ALTIX INDUSTRY CHAMPIONS INTERVIEW
One on One: Discussion with a Global Industry Champion: Phoenix Contact Canada
Each quarter we sit down with Industry Executives and Thought Leaders to discuss the trends, challenges, and best practices that are transforming their businesses. Thank you for participating in the Altix Industry Champions interview.
Today, we are with Roger Hallett, President of Phoenix Contact Canada.
Roger, can you please introduce yourself and your company Phoenix Contact?
I’m the President of Phoenix Contact in Canada. I am an electrical engineer by trade and started my career in electrical engineering in the early years of automation back in the 1980s. Since then, the thread of my career has been in business development, sales management, and general management; starting businesses, growing, and optimizing businesses, and driving new sales in new areas. Throughout my career I worked in three key areas: electrification (electrical equipment), automation and more recently digitalization which is one of the big trends now.
Phoenix Contact is a globally active manufacturer and developer of electrical automation and networking products headquartered in Blomberg in North Rhein Westphalia, Germany. The company turns 100 years old this year and is one of the global market leaders with nearly 20,000 employees worldwide.
Roger, you have spent much of your career working for German and international automation technology companies. The technology Phoenix Contact provides helps drive Industry 4.0 or IIoT/Digitalization. What problems does Phoenix Contact solve for society and for your customers?
Well, the answer to that question has changed a lot over those 100 years. Initially in 1923 the company developed connection technology for street cars. Recently, for the last 10 years, our focus has shifted to supporting energy transition; in other words, the transition from fossil fuels to renewables and all the challenges that come with that, including energy storage, smart grid technology, power distribution etc. These are some of the new challenges for society. A lot of our customers are now looking for solutions in that area.
Automation has changed drastically as well. These days, automation is everywhere. We now have automation in our homes, vehicles, buildings, and cities. So, providing innovative products that enable solutions to those challenges is at the core of what Phoenix Contact does. The driver for all those solutions in Industry is the constant demand for productivity improvements. While that’s not new in the manufacturing world, it is getting more and more challenging, needs to be more flexible, and requires different kinds of innovative solutions. Essentially, demand for productivity, greater demand for goods, new onshoring trends, labor shortages and labor restrictions are all driving that push for automation, and we try to be one of the companies that offer good solutions for it.
Digitalization is the third area; The networking and massive acquisition and processing of data across all industries from transportation to buildings and manufacturing – this is an important area for us, along with the accompanying solutions for cyber security. You may have heard that we recently acquired a company called iS5 Communications which specializes in high security networking solutions. So, energy transition, automation and networking are the main drivers for our company.
Phoenix Contact is a private, family-owned company. How does that impact how the company stays at the forefront of emerging trends in terms of R&D and product development?
Yes, we are privately held, family owned, which is very important to us because it means that we can manage and control our own destiny. This helps ensure that our focus of development remains in the core area of the company’s competence or in areas where we know we can add value. We are not always driven by short-term shareholder value. We can be more creative. Being privately funded also enables us to work on longer term solutions to longer term problems. In my opinion that’s a real differentiator for Phoenix Contact. I’ve always worked with German and Swiss companies, and I think that is a trend in many ”Mittelstand” European companies.
Of course, keeping our products relevant is one of Phoenix Contact’s main focuses. And there are no shortcuts; you need to listen to what your customers want, not just now but in the next 5-10 years. We have a global product management organization that focuses on current new products and future demand, and we also make sure we are directly involved in the industry, so we get direct feedback about trends in applications around the world. Our vertical market management (VMM) team focuses on specific sectors like energy or process industry to identify future trends. That constant and relevant feedback, coupled with being self-funded, enables us to invest in future trends even when we don’t expect to see an immediate return of investment. Essentially, it’s a combination of good quality data and being able to look 5-10 years ahead and understand that the new idea you have may not catch on immediately, but it is where the future is going.
Energy transition is a big dimension with big impact on your customers and society for that matter. Sustainability and ESG are major topics around that. How seriously does Phoenix Contact take the topic?
Very interesting question. We periodically update our global strategy at a very high level and did so recently. Sustainability is a big objective for us. Our Purpose and Mission statements are aligned to the aim to develop sustainability. We are working on delivering solutions that help our customers achieve sustainability while doing the same ourselves in our own business and in our supply chains. And I can tell you that it’s not about being opportunistic because we perceive it’s what our customers want to hear – it’s a key part of our culture and values, and that key belief weaves throughout management also.
In Canada we also have our own targets to improve the sustainability of our operations. We have carbon reduction targets for our own buildings and several projects in our building improvement program to address this.
Does your R&D only focus on new product development, or does it also support factory on product optimization, sustainability, and automation/digitalization? In other words, do you also offer customized innovation solving real client projects that are unique to one customer?
YES, in Canada we absolutely get involved in trying to solve our customers’ problems by offering ideas and solutions based on our experiences and deeper understanding of the technology we provide. That consulting work will result in proposals to help them solve their issues. But we do not always implement those solutions ourselves as in many cases there are other companies who are better positioned to do that. We partner with system integrators and solution providers in different sectors who can bring specific industry and application knowledge to the solution. Examples of that are in the Energy sector, Infrastructure, and Automotive.
With electrification, miniaturization, automation, and digitalization there is also a need for hardware companies to shift toward understanding the software and data world; Do you see that need in your organization as well, where you find a need for more software competence where you become better at digital yourself?
YES absolutely. While Phoenix Contact’s background is electrical connection technology, our automation and networking portfolios have grown dramatically over the last 10 years. Earlier I mentioned networking and cyber security evolving rapidly – that alone has challenged us to make sure we have the right people on board. These days in Canada, our application engineers are all software experienced engineers with systems wide knowledge so they can program as well as provide hardware solutions. Both skills are now required for our application engineers due to the breadth of our portfolio.
With all these rapid changes, how do you keep your team aware of change and how do you train them to become effective technical consultants with direct interaction with the customer?
Well, that’s a question I may not be able to answer in 10 minutes. In Canada it starts with hiring and recruiting people that have those skills or who we can train to develop those skills. To help when recruiting straight out of college, we have designed a graduate program for new hires to ensure they understand our company, our products, and solutions. Once they understand the basics, we start deploying them in the field to gain experience. We integrate them into specific teams, like product management teams or applications engineering teams. They might start in tech support roles, then transition into an applications role for example. We continue to train and develop them for 5-6 years.
To keep people in the company for 5 or 6 years and beyond, we try to create a good place for them to work. We try to keep people moving to gain experience in different areas and to keep that open-minded process going. And that’s one of the biggest challenges for me. I’m an engineer – when you’re coaching and managing people, not all the logic-based principles of engineering apply! That’s always something I try to remain aware of.
We try to maintain a fluid and agile management team. One of my main focuses is to coach and motivate the management team to motivate and support others. We try to team younger people with more experienced people so that the junior associates can see how senior, more experienced people are doing things and to learn from that. As we move people around, we also try to minimize the barriers of a superiority mindset – we try to create a culture where it’s OK to try something else after doing the same job for many years. There’s value in developing cross-discipline experience so creating interest and excitement for moving across the organization to gain different skills– is very powerful. It requires a lot of conversations, leadership, and coaching to realize this. In the end I think a fluid, open-minded organization builds collaboration and leads to a situation where we have well-rounded and qualified staff able to sit with our customers and hold fruitful conversations. That’s what we strive for.
While the current trend of digitalization and Industry 4.0 continues to drive demand for your product offerings, that increased demand required considerable transformation and optimization within your organization to ensure scalability. What were your challenges or opportunities for transformation and optimization to keep up with demand?
We have had to quickly increase our manufacturing capacity globally in recent years. Doing so efficiently is the key. We’re looking at global challenges and rethinking our supply chain structure to create more resilience. Our world is globalized and it’s increasingly important that we understand what is happening in other parts of the global market because our customers are working globally too. We are in the process of aligning our IT systems on a global level, which means aligning our CRM tools, looking at our ERP systems and making sure that they’re fit for purpose. Being able to adapt to changes quickly are also things we are working on to make sure that we can keep up and stay relevant for our customers globally.
It always comes back to leadership and culture… people want to fight for the mission of your company.
Yes! As I mentioned before, a privately owned family culture and shared history is very powerful for forming the culture and purpose of the company. After 100 years, that culture has developed and matured organically. I should also add that, while we are a privately owned company, we are a professionally managed organization. Our leadership works to apply those values and having that at the core is very grounding for our entire team. In Canada we try to focus on collaboration and communication rather than status, ranking and rigid structures. That’s an environment and a culture that our current generation of junior employees appreciates as it allows them to voice their views and ideas, which is quite empowering to them. Our people are also passionate about sustainability, especially that younger generation.
I like to say “the future is now” as our world turns faster and faster. Tell us a little bit about the next big-ticket items on Phoenix Contact Canada’s agenda.
Well, as I mentioned earlier, we are experiencing an ever-growing demand. So, for us, it’s building a more resilient supply chain. A diversifying and globalizing supply chain is necessary and one of the biggest ticket items for us. We are very good at communicating across the globe and translating that into scalable, global IT systems is also an important topic for us as we scale up even more for the challenges of the future.
I would also highlight our own contribution to a future sustainable world. Here in Canada, we are working on bringing new technology to our own infrastructure. That includes building our own EV charging infrastructure, converting our buildings to new fuel types, and looking at the introduction of renewable energy production on our site.
As a leader, you are challenged in many ways; how do you personally find your balance and keep your energy level high with a positive / forward-thinking mindset, even during the most stressful and difficult times?
First of all, I think I’m a natural optimist. I may have a bad day here and there, but I seem to always wake up with a positive mindset the next morning. I guess that’s just my natural state. I also love a challenge! I look back at my career sometimes and realize that I often changed roles within the same companies because I truly enjoyed the new challenges. When things run smoothly and there’s nothing left to innovate, I often find myself thinking about what I can do next. I guess that mindset keeps me going and fired up.
I also make sure that I spend a good amount of time away from work. I spend a lot of my free time with my family – something as simple as going to the movies each Tuesday night. I enjoy spending time on our sailboat, and we love city vacations! So, I have plenty of periods where I switch off.
You know, very early on in my career I went through some stressful challenges. I got help with that and found methods to manage that stress that worked for me. I still use those methods to this day. I have learned not to underestimate the challenges of stress.
Looking back at your long and successful career, is there something that seemed to rob you of your valuable time – what is one thing that took way too much time out of your week?
I think your question boils down to time management and prioritizing effectively. For me, managing my emails was a big challenge throughout much of my career. It would not only suck up a lot of my day, but I found myself constantly connected to it which meant I was not able to concentrate on my work as I was disrupted by email. So, for me, it was all about managing the inputs and the interrupts, and the messages. I now look at my phone messages, calls, and emails first thing in the morning, then I don’t look at them again until lunchtime.
Thank you again Roger for being with us today and allowing for this Champions Interview! We are excited and honored to feature you and Phoenix Contact Canada in the Altix Access Newsletter and Industry Champion Interview!
ABOUT PHOENIX CONTACT CANADA: Phoenix Contact is an independent, global market leader with headquarters in Blomberg, Germany. More than 20,000 enthusiastic people around the world develop, produce, and sell our creative solutions in connection technology, electronics, and automation. The “Phoenix terminals” and “Phoenix connectors” are known worldwide. We see our work as a contribution to designing a smart world. A global network in more than 100 countries guarantees the important proximity to our customers. Our innovative products and solutions are characterized by high quality. Users in many industrial fields – electric-mobility, mechanical engineering, wind energy, solar energy, building automation, cyber security, automotive – trust Phoenix Contact products. https://www.phoenixcontact.com/en-us/
ABOUT ALTIX: Altix is the middle-market international industrial champions’ management consulting partner, providing business strategy, technology and innovation, and operational excellence support, in the world of advanced manufacturing and international supply chain. www.altixconsulting.com