this has been into social media, animation or collaborations with Hollywood.”
Christian Stadil, co-owner of Hummel and Thornico
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The
Chameleons
These are among the most innovative and adven-turous companies in Denmark. They have taken strategic U-turns which mark a radical departure from their previous business models or have develo-ped completely new products or service concepts to gain success in the export market. Denmark has quite a number of chameleon companies and FLSmidth and Fertin Pharma are two excellent examples. They have understood that global compe-tition, characterised as it is by turbulence and great inconstistancy, constantly making new demands and that only the most active and agile companies can survive. At times, this may even require the ma-nagement to redefine the company's raison d'être.
Fertin Pharma - The transformation from a sweet manufacturer to a pharmaceutical company has provided the foundation for a new growth adventure. Page 78.
FLSmidth - Globalisation and hard price competition persuaded the old cement company to develop a completely new business supplying cement plants, equipment for mineral plants and sale of service concepts. Page 80.
Chameleon companies are very different from each other and yet they also have many similarities: in the driving seat you will usually fi nd a board of directors and managers who are able to make controversial, tough and often unpopular decisions, outsourcing jobs from Denmark for example, and who in spite of the organisational problems still manage to survive the change. Many Danish exporters have completely changed their business structure due to almost seismic shifts in the marketing landscape.
Two examples of this type of company are cement group FLSmidth and chewing gum producers Fertin Pharma, previously known as Dandy.
In 2004, FLSmidth had to seriously rethink its business when a Chinese company sprang up like a jack-in-the-box and entered the cement factory market, offering solutions that were 30-40 per cent cheaper than those offered by FLSmidth. The Danish company's resolute response was to break completely with traditional thinking and create a new and more cost-effective global supply chain, as well as offering extra insurance and development services, allowing FLSmidth to retain its techno-logical leading position.
Fertin Pharma – a name few today will recognise but most Danes will almost be able to recall the taste when you mention the name Dandy, is another example of a chameleon company.
After 1989, when globalization fi rst began to take hold, Dandy realised that marketing brands such as V6 and Stimorol from a Danish base was no longer viable.
On the other hand, Dandy possessed some highly specialised skills in the manufacture of nicotine chewing gum, which
re-sulted in the company Fertin Pharma, manufacturing medicinal chewing gum from its Vejle plant.
Breaks with the organisational past
The most daring aspect in this type of transformation is the fact that from the outside, the company looks nothing like what it used to, which can be a potential risk. The transformation itself requires taking some tough and often organizationally unpopular decisions. FLSmidth’s decision to create a global value chain with, at present, 4,000 engineers in India spelled the end of certain types of job in Denmark. And Fertin Pharma's departure from the production of traditional chewing gum also meant waving goodbye to a potentially huge market. There are many international exam-ples of transformation being undertaken because it is the only viable way forward. In 2002, 3M, the company primarily known for its Post-It notes, began to manufacture sandpaper. The American company DuPont, who purchased Danisco, began as an explo-sives manufacturer but today they sell glue, fi re extinguishers and enzymes. And IT giant IBM has gone from producing punch-card machines to massive main-frame computers and calculators and today they focus on software development and consultancy services. We tend to forget that all businesses change over time.
Who today would associate Vestas Wind Systems with a small blacksmiths shop in the town of Lem in West Jutland, which was where the company was started in 1898.
Companies have shorter lives
The pressure on businesses' ability to change and adapt is be-coming greater. In the export market, many Danish companies
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will be faced with the same challenges that faced FLSmidth and Fertin Pharma.
Technological development is so rapid that it will constantly change market conditions, customer relations and business models.
Changes such as these are due to what Professor Clayton M.
Christensen has called 'disruptive technologies'. This illustrates the increasing tendency of new technologies to completely change the game and we must either react to this immediately, or allow other companies to pass us by. It is not an easy thing to do, and many businesses cannot make the change.
Analyses of the life-cycles of businesses show that the need to think radically is greater now than ever before. One study undertaken by Innosight, based on information in the American S&P share index, showed that while a company might have had an average “shelf-life” of 68 years in 1958, this was down to 25 in 1980 and it is only 18 today. Within innovation circles many people seriously contemplate the reasons for the apparent life crisis that many companies will face. There is some agreement that one solution could be paying greater attention to customers' needs and the changes this may require. This may sound elemen-tary, but is often quite diffi cult to carry out in practice.
The focus on profit can affect business
Steve Jobs, the deceased founder of Apple, had a theory that at some point all companies forget their customers in the hunt for profi t. In Walter Isaacson's 2011 biography, Jobs states that when a company does something well, like inventing new products and thereby almost creating a monopoly in certain
areas, the quality of the product becomes less important. The company then begins to reward its sales people because they are the ones directly generating profi t. They get promoted, while the product developers get demoted and become demotivated.
The former Apple founder is not alone in this analysis. According to Steve Denning, management theorist and blogger for Forbes Magazine, all management functions in a company that do not focus on customer needs can become a problem. He talks about accountants and fi nance people who are only concerned with cost-cutting. These people will never become customer-focused but highly regarded despite systematically contributing to the future demise of the company, he explains.
Only the paranoid survive
In Danish management circles, we notice a tendency to almost want babysit the customers to keep them happy. LEGO's CEO Jørgen Vig Knudstorp has also describe his almost paranoid ten-dency to keep an eye on how the organisation retains its customer focus. If attention is increasingly turned to internal issues, he will intervene, otherwise focus may be distracted from the company’s raison d’être, which is fulfi lling the needs of the customer. Perhaps there really is something in former CEO of Intel, Andy Groves’
famous comment that “Only the paranoid survive.”