Ensto’s “Two businesses, two focuses” strategy positions the company for the new normal.
In 2013, Hannu Keinänen left Ensto for the electronics manufacturing business. In February 2019, after six years away, he returned home to Ensto as its CEO. A short time later, the company was greeted by a global pandemic.
But Covid-19 did not hit Ensto as hard as other companies. Before the pandemic, Ensto had already consolidated factories, outsourced some production, reduced its product offerings, and reduced fix costs. “Thanks to steps we’d already taken, Ensto is very healthy today,” says Keinänen. “Our top-line revenue is down thanks to the pandemic, but our profitability is up.”
It’s not only financial health that Ensto enjoys. The company has had zero Corona infections in its facilities and offices worldwide. “We’ve altered shifts, secured safety distances at workstations, done whatever takes,” says Keinänen. “Ensto is a place that stops the virus, not spreads it. We even have lower absenteeism than normal. What the pandemic did for us is force us to ask ourselves the question: ‘How we will be a winner in the new normal?’”
To exploit the new normal, by December 31, 2020, Ensto will have completed its restructuring into two separate businesses along a strategy termed “Two businesses, two focuses.” The strategy allows employees in both businesses to focus and specialize, to be more customer- and business centric.
The first, our electricity distribution business, Ensto DSO, has the ambition to become the global leading expert for distribution system operators in select market segments. It seeks technology leadership in full covered conductor solution technology, underground networks business for cold shrink medium voltage, as well as the cyber-secured network automation business. Its growth will be primarily organic, through product development and market expansion.
The second, our building electrification business, Ensto Building Systems, will seek dominance in the Nordics and selected market niches. Ensto Building Systems will also compete in product-specific niches — like marine in Italy — where it has the potential to dominate. “The building segment is tough when it comes to profitability,” says Keinänen, “so the unit will have the ability to be selective where they put their costs and resources.”
While Ensto DSO and Ensto Building Systems are separate businesses, Keinänen says there will be instances when they’ll work together. "There is room for cooperation between them, but we’ll do it when it’s beneficial to both."
Keinänen is one who carefully monitors electricity and public opinion. He’s noticed dramatic changes over the past decade. "A decade ago, electricity still conjured a lot of negative associations, like burning coal. Nuclear power was seen negatively. But now, thanks to the penetration of renewables, it's clear that electricity has new role to play." Today, he says, electricity is almost like a basic human right, an enabler of modern society and a builder of equality. “Electricity gave time to mother and children, allowed education, and this should happen globally.”
It’s not hard to get Keinänen to evangelize. “Electricity is the most efficient way to move energy from point A to point B. A power line for electricity is triple as efficient as any mechanical or hydraulic means of power transmission. Electric vehicles are four times more efficient than internal combustion cars. An LED is ten times more efficient than an incandescent bulb. Wind power is on par with any fossil fuels burning plant in cost per kilowatt hour.”
But since the wind doesn’t always blow, and the sun doesn’t always shine, smart solutions like those Ensto makes are essential to efficiency. “Ensto is all about a better life with electricity,” says Keinänen. “Ensio Miettinen started this company 62 years ago, and now everything is getting smarter. If we make the right choices now to stay healthy in every respect, then in 38 years’ time we will celebrate our 100th anniversary.”