happening. Data gains mass and momentum when combined with other areas, creating patterns for AI. We are not using that today. I am not satisfied that we repair valves every day without every service center worldwide collecting and aggregating data in a structured way to build information about which applications cause failures. We can no longer afford not to collect data in a structured way to run algorithms.

A few years ago, we had the situation that despite growing sales, we were not making more profit; our break-even sales went up because the complexity of our production increased. That was due to the topology in Frankfurt, with three or four streets crossing and forklifts needing road licenses to transport valves. The question was how to cut this Gordian knot. By chance, two professors from the HfG in Offenbach told me about a former chemical park there, the Innovation Campus, with 250,000 square meters of greenfield. That was a 'wow' moment for me—we could reinvent ourselves completely, free from the grown structures. We could build a completely new factory optimized for three parameters: optimal value stream (a valve should travel 500 meters instead of 11 km), optimal meeting places for people (transparent, good working environment, new work), and CO2-neutral production (even before the Ukraine war, I wanted CO2-neutral within the plant boundaries). That topic has gained new dynamics due to gas. In Frankfurt, we need 32.5 gigawatt-hours of energy, split into thirds: electricity, heat, gas. We have a combined heat and power plant, so we did everything right as long as gas was available. In the new location, we want to use 30% less energy, build a larger factory, and cover most of it with solar energy. With these three themes—energy autonomy, CO2 optimization, optimal meeting places, and optimal value stream—we want to move. It took a while to convince the supervisory board, but everyone understood: if we want to stay in Germany, we have to do something. In Germany, only two things are growing: personnel costs and production costs due to energy. I cannot grow in the existing infrastructure. So there are two options: go abroad (Inflation Reduction Act, etc.) or reinvent myself. I could stay as is, but then I would have to continuously downsize over the next 10 years. Instead, we are investing 250 million euros from our own resources to build a completely new factory in Germany, probably the largest investment of a medium-sized company relative to sales. This is to be prepared for the next 30-40 years. It requires courage and humility. The shareholders understood; we are a traditional company in international competition. It's a huge burden for our employees, but we have reached over 50% of the workforce. The works council supported it at the last meeting, saying 'we want mind change' (mind for flow, change for transformation). People are already playing with the name. This is serious industrial policy to secure jobs. The business plan has also improved due to the energy topic because if we can cover with solar and perhaps store excess electricity or convert it to hydrogen via electrolysis, we can also demonstratively use our own products. It's a huge project, but the workforce increasingly feels it's their project, and there is enthusiasm to start anew. It's a great signal that it's worthwhile to make such an investment in Germany.

I was in China from 2005 to 2008? Actually, I was from 25 to 28? That was a different China than what we know today. I was Asia CEO of the Aicon Group and had a plant there with 4,900 employees in Asia. I learned a lot. When we talk about Asia, it's as disrespectful as talking about Europe because every country is different. Understanding China itself is incredibly complex, and you have to speak the language. I look back fondly, and even then I wondered when I returned to Europe that the reporting about China was always one-sided and mostly negative, even though it's an important sales market and many people consume more Chinese products than they know. China has changed a lot. I was there recently for the first time in three years. We have our plant in the BDA (Beijing Development Area). We expanded during COVID and are now doing a third expansion. Only three German manufacturing companies are left in the BDA: Mercedes, Bosch, and Samson. I arrived on Monday evening and on Tuesday morning I asked to meet the mayor of the BDA. On Thursday morning I met him with his entire leadership team, and the discussion was 'Mr. Widl, what can we do for you?' When I want to speak to a politician in Germany, it takes weeks to maybe get them on the phone. The Chinese implement their plans with such professionalism. They did not sleep through COVID; our Chinese plant is the most modern in the entire Samson group. They invested massively, and the air quality is better than before. It was an eye-opener that China used the COVID period well, despite all the news. I lived in Shanghai and have friends there, so I know how they handled it. The brother of the BASF CEO said the risk of not investing in China is greater than investing there. That's the 13 billion investment by BASF in Zhanjiang. It's not just BASF; Exxon and many others are investing there. For Samson, it would be a significant risk not to be there. However, we have a different strategy: we produce locally for local markets. Our plant in China serves the Chinese industry, and we expand there. Germany (soon Offenbach) produces for the world, but we localize more because it's necessary due to 'in-country value' requirements. We don't have a dependency on China, but our large customers' biggest investments are no longer in Europe; they are in America due to the Inflation Reduction Act, and in China and the Middle East. So for us, it's of significant strategic importance, knowing it's a cluster risk. We've played through scenarios like Taiwan, but I think that risk cannot be assessed by Samson alone because the whole world would be affected. I remain enthusiastic about the country and the people, but I like less that there is a camera every five meters—that's complete digitalization in a way I wouldn't want to live. When I return to Europe, I say: be glad you are in Europe, in Germany. We have a fantastic continent with so much. Please stop complaining about everything and enjoy the high quality of life and freedoms that are rare in other countries. I am a big Europe fan, but I have respect for all these other countries, especially China. For Samson, China is a significant contributor to sales and profits, and we will continue to invest there, but we will consciously limit our dependency.

I have a Defender and Land Rovers where I annoy my family and friends. I like old cars, and I think old cars are the greenest because they were already built and the energy has already been invested. I want to preserve them as best as possible. I found a 1963 Landy in Spain that has no roof, very spartan, basic. I would like to put a hydrogen engine in it and show that it can be done differently, without pollution. There are startups doing that. It's like an analogy to your 1932 regulator combined with a 1963 Landy with hydrogen—using new technologies to solve old problems. I think these boundary crossings are something one should dare to do. Otherwise, I really enjoy driving. I have a Land Rover that is equipped to drive around the world. I hope my time will allow me to not just talk about it but actually do it. Sports are fun, life is fun.