Alberto digs down into what the company has taken away from the pandemic and how to lead a “more efficient” organisation towards an expanding future.
Alberto Lorenzo Mitxelena joined EUN over three years ago. As Chief Executive Officer, he is ringing the changes in an organisation committed to sustainability across all business areas. His managerial experience in internationalised and innovative organisations and philosophy of ongoing improvement have made the company more effective and efficient at a time when the priority has been EUNdarrak (Team EUN), customers and the environment itself.
How did 2020 end up for EUN?
Although the two waves of the pandemic reduced sales by around 22% compared to 2019, we still had some very positive takeaways. Holding onto the idea of a liability would be just a superficial analysis.
What were the positives then?
The investment we made during the darkest part of the pandemic when we didn't have anything to bid on, install or transport. The market was flatlining for weeks, even months, but we wanted to provide support, convey confidence and invest in the well-being of EUNdarrak, our customers and society. That was the priority we set following the decree of the state of alarm and full lockdown. 14 March was a Saturday, but on Monday 16 we had to start taking decisions without knowing what we were getting into. As time went on, and seeing how impactful it was, we prioritised EUNdarrak, our customers and the environment around us above all our stakeholders.
What form did that priority take?
What we did during that time when we sadly had no bids to work on or turn into orders, no orders to manufacture and nothing to install was spend it on improving across three areas. First, distributing talent among all the EUNdarrak, particularly in everything regarding customer requirements and expectations around products and solutions. Secondly, supporting customers in all the projects that were likely to come in when there was a lull in the pandemic.
And thirdly, making everything we did more economically, environmentally and socially sustainable.
We wanted to improve from the inside out, investing in our teams to achieve a multiplier effect. Or to use a virus analogy, to spread everything we were doing to our closest partners and from them, in turn, to the external environment.
So the fixed costs were maintained even when we weren’t pulling in any revenue. That can’t have been easy.
The income statement weighed heavily on my mind but at the same time we knew the value of every moment invested in lowering our environmental footprint, increasing our contribution to societal well-being and providing our customers with more and more support. All this would make it possible to harness any opportunities that arose and make them work in our favour. And that is exactly how it panned out when there was a lull after the first wave: the September-December results were four times stronger in terms of efficiency than they have been in recent years. So the investment meant we could leverage the opportunity when it arose to save the year and post excellent results despite the two waves reducing sales by around 22%.
Other things were also needed in addition to investment...
That’s true. We were also able to do it because we stayed lean right across the cycle. Lean in terms of detecting customer opportunities, working with customer specifications, turning opportunities into bids, leaning into customer requirements and providing value (and I will go back to that later) and lean around everything regarding manufacturing. In fact, production ratios in October and November were three times higher and even the quality ratios improved. Across the entire cycle, both within EUN and with our stakeholders, we were able to cut through the waste that had negatively impacted returns in the past. And this change, which we were able to implement in a sustainable fashion, is here to stay.
So that explains the positive outcomes...
That’s right. The EUN that emerged from 2020 is much more efficient.
It is an EUN which at a time of sector hiatus continued investing, generating trust and making progress around certifications. We released new products on the market, changed our value proposition and redefined ourselves in terms of marketing...
You will be able to see the work better when the market goes back to something resembling its pre-pandemic status, which will happen at some point. But we are already seeing it at the start of 2021, bidding 10% more than we did in 2020 and winning 24% more orders than the same time last year, when things were still Covid-free in the regions where we operate today (Iberian Peninsula, North Africa, Middle East, Mexico, Central America, Caribbean and South America). And that’s also considering that the first quarter of 2020, before the impact of Covid really took hold, was the best quarter in EUN’s 47-year history. So we closed 2020 with good returns despite the 22% fall in sales and have kicked off 2021 by improving on what had already been the company’s best-ever quarter in terms of bids and order acquisitions. And this was all made possible by the work we put in place last year.