High Expectations

Economic slowdown? The company has never had so many opportunities for growth and we continue to have high expectations for the year, says Keith Nosbusch, Chairman and CEO, Rockwell Automation. He talks to Bob Gill.

BG: The world economy has taken a bit of a hit, especially in the US, this year. How is business for Rockwell Automation?

KN: We have not seen any significant decline in our business; customers are continuing to invest and the weak dollar has allowed exports to be strong. There has been a lot of gloom in the press over the economy, to the extent that we’re almost talking ourselves into a recession. But it doesn’t keep me awake at night – I prefer to focus on things that we as an organization can control and to make sure that perform at the highest level that we can.

One of the things that is different today about this company is that we much greater geographic – and industry – diversity, which means that it’s not just about what happens in the US. In Q1, we achieved our goal of generating 50 percent of sales outside of the US, and I am looking to increase this to 60 percent.

So it’s continued evolution of our strategy and continued high expectations for the year. In fact, Rockwell has never had so many opportunities for growth, and these are now truly worldwide. The challenge is picking the right ones and executing well.

BG: What’s your feeling when you come over to Asia?

KN: I see nothing but continued opportunities and continued strength, especially as the emerging economies build up businesses and infrastructure. Consumer oriented industries are picking up, as people here have more disposable income and are looking for choices and variety, which translates to a need for automation and information systems that can help companies become more flexible and meet the changing needs of their customer base.

BG: And Southeast Asia in particular?

KN: It may not get as much publicity as China or India, buy when you look at the GDP of the region, the size of the population, the amount of natural resources, it’s definitely a very important place for us. And of course, we chose to site our Asia Pacific Business Center here in the region – in Singapore.

BG: And how is the Asia Pacific Business Center coming along?

KN: This trip to Asia has allowed me to take my first visit to the facility and to see what we have accomplished in what is a huge investment in terms of how we’re globalizing our footprint. And I can say that Dave Johnson (General Manager) and his Singapore team have really done a great a job in building it up from scratch to what is now a 400 people plus organization and the global headquarters for key product lines like SLC and MicroLogix controllers, distributed input/output modules and PanelView operator terminals.

BG: You have made three key acquisitions in the process automation space in 2007. How is progress on the integration of those?

KN: It is going very well. Each one – ICS Triplex, Pavilion Technologies, ProsCon – is a little bit different but they all give the opportunity to go to customers and offer something better or different than our competitors. We have also been able to maintain the key people from those companies, which is always critical. We view process automation as our greatest growth opportunity and it’s the way we have expanded our served market most dramatically.

BG: Are you there yet in process automation?

KN: There’s always going to be more that you can do, but I believe we have a broad enough portfolio to be successful in the space. Especially as the technology evolves, we need to be on the look out for things that can help us do a better job for customers. We believe a lot in continuous improvement and constantly getting better at what we do, and process will be another example of that.

BG: You have also been paying a lot of attention to building up vertical industry expertise. Is this still a focus area?

KN: Absolutely. And it’s something that we’ve been doing by bringing people into the organization that have the requisite domain expertise, and through acquisitions that help to boost our capabilities in a certain vertical – such as ProsCon for life sciences.

In particular, in the last couple of years, we have expanded our activities in natural resource based verticals such as oil & gas, metals and mining, because we see prolonged growth in those sectors and so want to be able to participate.

BG: In the product arena, you will be releasing Ethernet switches for the first time.

KN: Yes, that’s correct, the release is set for the June time frame and is one fruitful result of our ongoing collaboration with Cisco. This is a very important relationship for us and is one that is going to continue, especially with Ethernet becoming the network standard for the plant floor. Our combined Reference Architecture guides customers on how to create the right network infrastructure for the future.

BG: Speaking to Kevin Roach (President, Rockwell Software) at November’s Automation Fair, he expressed some concerns about the relatively low profile of Rockwell’s manufacturing software business. Is this something that’s being addressed?

KN: The information space is one that is very important to us as far as future growth opportunities, and we’ll create a greater profile and exposure as we grow our capabilities in the space. We have made some changes in how we organize that business and how we sell the portfolio – we have to address the IT departments more than we would normally have to do – and you will see us running some different business models.

As for our FactoryTalk platform, we think it can do the same for the information layer that Logix did for the control layer i.e. enabling production disciplines much like Logix enables multiple control disciplines. Information will be the next base from which customers can generate productivity improvements, and so – through acquisitions or internal development – we will continue to build out our capabilities.

BG: Do you subscribe to any particular leadership philosophy?

KN: The best way to manage is to surround yourself with very talented people, who may be better than you, smarter than you and can do more than you. Set expectations high, hold people accountable, but let them figure out the best way to get you there. It’s also important to create enough diversity that brings in different experiences, in order that we can address more of the market needs.

The other aspect is that we are a technology company, which means that innovation is very important to us. Specifically, that implies creating an environment that allows innovation to occur. And its not just innovation around controllers or software, but around our business processes and our service portfolio.

BG: And are there certain people who have inspired you to do well in your career?

KN: At Rockwell Automation, I have been fortunate to work for a lot of good people and I have got to learn from all of them – from good operations people, from people who understand customers, from good strategists – and this collective exposure has given me lot of different experiences and helped me to get better.

But there’s also another dimension to this – my parents. I credit them for instilling in me the importance of education and for showing me that hard work and perseverance can pay off. To run a global business, with all the challenges that implies, it really helps to have a good set of values, and I got mine from my parents.

BG: How would you like Rockwell Automation to be perceived by the outside world?

KN: As a technology and market leader. That’s very important because I believe we are a leader and we want to be recognized as such. More specifically, for our customers, they should think of Rockwell as the company that has the right portfolio of products, solutions and services that allows them to achieve their business goals. Being the technology and market leader and being the preferred business partner– that is how we will be able to sustain who we are, what we are, and remain a very prosperous company.