| Kone: The Next Level |
| Manufacturing | |
| Thursday, 31 January 2008 | |
 This elevator and escalator manufacturer stays close to its customers while it works to take the company to new heights.  Vance Tang, President and CEO The Americas operations center for Kone (pronounced Ko_-na_) is situated in Moline, Ill., where Kone bought Montgomery Elevator in the 1980s to expand its presence in the US, taking over Montgomery’s former headquarters. Under Tang’s guidance, however, a leadership team of 60 or so is being established in the Chicago area in a new management structure to serve its widely dispersed customer base in the Americas more effectively. Several hundred people will remain in Moline, continuing to execute back office operations. In addition to serving on Kone Corp.’s executive board, Tang is executive vice president/Americas and has been charged with revamping the way Kone relates to its clients in an industry where service is the priority. In 2006, Kone Corp. had net sales of Eur 3.6 billion and about 29,000 employees, 5,200 in the Americas. Its class B shares are listed on the OMX Nordic Exchange in Helsinki. Capitalize on relationships Tang explained that two-thirds of Kone’s business comes from maintenance, refurbishment, and replacement of existing elevators and escalators, so to capitalize on these existing relationships, sales and customer service people must be close to Kone’s customers. Earlier this decade, Kone split new equipment sales and service into separate divisions, which Tang believes is not the best model for growing the business. In the construction industry, a building materials supplier who sells a developer windows or wallboard will move to the next project once that sale is complete. But with escalators and elevators, the installation of new equipment is merely the first step in what should be an ongoing relationship during the lifecycle of the vertical transportation equipment. Owners of commercial buildings employ maintenance staffs, but elevators and escalators require a special touch, so much of that work is contracted—usually to the manufacturer. Since Tang joined the company in early 2007, he’s been working to organize the Americas into six regions: four in the US and one each in Canada and Mexico. Each region will have a leader, along with an overall Americas leader for business development and one for operations. Each region will be further subdivided into districts and branches to ensure Kone operations provide local support for customers. “We work with customers from the very beginning to the very end,” Tang said of the lifecycle of Kone’s equipment. “We want our customers to have one person, one number to call when there is a problem or an opportunity. Every market will have a leader with the authority, responsibility, and resources to serve his/her local customers.” The move of leadership to Chicago will facilitate the extensive travel executives are expected to make. Tang is on the road one-third of the year meeting with customers, and he expects his team to do likewise. “When you’re with customers, you don’t have to wonder how to grow the business. You listen and get their feedback,” Tang said. “And you can’t get that sitting in your office answering e-mails and making PowerPoint presentations.” Changing a company’s organizational structure and relocating employees can wreak havoc if it’s not handled with care. Tang came to the job with an open mind, but meetings with employees and customers convinced him that change was needed to bring Kone employees into closer contact with customers. The long-time building industry executive relishes the time he gets to spend with customers. In his previous job as vice president and general manager at Honeywell Building Control Systems, products were typically sold to distributors, who, in turn, sold them to developers and contractors. Getting the go ahead Kone often sells directly to building owners, so developing relationships is vital to the continued success of the company, which is known for its innovative products. Kone sells and services automatic doors in addition to its core elevator and escalator products. Challenges for the company include getting the go ahead from code authorities for innovative designs and convincing developers that operating costs are just as important as construction costs. Kone is a member of the National Elevator Industry, a group that works on safety and code-related issues. “Code bodies have an obligation to ensure that new technologies are safe, but sometimes innovation can outpace their ability to react,” Tang said. To drive price competition, engineers are often directed to specify systems that multiple suppliers can meet. When Kone developed elevator technology that didn’t require a machine room, for example, it was difficult to have the technology specified for buildings. “From a market standpoint, we want to help building owners get the best lifecycle value out of its lift systems,” Tang explained. “But many owners are focused on first costs, those required to get a building up and running.” In addition to efficiencies and cost savings, Tang reminds building owners that the top tenant complaint is about the elevators, followed by the heating and air conditioning systems. Getting tenants and clients to the floor they need to be on is of primary importance, and it’s not the place to make short-term cost decisions. The increased focus on environmentally friendly construction and operation practices has benefited Kone, the first elevator and escalator manufacturer to join the US Green Building Council and the first one to stop making hydraulic elevators for the North American market. The Kone EcoSpace solution doesn’t use hydraulic oil, which can leak into the soil as the unit ages, and the systems are up to 60% more energy efficient than traditional hydraulic elevators. “Good environmental sensitivity makes good business sense,” Tang said. “A building owner may spend a bit more money on the initial elevator system but gain savings for the life of the building in total construction and operating costs, while increasing the value of the building. We measure success by how well the equipment serves the building and the strength of our relationships.” Grayson Walker, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it , is a freelance writer based in Atlanta. |
|
| < Previous Story | Next Story > |
|---|
© 2008 American Executive - RedCoat Publishing. All rights reserved.
American Executive is a RedCoat Publishing publication.
American Executive is a RedCoat Publishing publication.
