pv magazine: At what stage is the bringing together of the two companies?
Paolo Casini: The integration is going very well and faster than expected in terms of execution. We have approached the different aspects of the integration in an orderly fashion focused on the what, the how and the who.
One year ago we started looking at the front end of the business when starting the integration of the existing solar group of ABB with Power-One. The first task was to focus on the products and the product roadmaps. We proceeded in a very rational way, looking at what the two businesses meant to the company in terms of the market segments served, the installed base, market expectations and finally implementation meaning, looking at where resources are located and the product pipelines in progress. The rational approach we followed made this first step relatively easy.
The second step was how to accomplish what we needed to do, in other words the processes and procedures we would follow. This phase has proven to be more complicated and time consuming because were dealing with the engine of the company. There were differences in the way of looking at priorities, analyzing opportunities, coupled with the complexity of the two organizations and KPIs that required additional alignment. But certainly nothing that was impossible.
We then focused on the people aspect of the integration with clear definitions of responsibility as the two businesses merged into one organization. We started this looking at our global sales and marketing organizations and then on to the business back end functions. This last stage is still a work in progress with the integration of the legal entities and functions including human resources, operations, information systems and more. Once these functions are fully integrated this will make us truly one company. This is the longer stage of the process but once completed it will have a tremendously positive effect on the way we conduct business both effectively and efficiently.
Overall it has been a little over a year, but the progress we have made in that amount of time has been very good. The one rule we have strictly followed has been to not do anything that would affect the continuity of the business moving forward while making the integration seamless for our customers.
What about branding, as Power-One had such a strong brand especially here in the U.S.?
One of the first challenging issues we faced was whether to keep the Power-One brand or merge it into ABB. Obviously there were pros and cons with both options. Although there are several successful examples within ABB of acquired companies which have kept their brands, we were convinced that in the long run the coexistence of the two brands would be confusing to the marketplace. One undisputed value of ABB is its global brand recognition that extends to many emerging markets that represent the future of the solar business. It would have been an uphill battle going into these markets with a different brand and particularly a brand that the customers were not very familiar with.
On the other side of the issue were concerns, primarily internally, regarding the possible negative impact of the brand change in territories where awareness of the Power-One brand was strong, such as in Europe and the U.S. Although in hindsight this has actually proven to be quite manageable.
The decision to transition from the Power-One brand to ABB was actually made in October of 2013 with a targeted completion date of May 1st, 2014. So we had a reasonable amount of time to communicate with customers and prepare the market for the change. We can say confidently today that the change in brand has been widely accepted without any real negative impact.
Bringing the culture of two companies together is an important part of any M&A activity. How would you say the Power-One and ABB cultures are coming together?
There were clearly some cultural differences between the two companies. Power-One was a relatively simple organization, organized to react quickly to the highly dynamic and fluid solar market while ABB is a highly structured, multinational conglomerate with 150,000 employees and $40+ billion in revenues. The value that Power-One brought to ABB was the vision needed to be responsive and successful in the early stage of the solar market. ABB brings more structure to Power-One with a strong focus on processes and procedures to help the business remain successful in a consolidating market.
In the end, it is not a matter of which culture wins, but rather how to take the best of both worlds. For example, maintaining the speed of execution that has always been a hallmark of Power-One with the structure and controls in place around the decision-making process that ABB brings to the table along with a results driven organization. The sharing of strengths and best practices by the two entities has resulted in a more graceful blending of the cultures as opposed to any culture clash. Overall it has been very positive.