Investing in innovation

September 10, 2015

Atlas Copco’s President and CEO Ronnie Leten explains how the continued importance of innovation touches every aspect of the company.

What does innovation mean to you?

When it comes to innovation, we immediately tend to think of new products. But when you look at our company, every employee can contribute to innovation. It can be in the way we interact with customers, the way we provide service, do accounting, follow up on our business. But of course the core of innovation is to develop new products, creating better productivity for our customers. It’s ultimately about making life easier for the customer by providing a better product or service.

What are some historic examples of innovative products?

Atlas Copco has done so many great innovations over the years. For example, how we moved our power tools business from air-powered to electrical tools. Or take drilling: how we went from the so-called ‘Swedish method’ of one man, one machine – which was a great leap forward in the 1950s – to today’s Boomers that allow for safe and effective remote drilling. Another big development was going from a fixed-speed compressor to a variable-speed compressor with an integrated dryer. In hindsight it always looks easy and simple, but at the time these developments were real breakthroughs.

Is there an innovation that doesn’t exist yet that you would like to see?

There are many opportunities. We can, for example, still improve service to construction companies. There are many opportunities there to increase customer productivity. For the time being we are still not servicing all the equipment we have sold to customers. We need to be innovative when it comes to convincing the equipment owner to let us do the service, because we can do it much better than anyone else. No one knows our products better than we do. Servicing more equipment means taking more responsibility. We are getting equipped and better organized so that we can execute service in an efficient way for our customers.

How else does innovation play a role in service?

Innovation in service is really about integrating a lot of processes so that we can follow the whole operation closely and ensure that service is being provided quickly and accurately. An innovative, cutting-edge service organization depends on having competent and trained service engineers who have the tools they need to accomplish their mission. It’s crucial that our service engineers get the resources they need. The other side of the coin is that service helps us be more innovative in the development of new products. Our service men and women see firsthand how the machines perform out in the field and get to know our customers’ needs. Capturing and leveraging that knowledge helps us develop more equipment that increases customers’ productivity.

How do you see the future for Atlas Copco’s development and design centers?

It’s best when these centers are close to customers in our largest markets. Over the past three years we have strengthened our research in Asia, specifically in India and China. They are still in the start-up phase in R&D, so for the time being Asia will be the priority when it comes to new innovation centers. But we will invest where needed in our centers; we are not holding back. If you ask how it will be in 10 years, Atlas Copco will definitely have design and development clusters in Europe and Asia, but also in North and South America. There’s a battle in our industry to be first with innovation. A global company like us will have an advantage through this closeness to customers.

How do you foster a culture of innovation?

It’s key that employees trust their environment, trust the future. They should feel that together we can win, we can grow. We can only truly have a culture of innovation if we believe in the future together. People want to join a winning team, and Atlas Copco is a growth project. We must have a constant drive to improve competence – to always get more knowledge, never be pleased with what we have.

We are always hungry to improve. Be happy, but not satisfied.

Ronnie Leten, President and CEO of Atlas Copco

Written by Atlas Copco

Global Investing in innovation Value creation Ronnie Leten Service