Otis rejoins the Fortune 500 after 45-year absence
CEO Judy Marks says the elevator business is going up despite remote work during the pandemic.
Judy is so good to see you again and to talk about the booming business at Otis, you know, it's hard to believe that your company's elevators orders are way up your earnings are up, your stock is surging and you have increased the dividend by 20%. Where is all this growth coming from? And especially during the pandemic uh susie, it's great to see again, I think what this does is it proves the resiliency of our business model, It proves the resiliency of our incredible colleagues and the resiliency and the impact of executing our strategy. You know, we did have a tremendous first year and even the first quarter of this year we've seen the demand signal pick up people want to be back at work. We're seeing people investing in construction which didn't stop in the majority of the world, throughout the pandemic. But we're also uh we also service a residential business. And what we found during the pandemic with over 50% of our service portfolio of 2.1 million units being residential is we kept people moving, whether it was to their home in hospitals or on transit still, who's really making all of these orders given that so many businesses are downsizing their allowing their employees to work from home and they just don't need those tall office towers like they did before the pandemic who ordered. It doesn't have to be a high rise. There is a need for vertical lift and elevators and escalators in schools and hospitals, even in distribution centers that many people think are relatively low level. So we're seeing demand pick up in china in Asia. And in the US in the first quarter, we had a tremendous orders performance where we're seeing people really wanting to invest in the future. Well, as I mentioned a moment ago, many businesses are allowing their employees to continue working from home. What about Otis? What are your plans back to the office or staying remote? We've been an essential service provider since the day that started really in China in late January of 2020, we have provided essential services throughout the globe. So two thirds of our 69,000 colleagues always went to work every day. We have been sure they were safe. We ensure they had the PPE, they needed, the rest were able to work from home for a good amount of the time are 1400 branch offices are all open at some level. Our headquarters are open and being in the life safety business. We're being very careful about first encouraging vaccinations and also making sure that when people return they feel comfortable. We believe the office has a place in the future. The office will be back. It may look different, but we want to make sure that everyone feels comfortable so that we have that place to share culture, to collaborate and to innovate as you know judy. One of the things that makes people anxious about going back into the office is riding on the elevator to tiny face. It's very hard to social distance, but I understand that uh oh did you come up with some tech solutions? Can you tell us about them? We came up with a lot of touch with solutions from voice controls to gesture controls to an app that allows you to use your mobile phone and not have to touch buttons. But at the end of the day it's all about air and and really air moving around in an elevator. And we actually commissioned a study by air experts at Purdue University and they independently came out with information that an elevator ride is just as safe as going to the grocery store or dining outdoors. You're not in an elevator law and the ventilation is required by code. Most people don't see it when they enter an elevator. But susie, you can imagine if you were ever entrapped by code, there needs to be ventilation, elevators are safe, we encourage their usage and we've been working with our customers who we supported throughout the pandemic and who are now coming back to us for repeat business. To some very positive. So it's business strong enough that you're going to be doing more hiring. Well, we never really let any of our colleagues go um 69,000 across the globe. And we're still facing a lot of COVID shutdowns, as you can imagine in India Brazil and we're watching Western Europe emerged from it now as well. But we knew that the strength and our strength was going to be in retaining our skilled colleagues. So we kept our pact with them. I think we earned our trust and um I think it's gonna pay off. We'll continue to add, we've added sales people around the globe so that we get increased coverage and we'll continue to add field experts as needed to make sure that that our services business, Which really is our subscription business, it's 80% of our profit that that continues to grow as well judy. You became Ceo at a very difficult time. First there was a spinoff of United Technologies and then came the pandemic and right from the beginning you told employees that you've always believed that leaders are people with vision and judgment to lead in times of change. Especially when changes Hearts. What have you learned about? Easy to a crisis. And how do you describe your leadership so far as the first time ceo Yeah cuz I do talk about leaders growing when change is hard. I just never defined or imagine the global pandemic crisis with no playbook available really to help you know how to navigate. So I think you and I defaulted on my skills and my leadership strengths. Hopefully that you know I was always accessible uh inside the company but that was more of a physical meeting and access and traveling the world and you had to convert that and be accessible globally to your customers and your colleagues and you had to have empathy and you had to have the ability to listen to deal with items that were thrown at you that you did not expect. We deal with natural disasters all the time in the elevator business and we recover but that's a that's a small location. This was happening globally and you know, we just, you had to listen to others, solicit the best ideas because as leader, you don't always have those and then just just move forward, make decisions and then eventually you become, you become the the the leader who is Affirmative whose aspirational and who's also at times the cheerleader to pull people out when they're so down. You are the first woman to head Otis in this 168 year history. And you go to not at peace. Our commitment to change that when it comes to building a diverse, equitable and inclusive culture, we can do better and you do have progress in this area. But it's still, as you say, more to do, do you have actual target numbers that you want to achieve and what's your strategy to get there? I know we can do better and we have to do better. To me it's extremely important that we do set targets because we are we are a technical innovative company and this team responds to goals and objectives. So we step back. We implemented our commitment to change. We're very public about it and we set targets for ourselves, 50% of our executive leadership. We will have gender parity by 2030 and we joined paradigm for parody. We set DSG goals for ourselves so that we can be better. Better community servants with are made to move communities CSR program and we've learned that when you do good the business and you do well, we want to make sure everyone's voice is heard inside our company and that we look like the communities that where we live and work. That's very important to me. It's all about inclusion. It's about people feeling safe and bringing them hold their whole selves to work, because in our business, if they don't, they could run into some significant issues from serious injuries to even worse. And that's the responsibility I hold as leader, Susie is to make sure everyone goes home safe at night, back to their families and that we've lived up to our part of the commitment. And I lived up to my part of the commitment for my colleagues.