opposition quartzco annual report 2014

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OPPOSITION.QUARTZCO.COM

This is issue 07 of the

Quartz+Co annual report

Publisher:

Quartz+Co

Editors:

Ditte Rosing-Schow

[email protected]

Thomas Holm Møller

[email protected]

Torsten Hvidt

[email protected]

Published in Denmark,

Sweden and Norway.

Printed in Denmark.

Contact:

DENMARK

Ryesgade 3A

DK-2200 Copenhagen N

Tel +45 33 17 00 00

NORWAY

Wergelandsveien 21

NO-0167 Oslo

Tel +47 22 59 36 00

SWEDEN

Birger Jarlsgatan 7

SE-111 45 Stockholm

Tel + 46 (0)8 614 19 00

INDIA

MEC Intelligence

112, Udyog Vihar, Phase 4,

Gurgaon

Haryana, India. 122015

Tel +91 (124) 4802 700

www.quartzco.com

Quartz+Co’s Copenhagen office

is WindmadeTM Certified

04 Contents

B U S I N E S S A SU N U S U A L

R U N N I N G T H E G A M U T O F

P R I V A T E E Q U I T Y P U B L I C S E C T O RU N D E R

P R E S S U R E

CHAPTER ONE

CHAPTER TWO

CHAPTER THREE

08

STRIVING FOR

NEXT PRACTICE

QUARTZ+CO PERSPECTIVE

10

CLOSING

THE VALUE GAP

THE VALUE REALISATION PHILOSOPHY

12

WHEN FAILURE

ISN’T AN OPTION

MAERSK LINE

14

MAKING SENSE OF

BUSINESS

QUARTZ+CO AND RED ASSOCIATES

16

CONNECTING OIL RESERVOIRS

AND TALENT POOLS

MAERSK GROUP

19

B2B COMPANIES ON

THE EDGE OF DIGITAL

THE INTERNATIONALIST DIGITAL AWARD

20

FROM POVERTY TO

PROSPERITY

VESTAS WIND SYSTEMS

25

KNOWING THE ROPES OF

PRIVATE EQUITY

QUARTZ+CO PERSPECTIVE ON

PRIVATE EQUITY

26

REDEFINING MEDICAL

PROCUREMENT TO

REAP MUTUAL BENEFITS

ONEMED

27

SOMETIMES “NO”

BEATS “GO”

NETS HOLDING A/S

28

JOE IS MORE IMPORTANT

THAN HIS JUICE

JOE & THE JUICE/VALEDO

31

ONE PREPOSITION

MAKES A

WORLD OF DIFFERENCE

QUARTZ+CO PERSPECTIVE ON

THE PUBLIC SECTOR

32

ALL ABOARD

FOR NEW SOLUTIONS

NSB

34

SLABA

BANKA

BANK ASSET

MANAGEMENT COMPANY

36

PRIVATE CAPITAL,

PUBLIC CONTROVERSY

GOLDMAN SACHS/DONG ENERGY

38

EARNING OUR PLACE AT

THE ROUND TABLE

PUBLIC SECTOR WORK

05Contents

C O N N E C T T O T H E W O R L D

M O V I N GF O R W A R D ,

L O O K I N G B A C K

W H A T K E E P SE N E R G Y

L E A D E R S A W A K EA T N I G H T ?

CHAPTER FOUR

CHAPTER SIX

CHAPTER FIVE

41

KEEP ON

CONNECTING


42

GREATER THAN

THE SUM OF ITS PARTS

PARTNERSHIP WITH MEC INTELLIGENCE

44

LIKE WILL

TO LIKE

NEW PARTNERS IN QUARTZ+CO

46

THE NEXT GENERATION

OF DOG-BITERS

QUARTZ+CO RECRUITMENT CAMP

47

SCANDINAVIANS ARE

OBSESSED WITH

HIPSTER MOMENTS

CULTURAL OBSERVATIONS FROM OUR

INTERNATIONAL COLLEAGUES

48

THE US IS ONLY FOR

THE TOUGHEST WARRIORS

QUARTZ+CO BAROMETER 2013

51

TOUGH QUESTIONS

FOR ENERGY ELITES

QUARTZ+CO ENERGY SECTOR

PERSPECTIVE

52

END TO THE

GRIDLOCK

THE NORWEGIAN ELECTRICITY MARKET

53

TREAT OFFSHORE

AS OFF SHORE

REDUCING THE COST OF ENERGY

54

SHIFT IN GRAVITY

WITHIN OFFSHORE WIND

REPORT BY QUARTZ+CO

55

CLEAR STRATEGIES

FOR A CLOUDY FUTURE

BLADT INDUSTRIES

56

FUELLING THE

GROWTH ENGINES

OIL GAS DENMARK

58

ICONIC

MOMENTS

60

ONWARDS

EPILOGUE

06 Editorial

Two-time Pulitzer winner Walter Lippmann once said: “Opposition is indispensable. A good statesman, like any other sensible human being, learns more from his opposi-tion than from his fervent supporters”.

And indeed, without opposition we wouldn’t have heard about good statesmen like Gandhi, Mandela, Havel and Suu Kyi, just to mention a few. The democracy and the freedom of billions of people have depended on figures of opposition like these. We wouldn’t be struck when seeing Picasso’s Guernica, inspired when reading Hemingway’s A Farewell to Arms or overwhelmed when listening to Pink Floyd’s The Wall, had these artists not been in ardent opposition. And when you think about it, would we be able

to enjoy a game of foot-ball or chess, or a meal at NOMA, or use our iPads if it wasn’t for the concept of opposition?

Opposition is indispensable. Also for management consultants, if they are to change the status quo in various situations. At Quartz+Co, it’s even more than that. Be-cause even though we are firmly rooted in the traditional, professional values of tier-one management consulting, we founded this company with the clear intention of changing the industry from within. We want to combine the ability to tackle and solve complex problems with the ability to engage and mobilise client organisations. Rigorous analysis hand in hand with behavioural change.

A quick glance at the term “to oppose” in the dic-tionaries provides the following definitions: “to fight”, “to compete against”, “to disagree with” or “to counterbalance something”. And, as this report will show, we are indeed fighting, competing, disagreeing and counterbalancing the establishment together with our clients. In the following pages, we have selected a few cases and stories about our work with clients and other external partners that prove this point.

On the internal side, we saw a little opposition to business as usual as well: opposition to obscurity and ano-nymity. For example when our offices at different points in time were transformed into night clubs, with artists such as Oscar Lindros and Oh Land performing live for over a thousand guests. Or during our annual soccer tournaments in Denmark, Norway and Sweden, where we challenged prominent accounting, law and consulting firms for a day of fun. And when we invited clients such as Novo Nordisk, Grundfos and TDC to join our CSR initiative, helping African entrepreneurs succeed, or welcomed graduates to our two-day Recruitment Camps, a new hiring experience that gives us and our potential future colleagues a chance to get to know each other.

This report is about a great year at Quartz+Co, but even more so, it’s about a number of courageous companies who chose opposition, either to competitors, obscurity or business as usual. We hope you will find it inspirational.

—TEAM QUARTZ+CO

O P P O S I T I O N

Even though we are firmly rooted in the traditional, professional values of tier-one management consulting, we founded this company with the clear intention of changing the industry from within.

EDITORIAL

07Business as unusual

CHAPTER ONE

B U S I N E S S A SU N U S U A L

A constellation of dissimilar circular forms created with one Ø 140 mm ferrite ring magnet, one Ø 60 mm ferrite ring magnet, one Ø 60 mm ferrite disc magnet, two Ø 20 mm ferrite disc magnets and 850 grams of iron filings.

08 Business as unusual

CHAPTER ONE

BUSINESS ASUNUSUAL

09

Established companies have traditionally ex-perienced difficulties with innovation, partly

due to their path-dependent nature of maintaining tradi-tional practices even when better alternatives exist. In this chapter, you can read about companies that have succeeded in breaking the mould. Some have challenged the tradi-tional approach to understanding the market and custom-ers by applying the process of sensemaking. Others, such as Maersk Group, have invited people to compete on their knowledge of the oil industry in Quest for Oil, the first real-time strategy resource management game, to address recruiting challenges. And Vestas counterbalances the tra-ditional philanthropic approach to CSR through Wind for Prosperity, a commercially viable business model that is attractive both to investors, local business partners and society, which will bring energy to more than one million people and developing countries worldwide.

Next Practice consulting must strive to be the change, not just a merchant of transition. It relies on a continuous movement: one that never reaches an ultimate goal bring-ing the journey to its completion. It must constantly chal-lenge the status quo in order to be relevant to clients.

Innovation is difficult, but approaching it systemati-cally with customised and connected solutions greatly in-creases the chance of success. Our clients have shown how “business as unusual” has served them well in creating new methods, products and services, and consequently carved

out value pockets that would have been un-attainable if applying more traditional prac-tices.

Quartz+Co was founded on a prevailing attitude and not based on a temporary truth or a momentary pain in the market. We are the change, not just merchants of transi-tion. We are not a company, we are a collective, a civilisa-tion. A movement of many. Tomorrow is never here. We will never reach a goal that will bring our movement to its completion because our purpose in management consulting is to devise Next Practice.

First-tier consulting skills

– insight and experience delivered with integrity

Flexible approach

– matching team and skill configuration to client needs

People centrism

– mobilising client organisations’ energy and capacity

Leadership through followership

– creating leadership opportunities as early as possible

Individualised career development

– providing accelerated learning and career ownership

Opportunity to influence

– offering room to create, build and be entrepreneurs

Next Practice consulting must strive to be the change, not just a merchant of transition.

Innovation is difficult, but approaching it systematically with customised and connected solutions greatly increases the chance of success.

Business as unusual


INNOVATIVE SOLUTIONS TO STRATEGIC CHALLENGES

S T R I V I N G F O RN E X T P R A C T I C E

NEXTPRACTICE

WHAT WE OFFER TOOUR CLIENTS

WHAT WE OFFER TOOUR PEOPLE

10

All too often, we hear stories of large strategy projects that have lost either direction, momentum, or both. They were all launched based on attractive business cases, with fund-ing and endorsement from both top management and – ini-tially – a present, eager and demanding steering committee. They covered all aspects of change management – burning platform, stakeholder management, communication, etc., and celebrated kick-offs, quick-wins and successful pilot launches in internal magazines. Some even managed to create a lasting impact. But few even came close to deliver-ing the value that the initial business case promised.

This “value gap” is an all too common outcome of strategy projects. According to a Harvard Business Review study, only 60% of promised value gains are realised on average. The fundamental problem lies in the assumption that projects deliver the value. Projects don’t deliver value,

people do. The fact is that the larger the pro-jects, the less impact they are likely to have, as they often take on a life of their own and the

The fundamental problem lies in the assumption that projects deliver the value. Projects don’t deliver value, people do.

The need for large, successful and often rapid transformation is a given for most large corporations. Non-change isn’t an option, so something must be done. What we call Value Realisation is a proven method for closing this value gap.

Business as unusual

business perspective gets lost. In a recent project, we dis-covered that a high-priority strategic headquarter initiative was #94 on the receiving organisation’s priority list!

The need for large, successful and often rapid trans-formation is a given for most large corporations. Non-change isn’t an option, so something must be done. What we call Value Realisation is a proven method for clos-ing this value gap.

THE VALUE REALISATION PHILOSOPHY

THE CFO APPROACH TO CHANGE MANAGEMENT

C L O S I N GT H E VA L U E G A P

Value Realisation is — A shared aspiration

Value Realisation is a shared aspiration between us and our clients. It’s a commitment to do more than “get things done” and to hold each other accountable for delivering positive impact and the value which was promised.

Value Realisation is — A mindset

Relentless focus on realising value creates a mindset of pragmatism and accountability. Don’t make promises (or business cases) you can’t keep. Think end-to-end – when and how will value gains be realised, and who is going to institutionalise the changes necessary to realise the value gains?

Value Realisation is — A proven approach

Value Realisation isn’t a product of modern science. It’s not even breaking new ground. It’s a simple but disciplined approach that applies well-known concepts, deep under-standing of the business, unbeatable enthusiasm and the ability to support the receiving organisation in driving its own transformation.

The value gap between intended and actual benefits from projectsSource: Harvard Business Review: “Turning Great Strategy into Great

Performance” (37% average performance loss), McKinsey-Oxford study: “McKinsey Oxford Reference Class Forecasting for IT Projects Study”

(56% benefit short-fall)

VALUEDELIVERED

VALUEGAP

35— 55%

VALUEEXPECTED


The key principles of Value Realisation may look simplistic, but most leaders will know that matching the ideal transformation pro-cess with the real world is by no means an easy job. In order to realise the full benefits of strategy programmes, leaders must keep a disciplined focus on all three principles of Value Realisation:

BENEFIT CASE

MAINTAIN RELENTLESS FOCUSON THE BENEFIT CASE

Establish a clear and specific benefit case, which describes what you want to achieve in terms of dealing with real business pains and problems. The benefit case must be the basis for all direction setting, decision making, tracking and follow-up through the entire process – from start to finish.

USE AN OUTSIDE-INPERSPECTIVE

Understand the business situation of the receiv-ing organisation and adapt to it. Be realistic about what the receiving organisation is actually capable of achieving and about the relative importance of the initiative in this context.

THINK OUTSIDE-IN

DELIVER VALUE THROUGHTHE RECEIVING ORGANISATION

Engage and mobilise leaders in the receiving organisation to drive leader-led change in order to deliver to the business, by the business and for the business. Make the benefit case tangible and assign accountability to realise value in the receiv-ing organisation.

LEADER-LED CHANGE


Over the past decades, the shipping industry has made a huge impact on the global economy by continuously offer-ing better transport solutions. Maersk Line has been a key contributor to this development, enabling customers to de-liver on their promises. Unfortunately, this value creation has not translated into satisfactory bottom line gains for Maersk Line. In the shipping industry, price differentia-tion is limited, which makes competitive cost performance crucial for long-term survival. In the last five years, Maersk

Line has raised perfor-mance from below to slightly above the in-dustry average, leaving room for improvement.

In the shipping industry, price differentiation is limited, which makes competitive cost performance crucial for long-term survival.

Through standardisation, simplification and automation, SWITCH improves timeliness, consistency and accuracy in a cost-effective way.

To address this is-sue, the SWITCH pro-gramme was launched in early 2013 with the purpose of streamlin-ing management decision making by providing timely and accurate financial data through global standardised pro-cesses made possible by one central IT system. Through standardisation, simplification and automation, SWITCH improves timeliness, consistency and accuracy in a cost-effective way.

Due to the importance of SWITCH and the motiva-tion behind it, failing to deliver the promised results was not an option. Therefore, the SWITCH programme de-cided to follow the Value Realisation approach (see page 10 for further details) – which applies a steely-eyed focus on the intended benefits as well as the resources and capabili-ties of the receiving organisation.

SWITCH BY MAERSK LINE

VALUE REALISATION IN PRACTICE

W H E N FA I L U R EI S N ’ T A N O P T I O N

13

The SWITCH programme is focused on standardising, simplifying and automating systems and processes on one global IT platform. The programme affects two core processes of the machinery driving Maersk Line’s engine. The first process, Procurement-to-Pay, deals with how to procure and, ultimately, pay for goods. Shipping is a cost-intensive industry – this means that Maersk Line must weigh deci-sions heavily and have an established decision-making process for the opera-tion. The second process is Accounting-to-Reporting, which deals with how accounts are managed and how informa-tion is disseminated throughout the or-ganisation to facilitate sound decision making.

Essentially, SWITCH enables the organisation to base decisions on timely and accurate management infor-mation by providing efficiencies, better data quality and faster book closure.

“The SWITCH programme is already well on its way to delivering the planned benefits – all less than 18 months after programme initiation. The early engagement with all stakeholders on the benefit case and on how to realise it has strengthened the understanding, determination and willingness to take ownership”

—CAMILLA ALM, DIRECTOR, MAERSK LINE

Business as unusual

SWITCH IN BRIEF


In early 2014, Quartz+Co hosted From Sensemaking to Growth, a seminar with Lars Rasmussen from Coloplast and Mikkel B. Rasmussen from ReD Associates on using the human sciences to solve tough business problems.

Phase 1

Frame the problem as a phenomenon—

Phase 2

Collect the data—

Phase 3

Look for patterns—

Phase 4

Create the key insights—

Phase 5

Build the business impact

THE FIVE PHASES OFSENSEMAKING

Source: The Moment of Clarity by Christian Madsbjerg

and Mikkel B. Rasmussen

15

Quartz+Co supports clients in improving their core com-mercial disciplines not only from a quantitative perspective, but increasingly also from a qualitative perspective. As a consequence, we are working closely with pioneers in the human sciences in order to dive deep and get under the surface of surveys and data. In our opinion, an interest-ing pioneer in this field is ReD Associates, the company behind the article An Anthropologist Walks into a Bar…, published by Harvard Business Review, and the book The Moment of Clarity, a hands-on guide to using the human sciences to solve businesses’ toughest problems.

ReD uses techniques from anthropology, sociology and philosophy to shed light on the big unknowns – new social behaviours, changes in market logic, new patterns in the adoption and use of technologies, changing aesthetic ideals, etc. – issues likely to pose serious challenges to in-cumbent firms. By looking at how people live, what they do, what their habits are and how they see the world, we can understand the “soft” factors underlying the “hard” facts we can see and measure. The hard facts can tell us what we do, but rarely why we do it. Sometimes we act rationally and consciously; other times we come home with crackers and ice cream when what we really needed was bread and mayonnaise for tomorrow’s lunchbox. In other words, we don’t always know our own motives, and when asked to articulate them, we often post-rationalise in an attempt

to justify our actions. Homo Economicus, the infinitely rational, utility-maximising individual

Business as unusual

QUARTZ+CO AND RED ASSOCIATES

USING THE HUMAN SCIENCES TO SOLVE BUSINESS PROBLEMS

M A K I N G S E N S E O FB U S I N E S S

that we base our linear problem-solving mod-els on, is a rare breed.Therefore, it can be beneficial to supplement quantitative data with qualitative insights to “get people right” and ensure sustainable growth.

The transformative power of customer insights

An example of the complementarity of quantitative and qualitative approaches is a project we completed in collabo-ration with ReD Associates for a leading, global medtech company that needed to transform its product portfolio and become more customer-centric. ReD conducted a compre-hensive field study with more than 500 hours of observa-tions, interviews and videos of customers. The results of the study were translated into a number of innovation briefs that aligned future product development with the observed customer behaviour. Quartz+Co subsequently adapted the innovation briefs for a commercial context, assessing their potential and prioritising them accordingly. A new custom-er segmentation schedule and a go-to-market model were designed in accordance with customer preferences. The result of the co-operation was a product portfolio custom-tailored to the company’s customers and a better approach to the marketplace.

We are working closely with pioneers in the human sciences in order to dive deep and get under the surface of surveys and data.

Homo Economicus, the infinitely rational, utility-maximising individual that we base our linear problem-solving models on, is a rare breed.

Download the first chapter of The Moment of Clarity and watch the video from the seminar

From Sensemaking to Growth featuring Lars Rasmussen from Coloplast,

Mikkel B. Rasmussen from ReD Associates and Hans Henrik Beck from Quartz+Co.

EXTRASopposition.quartzco.com/others


Quest for Oil is the first-ever real-time strategy game about the oil industry. The game was launched by Maersk Group and takes the player on a quest for one of today’s most indispensable resources – oil.

17

In June 2013, Maersk opened the door to the virtual world of oil explo-ration through Quest for Oil, a freely distributed gaming experience. The game emerged as a result of Maersk’s own quest to spread awareness about the oil industry and reach

a younger, global talent pool. Drawing on their vast ex-perience from the high-tech extractive industries, Maersk tests the strategic and practical skills of the player, taking him or her on a quest for one of today’s most indispensable resources – oil.

Quest for Oil is the world’s first real-time strategy game about the industry and is truly innovative in its abil-ity to combine informational and educational elements in a format that appeals to players’ competitive instincts. It’s also a success story on how alternative channels can be used to solve companies’ strategic communication needs.

Quest for Oil was developed by Quartz+Co in co-operation with Serious Games Interactive, an award- winning, research-based developer of games, simulations and virtual worlds.

With Quest for Oil, Maersk has tapped into the gamifi-cation trend and the potential it holds for creating social engagement. Gamification merges usability and behav-ioural psychology to appeal to user needs, encouraging collaboration and motivation by associating actions with results.

Gaming breaks down a process into manageable tasks, but links them clearly to big-picture evolution. Thus, the game can be used for educational purposes both inter-nally in the organisation and externally.

Business as unusual

“New times call for new measures, and we want to use the computer game to tell the story of an extremely innovative business, which the entire world depends on, in a new and engaging way”

—CLAUS V. HEMMINGSEN,

CEO OF MAERSK DRILLING

QUEST FOR OIL BY MAERSK GROUP

GAMING THE WAY TO AWARENESS

C O N N E C T I N G O I L R E S E R V O I R SA N D TA L E N T P O O L S

EXPLORING THE POTENTIALOF GAMIFICATION

Drillers from Maersk playing Quest for Oil. Watch the video online at quartzco.com

Over 40 million people have been reached worldwide

Quest for Oil has been played in over 182 countries

The number of game plays totals more than 300,000


Maersk’s revolutionary game also caught the atten-tion of highly esteemed international news outlets such as Sky News, BBC, Fox News, CNN, Forbes, Reuters, in addition to the Danish Broadcasting Corporation and the Danish television station TV2. CNN, for example, reported how “The Danish energy firm Maersk Oil has taken a new approach to boosting interest in the industry by launching a computer game that sees players fighting it out to retrieve oil from the ocean floor. Maersk launched the game Quest for Oil to highlight the complexities of oil exploration and also to inspire new recruits”. Forbes also featured the game: “Focused on strategy, the game intro-duces players to a remote corner of the industrial world ac-companied by English-accented narration. Choppers tick away overhead, drilling apparatuses rise above the waves, and oil lies locked beneath geothermal maps of the ocean

floor, where only the most skilled can find it”.“Most people take for

granted that we have oil and natural gas and not many people understand what it takes to find and produce it. The world’s need for oil and gas is leading exploration into ever deeper waters and ventures, demanding precision and cutting edge technology. It’s a sophisticated, fascinating industry and Quest for Oil offers everybody a glimpse of what oil and gas exploration is all about today”

—JAKOB THOMASEN,

CEO OF MAERSK OIL

Watch the trailer, learn about the game’s development and educational use. Download

and play Quest for Oil.

EXTRASopposition.quartzco.com/qfo

1

(1) CNN reports how Maersk Oil is using gaming to recruit

workers. (2) Quest for Oil was also

heavily featured in Danish news media.

(3) Jakob Thomasen, CEO of Maersk Oil, states to CNBC that he hopes to explain

the oil industry to the masses and perhaps

bridge a skill shortage gap.

2

3

19

On November 14, two large Danish B2B companies were honoured for their breakthrough communications approach at the Internationalist Awards for Innovative Digital Solutions 2013 in New York. Vestas’ pro-wind campaign Act on Facts and Maersk Oil’s subsurface gaming experience Quest for Oil won gold and bronze, respectively. The winning projects highlight the emerging world, social causes and purposeful branding, and display superior insight, strategy and results in the way they mar-ket their products globally. Quartz+Co’s communications and marketing strategy practice supported in developing and rolling out both of the award-winning digital concepts.

“Many B2B companies have realised that there is immense potential in using digital and social media tech-nology to target audiences that are otherwise difficult to reach at a relatively low cost”, says David Heilmann, Engagement Partner and Digital Strategist at Quartz+Co.

“Act on Facts and Quest for Oil are two examples of how business strategy can be converted into effective activation concepts, thus creating awareness and engaging stakeholders in new ways”.

Business as unusual

On November 14, two large Danish B2B companies were honoured for their breakthrough communications approach at the Internationalist Awards for Innovative Digital Solutions 2013 in New York.

THE INTERNATIONALIST DIGITAL AWARD 2013

VESTAS WIND SYSTEMS AND MAERSK BRING HOME DIGITAL PRIZES FROM NEW YORK

B 2 B C O M PA N I E S O NT H E E D G E O F D I G I TA L

CONTINUE ONLINELinks

Join the Act on Facts movementactonfacts.org

—

Play Quest for Oilquestforoil.com

Vestas’ Act on Facts campaign aims to counter anti-wind power movements by providing fact-based infor-mation about the misconceptions related to wind energy, disseminating information on pro-wind activities and de-livering vox pop video content. It debunks myths about the wildlife impact, health risks and efficiency of wind turbines, among others.


WIND FOR PROSPERITY BY VESTAS WIND SYSTEMS

COMMERCIAL INNOVATION

F R O M P O V E R T Y T OP R O S P E R I T Y

An abundance of wind is the key to Vestas’ lat-est commercial innova-tion programme, Wind for Prosperity, which, by cross-mapping glob-

al wind currents and health data, is in the process of bring-ing energy to more than one million people in developing countries over the next three years.

Wind for Prosperity is neither philanthropy nor de-velopment aid. It’s a commercially viable business model that seeks to attract private investors. Perhaps this is why the programme has received backing from a range of influ-ential persons, from UN General Secretary Ban Ki Moon and business magnate and founder of the Virgin Group, Richard Branson, to Jeffery Sachs, renowned economist and leader in sustainable development, alongside others.

Wind for Prosperity combines two data sets: global wind currents and child mortality rates. Locate the areas where winds are strongest and mortality rates are highest, and the result is a map of poor, rural communities with-out access to reliable electricity, but with an abundance of wind re-sources. It’s the lives of these 100 million peo-ple that Vestas seeks to improve in the long run. The programme will create social and economic benefits, which are currently scarce or lacking in the affected communities, such as access to clean water, healthcare, irrigation, education and a communi-cation infrastructure. Additional opportunities are being explored in countries such as Zimbabwe, Lesotho, Jordan, Indonesia, Pakistan, Vietnam and Nicaragua.

North Horr, Kenya, may not always have access to food and clean water, but this remote community on the edge of the desert has one resource in abundance – wind.

Wind for Prosperity combines two data sets: global wind currents and child mortality rates.

+100 million people live in areas with poverty and abundant wind resources

7,000 wind turbines will be deployed in rural communities through Wind for Prosperity

1.3 billion people around the globe live withoutaccess to affordable and reliable electricity


Wind for Prosperity managed to attract attention from in-ternational as well as Scandinavian news media. The New York Times describes how Wind for Prosperity “aims to start supplying electricity next year to more than 200,000 people spread across roughly 13 communities in Kenya. The company plans to replicate the project elsewhere in Africa and in Asia and Latin America, using refurbished wind turbines in tandem with diesel generators to cut pow-er costs by at least 30 percent”, while the Guardian empha-sises as especially interesting “that Vestas aims to show that

the do-gooder projects can also be profitable. It hopes to attract a vari-ety of private investors, including corporate in-vestors, to help finance the program”.

Wind for Prosperity was launched in New York in November 2013. The initiative managed to attract attention from international as well as Scandinavian news media and has received backing from a range of influential persons.

Join the conversation on Twitter#wind4prosperity


The Wind for Prosperity project couples robust, factory- refurbished wind turbines and advanced diesel power gen-erators to create a hybrid system well-suited for operation on mini-grids in remote locations with limited infrastructure. Wind for Prosperity – a partnership between Vestas and, among others, Masdar, the Abu Dhabi renewable energy company – aims to supply clean energy to hundreds of thou-sands of people across multiple communities in rural areas within the coming months and years. The project will supply electricity at a cost which is at least 30% below the current price of diesel-generated power, the only viable alterna-tive for populations currently living without or with very limited access to electricity.

Developing the technology, however, wasn’t the most complicated part of the Wind for Prosperity initiative. “We decided we wanted to develop a technology solution that’s also a commercial solution, and it will enable us to bring wind energy to millions of people. Finding the technol-ogy solution hasn’t been the most difficult thing. The most difficult part is designing a business model that makes it attractive to investors, local business partners and the soci-ety”, says Morten Albæk, Group SVP and CMO of Vestas and the pioneer behind the programme.

HYBRID TECHNOLOGY TURNS WIND INTO VOLTAGE

Learn more about the business model and vision behind Wind for Prosperity and watch

the interview with Sir Richard Branson about business as a force of good.

EXTRASopposition.quartzco.com/wfp

“Well, I’m convinced that all businesses that will succeed in the long term will be those who manage to balance their pursuit of profit with a consideration for this beautiful planet and the needs of its people. These aren’t mutually exclusive goals, and there are many examples that show how it can be done.One such example is the Wind for Prosperity initiative launched by Vestas Wind Systems and their partner Masdar. Wind for Prosperity looks to address the momentous challenge of energy access. Well over a billion people worldwide continue to live without any access to clean power to light their homes and power their stoves. This affects their health, their livelihoods, their chances at prosperity. It disempowers women and puts children at risk. It’s an unacceptable situation, and we’re inspired by Vestas and Masdar’s vision to change it. Both have joined forces to develop a model that will bring clean and affordable electricity to communities that have never experienced it. Wind for Prosperity has enormous potential to change millions of lives forever while sustaining our planet and turning a profit”

—SIR RICHARD BRANSON

23Running the gamut of private equity

CHAPTER TWO

R U N N I N G T H E G A M U T O F

P R I V A T E E Q U I T Y

800 grams of iron filings pulled towards two poles generated by a 70x30 mm ferrite block magnet and a Ø 50 mm ferrite disc magnet.

24 Running the gamut of private equity

CHAPTER TWO

RUNNING THE GAMUT OF

PRIVATE EQUITY

25Running the gamut of private equity

From our perspective, 2013 was not a remarkable year be-cause of the number of transactions, but because of the large variety of transaction types and sizes. We established new relationships with Swedish funds and were part of several iconic projects for large Anglo-American funds including Goldman Sachs, KKR and CVC. In Denmark, we were involved in the majority of large and medium-sized deals last year, in transactions ranging from less than DKK 100 million to more than DKK 10 billion. We served clients from industries such as IT, shipping and retail, to name a few. Our support covered all stages of the private equity ownership cycle, from industry screening, due diligence and post-acquisition support to pre-exit business plans. The latter is an area where we have seen increased activ-ity due to a growing amount of preparation and required documentation needed for exits.

Private equity firms are disciplined in their fact-based decision making when it comes to evaluating an invest-ment. The role of the advisor in this process is to bring in-dependence, analytical rigour and creativity as well as vast industry and functional knowledge to the due diligence process. Each project’s scope must be uniquely designed together with the private equity firm and reflect the deter-mining issues for the deal’s success. Often, this includes a combination of field research (interviews with customers, suppliers and competitors) and internal analysis based on interviews with the target’s management as well as an as-

sessment of the custom-er base and operations. It’s also useful to focus on exit opportunities if

In Denmark, we were involved in the majority of large and medium- sized deals last year, in transactions ranging from less than DKK 100 million to more than DKK 10 billion.

Private equity firms are disciplined in their fact- based decision making when it comes to evaluating an investment. The role of the advisor in this process is to bring independence, analytical rigour and creativity as well as vast industry and functional knowledge to the due diligence process.

these are unclear and to lay out the post-acquisition agenda based on the findings in the due diligence process.

In this way inves-tors will make better investment decisions by performing due dili-gence, assessing per-formance improvement opportunities and set-ting the post-acquisi-tion agenda.

QUARTZ+CO PERSPECTIVE ON PRIVATE EQUITY

DUE DILIGENCE FOR BIG AND SMALL BUSINESSES ALIKE

K N O W I N G T H E R O P E S O F P R I VAT E E Q U I T Y

What is the company’s business platform?—

How attractive is the industry, and how is the company positioned in the market?

—What is the stand-alone growth potential

(sales and earnings)?—

Where are the synergies/optimisation opportunities, and what is their potential?

—What are the “doomsday scenarios” and risks?

—What are the exit opportunities?

A SOLID DUE DILIGENCE IS BASED ON RIGOROUS,

FACT-BASED KNOWLEDGE ABOUT BOTH THE COMPANY AND

THE INDUSTRY AND TYPICALLY COVERS THE FOLLOWING AREAS:

26

The healthcare systems of Western, industrialised nations will face significant challenges in the years to come. Age-ing populations and declining numbers of healthcare work-ers increase the costs and threaten the quality of care. In re-sponse to this changing customer landscape, OneMed has developed a new proposition to the healthcare systems, in-

troducing performance and cost improvements as an integrated part of the offering.

OneMed can prevent unnecessary processes and costs to the healthcare system. And the potential is huge: up to 20% of the combined spend pool.

OneMed has developed a new proposition to the healthcare systems, introducing performance and cost improvements as an integrated part of the offering.

The idea is simple. As a supplier of medical equip-ment to the healthcare industry, OneMed has full over-view of what is prescribed to the individual patient and can follow patient flows. This allows OneMed to forecast or correct prescription mistakes or inefficiencies swiftly. By proactively correcting these situations, OneMed can pre-vent unnecessary processes and costs to the healthcare sys-tem. And the potential is huge: up to 20% of the combined spend pool.

The solution, however, is complex. To proactively forecast and correct actions, systems must be well inte-grated with the healthcare providers’ systems. Further, it requires expertise and co-operation between the health-care system and OneMed to capture the savings. This is nevertheless the jour-ney OneMed is about to embark on – to help the healthcare system succeed while creating a significant competitive advantage.

POSITIONING FOR THE FUTURE IN HEALTHCARE

R E D E F I N I N G M E D I C A LP R O C U R E M E N T T O

R E A P M U T U A L B E N E F I T SONEMED

Running the gamut of private equity

Net sales of aboutSEK 3 billion

In December 2010, OneMed was acquired by 3i – an international investor in private equity,

infrastructure and debt management, investing in Europe, Asia and North America

Strong presence in 10 countries in Northern and Eastern Europe

27

The sale of Nets Holding A/S to foreign investment funds at a price well over the initial expectations grabbed head-lines this year. Quartz+Co was involved in the case as advi-sor to an international private equity fund. Nets is the lead-ing provider of payment, card and information services in Scandinavia, including BetalingsService in Denmark and AvtaleGiro in Norway as well as Dankort and BankAxept. Nets’ business model and value is radically dependent on a number of key areas: technological changes in payment systems, new business models/initiatives from banks and retailers, regulatory influences, the company’s ability to control costs, etc. These were issues with significant impact that needed to be clarified within a short period of time in order to understand the potential of the business and the right price.

Nets is without a doubt uniquely positioned in the Nordic payment system. However, unique companies can also be expensive – and sometimes the best outcome is a “no” rather than a “go”. In light of the commercial assess-ment and the bullish, competitive bid situation for Nets,

our client decided not to pursue the acquisi-tion.

In light of the commercial assessment and the bullish, competitive bid situation for Nets, our client decided not to pursue the acquisition.

NETS HOLDING A/S

ACQUIRING AT THE RIGHT PRICE

S O M E T I M E S “ N O ”B E AT S “ G O ”

In March 2014, the Nordic card payment provider was acquired by the consortium of Advent International and Bain Capital and the Danish pension fund ATP for a price of DKK 17 billion, making it the largest leveraged buyout in Europe this year. Advent and Bain may see other opportunities as they are already active in the electronic payment processing industry through their acquisition of Royal Bank of Scotland’s WorldPay Ltd, Europe’s largest payment processor in 2010.


28

Since its founding in 2002, Joe & The Juice has experienced exponential organic growth, currently boasting a turnover of DKK 200 million.

To fully assess the strength of Joe & The Juice’s value prop-osition, a deeper understanding of the customers and their perception of the juice bar was needed. Joe & The Juice’s value proposition is health, quality products and a cool vibe that caters to a younger customer base. But who exactly made up this customer base, what were their preferences and how did they interpret the Joe & The Juice concept?

A comprehensive customer analysis was completed with several hundred respondents across the store network who had just visited a Joe & The Juice bar. Contrary to what might be expected, the cool vibe was clearly the most important part of the juice bar’s concept, while only a few of the respondents mentioned the health aspect of its prod-ucts. Although the juice bar attracts a demographically diverse customer group, there was a clear trend towards a younger female audience. In fact, a majority of the female customers were below the age of 30 and frequent users, vis-iting more than once a week or several times a month.

In other words, Joe & The Juice’s value proposition is to a great extent dependent on the atmosphere of its juice bars – Joe is more important than his juice. This highlights the strengths and uniqueness of the concept, but is also a potential risk factor for the sustainability of the concept over time; where continuous rejuvenation is key to main-taining its “coolness” and appeal to a younger audience.Currently, however, the sky seems to be the limit for Joe and his juice.

+50% emphasised the “cool vibe”

(loud music, cool and flirty guys, modern design, youthful atmosphere)

—

~40% emphasised “the good stuff”

(tasty food, fresh ingredients, high qualityand refreshing juices)

—

<10% mentioned “healthy”

(nutritious, low fat, vitaminsas key elements of the concept)

Since its founding in 2002, Joe & The Juice has experienced expo-nential organic growth, currently boasting a

turnover of DKK 200 million. The Danish juice bar chain has expanded its operations and is now serving freshly squeezed juice with a wink and a smile at over 50 locations throughout Northern Europe, including Scandinavia, Germany and the UK. However, the rapid expansion came as no surprise to founder and CEO Kaspar Basse. He and his team had ambitious plans for international growth, and in 2013, they set out to establish a strategic partnership that would help the company realise its goals. They found such a partner in Swedish private equity firm Valedo, which be-came the majority shareholder in December of last year.

JOE & THE JUICE/VALEDO

DUE DILIGENCE

J O E I S M O R E I M P O R TA N TT H A N H I S J U I C E

WHO IS JOEAND WHAT’S IN HIS JUICE?

CUSTOMER PERCEPTIONS OF THE JOE & THE JUICE CONCEPT


29Public sector under pressure

CHAPTER THREE

P U B L I C S E C T O RU N D E R

P R E S S U R E

600 grams of iron filings rise under the magnetic force of a Ø 60 mm ferrite disc magnet, forming a crowd of iron spikes.

30 Public sector under pressure

CHAPTER THREE

PUBLIC SECTORUNDER

PRESSURE


For the Quartz+Co public sector team, 2013 was a break-through year. It brought several key learnings that make us optimistic about the future. We established that involv-ing senior teams and insisting on working with our clients, not just for them, is extremely important in complex stake-holder settings with many, often conflicting, interests and expectations. In order to create lasting change, our work in many cases is to enable public sector leaders to put solutions into practice, by working actively with them, for example in how to communicate change or overcome barriers to implementation. We discovered that although the public sectors in Sweden, Norway and Denmark face different challenges, there are many valuable lessons that travel well across borders.

Within the past two years, Quartz+Co has worked with ten government ministries as well as numerous gov-

ernment agencies and local municipalities on some of the most press-ing political and ad-ministrative issues.

Although the public sectors in Sweden, Norway and Denmark face different challenges, there are many valuable lessons that travel well across borders.

How can a ministry effectively set and operationalise a direction across its department and agencies, which not only defines the right priorities, but also strengthens its leadership team and ability to execute?

However, there are three themes which keep surfac-ing in our work throughout the public sector:

First and most obvious, the need to balance cost and qual-ity, especially in terms of cost transparency and efficiency. This refers to determining precisely how funds in an organ-isation or state-owned enterprise are spent and what the potential is for improving outcomes through the reduction or reprioritisation of overall cost levels.

Second, the constantly changing political landscape puts pressure on the public sector’s ability to work with strategic planning and transformation. How can a ministry effec-tively set and operationalise a direction across its depart-ment and agencies, which not only defines the right priori-ties, but also strengthens its leadership team and ability to execute?

Finally, internal processes must reflect the purpose and nature of government organisations. Governance and management of public sector institutions and state-owned enterprises must ensure the best possible link between ad-ministrative and political goals on the one hand and the actual output on the other.

Though the context is often quite different, these issues are not that different from those facing many of our pri-vate sector clients. We are convinced that both sectors can learn from each other – and that both of them benefit when consultants not only work for them, but with them. Prepositions matter.

QUARTZ+CO PERSPECTIVE ON THE PUBLIC SECTOR

WORKING WITH THE PUBLIC SECTOR

O N E P R E P O S I T I O NM A K E S A

W O R L D O F D I F F E R E N C E

32

For a long time, the Norwegian railway sector has struggled with a bad reputation, especially with regard to punctuality and the perceived quality of service. To complicate

matters further, Statistics Norway expects the Norwegian population to have grown by one million by 2040. In other words, the Norwegian railway sector will face major chal-lenges in the coming years.

The election of the new parliament in 2013 meant majority support for significant changes to the railway in-dustry, including improved competition and a thorough restructuring of the sector. This, together with the EU’s highly ambitious, game-changing railway agenda, has cre-ated the perfect breeding ground for new initiatives to get the Norwegian railway sector back on track.

The elections to the Norwegian parliament in 2013 resulted in majority support for significant changes to the railway industry, including improved competition and a thorough restructuring of the sector.

Instead of waiting for politicians to act, NSB took the initiative and came with a groundbreaking suggestion that has never before been seen in the railway industry.

Public sector under pressure

NSB acknowledged that major changes lay ahead and decided to make a bold move. In November 2013, Geir Isaksen, CEO of NSB, held a press conference where he stated that new solutions were necessary to solve the problems of the Norwegian railway, and presented NSB’s view on how the railway sector should be redesigned, in-cluding both NSB’s and Jernbaneverket’s responsibilities. A new sector organisation was proposed, forming two new companies. The first company is a pub-lic administration com-pany responsible for the customer offerings and all infrastructure, i.e. rail tracks, stations, rolling stock, etc., as well as long-term route planning. The other company will perform the operative tasks, i.e. train operations, in competition with other com-panies.

The new structure will clarify the roles and respon-sibilities in the sector, separating the public adminis-tration part from the part exposed to competition (train operations). It will also enable long-term development of the train sector in Norway to meet tomorrow’s demand for reliable train services. Instead of waiting for politicians to act, NSB took the initiative and came with a groundbreak-ing suggestion that has never before been seen in the rail-way industry. “This structure will reallocate responsibility and authority, providing a needed “clean-up” of the rail-way sector. In 15 years, we want to be able to say that the Norwegian railway is among the best in Europe”, says Geir Isaksen.

NSB

GETTING THE NORWEGIAN RAILWAY BACK ON TRACK

A L L A B O A R DF O R N E W S O L U T I O N S

“We think that it creates an opportunity for the railway to become better. We believe it’s important to go to further lengths to ensure that customers receive a better offering in the future. Large investments in the sector have been made. The future solution should ensure that we get the most out of these investments”

—GEIR ISAKSEN, CEO AT NSB

Growth in the number of travels was at 7.3%, or about 4.1 million additional travels

In 2013, NSB presented their bestfinancial results ever

Increase in the number of travels has saved the environment about 5,500 tonnes of CO2

33

Learn more about the future challenges of railways and the new sector organisation.

EXTRASopposition.quartzco.com/nsb


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34 Public sector under pressure

“Reducing the share of non-performing assets in banks and ensuring capital adequacy are key measures to strengthen the stability of banks and, consequently, improve financing conditions. With the aim of implementing these measures, the Bank Assets Management Company has been established”

—SLOVENIAN PRIME MINISTER

ALENKA BRATUŠEK

35

The Slovenian economy was hit hard by the financial crisis with a drop in real GDP of 11% between the pre-crisis peak and 2013 – the largest output loss in the euro zone after Greece. Trust in the economy was low; government bonds were trading only 200 basis points higher than in Spain and Italy. As trust waned and the economy contracted, banks reeled under the weight of non-performing loans, which reached a staggering amount of +20% of the total loans. “Slaba banka” – meaning “bad banks” – became a recurring theme in Slovenian news coverage.

At the end of 2012, three systemic banks were in se-rious risk of collapse, so in order to save the country from financial catastrophe, the government established the Bank Asset Management Company (BAMC). BAMC’s man-date was twofold: carving out non-performing loans from government-owned systemic banks and restoring the high-est possible amount of taxpayer money by actively manag-ing the non-performing loans.

A comprehensive task was at hand: to oversee the transfer and manage the restructuring of the loans as well as to design and set up the necessary processes and infra-

structure for BAMC to become a highly effec-tive organisation.

The transfer of EUR 3.3 billion in non-performing loans took place on December 20, 2013, and included two of the three systemic banks – Nova Ljubljanska Banka and Nova Kreditna Banka Maribor – but not without a few initial setbacks. Early in the process, conflicting interests between the European Commission, the Slovenian government and the banks caused a number of issues in terms of prices and the selection of assets from the banks’ books. Once the prices and the list of assets were locked in, the transfer was scheduled in multiple tranches so BAMC would receive loans in manageable portions.

However, less than a month before the first credit transfer, the Bank of Slovenia and the Ministry of Finance unexpectedly announced that the transfer was to be com-pleted in one large asset turnover. Both BAMC and the failing banks, however, would be unable to handle this abrupt transfer. Something had to happen, and it had to happen fast. Extremely intense months followed, during which new contracts had to be drafted and negotiated with the banks.

In the end, the assets were transferred at the sched-uled time, and Slovenia’s two largest banks were success-fully rehabilitated. The third systemic bank will transfer its assets in Q3 2014. In parallel to the transfer, the necessary organisational processes and infrastructure have been put in place. To date, approximately 60 top-tier employees have been hired, and intense financial restructuring and opera-tional improvement activities for some of the largest com-panies in Slovenia are now taking place.

As trust waned and the economy contracted, the Slovenian banks reeled under the weight of non-performing loans, which reached a staggering amount of +20% of the total loans.


BANK ASSET MANAGEMENT COMPANY

SAVING SLOVENIA’S BANKING SYSTEM

S L A B AB A N K A

SETBACKS AND SUCCESSES:THE TRANSFER BEGINS

36

DONG Energy, the largest energy company in Denmark, needed capital. The utility incumbent made an operating loss of DKK 6 billion in 2012, after having invested billions to consolidate its position as a renewable energy leader.

Help came in the form of a DKK 11 billion capital raise from equity investments made by Goldman Sachs and Denmark ’s two largest pension funds,

ATP and PFA. The deal reduced the Danish State’s owner-ship from 81% to 60% and was agreed upon after a “very detailed due diligence process where every stone [was] turned here at the company”, said Henrik Poulsen, CEO of DONG Energy.

Goldman Sachs’ investment equals an ownership share of 19%, with ATP and PFA owning 4.9% and 1.8%, respectively. The remaining share is held by minority shareholders from a range of regional utility companies in Denmark. The capital raise was part of the energy giant’s financial action plan announced in the beginning of 2013.

Goldman Sachs became the target of popular protest in Denmark after it was made public in December that the investment bank was to receive some veto rights in the shareholder agreements.


GOLDMAN SACHS/DONG ENERGY

WHEN A CAPITAL INJECTION CAUSES HEATED PUBLIC DEBATE

P R I VAT E C A P I TA L ,P U B L I C C O N T R O V E R S Y

The public protests in relation to the deal caught the attention of international business media. The Financial Times, Bloomberg, the Economist, the New York Times and many more all reported how the deal almost brought down the government.


In an interview with Bloomberg, Henrik Poulsen said that “DONG Energy has exciting and profitable growth oppor-tunities. With the equity injection, we’ve almost accom-plished our financial action plan and have thereby created the necessary foundation to follow our strategic ambitions in the coming years”.

Goldman Sachs became the target of public protest in Denmark after it was revealed in December 2013 that the terms of the shareholder agreements gave the Wall Street bank veto rights over several major decisions. This led to a long, politically-laden debate about the appropriateness of the centre-left government’s decision to sell such a large share to an investment bank that for many represents right-wing ideology.

The public protests in relation to the deal caught the atten-tion of international business media. The Financial Times, Bloomberg, the Economist, the New York Times and many more all reported how the deal almost brought down the government. The Financial Times put the deal under scrutiny by looking at five issues:

AN OUTSIDE VIEW OF THE “AFFAIR”

Why sell in the first place?

Like many European utilities, DONG Energy has suffered from the financial crisis. With an operating loss of DKK 6 billion, a financial hole needed to be filled. The Danish government decided to seek new capital, thus reducing its stake in the company.

Was Goldman Sachs the highest bidder?

During the week when parliamentary hearings were to be held, the Danish television station TV2 reported that PensionDanmark gave a higher bid than Goldman Sachs, spurring even more controversy around the deal. However, the conditions accompanying the bid were different, mak-ing it more akin to a loan, according to government of-ficials.

How big a risk is Goldman Sachs taking?

Another point of controversy was that some claimed that Goldman Sachs didn’t take a risk equalling their advan-tages. If DONG Energy isn’t listed on the stock market as planned by 2018, Goldman Sachs can sell 60% of the shares back to the Danish government at the purchase price plus an annual interest rate.

Goldman Sachs’ veto rights

Goldman Sachs has negotiated certain veto rights that none of the other investors get. The Danish government re-plies that this isn’t unusual when investors take a big stake in an unlisted company.

Role of tax havens

Given the high tax rates in the Nordic countries, it has be-come a sensitive issue that the investment will be managed by New Energy Investment, a Luxembourg-based affiliate owned by shareholders in the Cayman Islands and Dela-ware. Goldman Sachs replies that it would be uncommon for an investor to set up an investment vehicle in Denmark because of one minority investment.

38

One of the most coveted honours in public sector consulting in Denmark is to be accepted into the Danish Ministry of

Finance’s frame agreement. Many of the most complex and interesting assignments in this area are tendered under this framework, and with Quartz+Co’s fairly new public sector focus, becoming qualified to bid on these pivotal projects has been an objective for years. In 2013, this dream became reality – a truly iconic moment for our public sector team.

One of the most coveted honours in public sector consulting in Denmark is to be accepted into the Danish Ministry of Finance’s frame agreement.

Our public sector work is part of a bigger picture and must hold up under scrutiny from the paublic eye.

Our place in the frame agreement has been the start-ing point of many interesting dialogues and intriguing projects. One of the most publicly discussed assignments was an analysis of a potential expansion of Udbetaling Danmark’s responsibilities. Like the DSB analysis two years before, this project was made publicly available in its entirety and thus ex-posed to public debate. This reinforced our belief that our public sector work is part of a bigger picture and must hold up under scrutiny from the public eye.

In the past few months, more exciting and highly prolific engagements have been added to Quartz+Co’s ros-ter of public sector projects, including analyses of pivotal parts of the Danish unemployment system; a review of the Danish experiences with public-private collaboration and several others. Each of them has confirmed that we, with our brand of consulting, have a role to play at the round table.

PUBLIC SECTOR WORK

TAKING PART IN THE LARGER CONVERSATION

E A R N I N G O U R P L A C E ATT H E R O U N D TA B L E


Danish productivity has risen on average 0.8% a year since 1996,

while the number for Sweden is 2%

2.2 million Danes received government benefits in 2013.

In 1970, that number was 800,000

39Connect to the world

CHAPTER FOUR

C O N N E C T T O T H E W O R L D

A globe of concentric circles formed by 800 grams of iron filings and a Ø 140 mm ferrite ring magnet.

40 Connect to the world

CHAPTER FOUR

CONNECT TO THE WORLD


“All I know is that it will have been one hell of a ride”. Such was the response of a young consultant when asked the question “where will you be in the year 2020?” during an internal discussion on the topic of internationalisation.

This response is fairly representative of the sentiment that rests with most members of the Quartz+Co civilisation – changes will happen, new territories will be conquered, but exactly which, when and how remains unknown.

Quartz+Co was founded in 2002, with a relentless desire to attune to the constantly changing industry dy-namics that characterise the globalised world of business, praising “originality” and the ability to act independently

without conforming to regular patterns or estab-lished rules. This year has

produced several developments that adhere to our founding principles of tapping into global growth centres and staying relevant to our increasingly global core clients in untradi-tional ways.

Just to name a few: We acquired a majority stake in MEC Intelligence, a research company located in New Delhi, India, which currently employs more than 15 analysts and consultants. We took the tempera-ture of a group of Nordic business executives operat-ing in the US when conducting our yearly Barometer in collaboration with the Danish business daily Børsen, this time in New York City. We also launched a part-nership with Port Jackson Partners in Sydney, one of Australia’s most well-respected strategy consulting firms. And through the “Sleeves Up” programme, a team of our consultants – together with students from Norway and Sweden and managerial talents from Novo Nordisk, Grundfos, TDC and Bech-Bruun – jetted off to South Africa to help entrepreneurs in Cape Town grow their businesses.

It’s often claimed that a true civilisation should constantly be modelled and shaped by the people in it and the world around it. It should connect to the world. We heartily agree.


WHERE DO WE GO FROM HERE?

K E E P O NC O N N E C T I N G

At the 2013 company day, the Quartz+Co civilisation gathered to discuss the direction of the company and our vision for growth. Everyone was asked to illustrate their

idea of where we would be in 2020. The results were both funny and inspiring and took the form of comic

strips, poems, videos, letters and everything in between.

“All I know is that it will have been one hell of a ride”

42 Connect to the world

In 2013, Quartz+Co became the majority owner of MEC Intelligence, a market research company support-ing growth by providing high-quality actionable insights within the maritime, energy and cleantech sectors, as well as regional insights across various industries, from its of-fices in India, China and Denmark. Sidharth Jain, the Managing Director and co-founder of MEC Intelligence, laid the cornerstone in 2011 with the vision of a global, best-in-class company serving C-suit members and recog-nised both for its expertise and its people.

Quartz+Co and MEC Intelligence have worked closely together to exploit the natural synergies between the two companies in terms of combining top-tier prob-lem solving and highly specialised industry knowledge. It has also been a grand opportunity to learn from one another; MEC Intelligence has helped Quartz+Co in understanding how to tap into the huge growth poten-tial of the emerging markets and expanding the knowledge base in energy and maritime areas. Quartz+Co, in turn, has been instrumental in helping MEC Intelligence develop its Nordic client base and building a highly

differentiated and en-trepreneurial culture with progressive train-ing processes and career development opportu-nities.

The fast-paced development within the maritime, energy and cleantech industries puts significant pressure on business leaders to stay informed about markets and technology.

According to Sidharth, MEC Intelligence’s peo-ple-centric culture is what makes it stand out from other India-based companies. “Our biggest differentiator lies in our mindset towards people”, he says. “Despite its young age, MEC Intelligence already attracts excel-lent people from lead-ing global consulting firms because we offer intriguing and complex assignments and pro-vide innovative policies and employee development pro-grammes”. However, professional development isn’t lim-ited to those working at MEC Intelligence: “we routinely hear from job candidates that it was the best professional interview they had ever attended, even if they were not of-fered a contract”, Sidharth reports.

The Managing Director of MEC Intelligence is very optimistic about the future. The fast-paced development within the maritime, energy and cleantech industries puts significant pressure on business leaders to stay informed about markets and technology. “Our focus areas and part-nership with Quartz+Co have provided an opportunity to create a market-leading knowledge hub. So far, the part-nership has succeeded beyond our expectations both in terms of billings and the rapid expansion of the firm”, Sidharth concludes.

Despite its young age, MEC Intelligence already attracts excellent people from leading global consulting firms.

SIDHARTH JAIN

Managing Director, MEC IntelligenceSidharth has worked with strategy, business development, investment and innovation cases for both corporates and PE firms. He has exten-sive experience from evaluating opportunities in the maritime, energy and cleantech sectors across markets globally. Prior to founding MEC Intelligence, Sidharth was a manager at Evalueserve where he was re-sponsible for executing the first strategy consultancy desk and leading the development of many successful strategic desks. He also built up the maritime practice and drove cleantech research.

PARTNERSHIP WITH MEC INTELLIGENCE

EXPLOITING SYNERGIES IN MARITIME, ENERGY AND CLEANTECH

G R E AT E R T H A NT H E S U M O F I T S PA R T S


1 LNG AS PROPULSION FUEL

A DISRUPTION TO THE MARITIME INDUSTRY?

According to a forecast by MEC Intelligence, nearly 10,000 vessels are expected to adopt liquefied natural gas (LNG) propulsion systems by 2020, triggering huge growth in the market. Companies from all parts of the maritime value chain – oil majors, terminals, ports, bunker suppliers, ser-vice companies, component producers, vessel owners and charterers – need to rethink their offerings. MEC Intelli-gence’s report on LNG propulsion cuts through the scepti-cism and complexity surrounding the adoption of LNG as the preferred fuel in the shipping industry.

2 OFFSHORE WIND FOUNDATIONS REPORT

Huge demand, scalable technology and high innovation activity along with supply constraints make offshore wind foundations a highly attractive market. MEC Intelligence forecasts that the total global installed capacity of offshore wind will grow from approximately 3 GW in 2010 to 125 GW in 2020. This rapid development is driven by increas-ing momentum in the European market and a surge in in-stalled capacity in Asia. The need for turbine installation in deep sea areas will create a demand for turbine foundations, and it’s expected that the value of the offshore wind foun-dation market will reach USD 20 billion by 2020, up from USD 700 million in 2010.

3 OFFSHORE WIND CABLES INSIGHTS

Offshore cables are a significant challenge for the wind industry. High costs, supply shortages and an underdevel-oped supply chain hinder the progress of offshore wind. MEC Intelligence has published a report on the status of the key industry developments and innovations that will shape the future of the offshore wind industry. The report is available by request to [email protected].

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MEC Intelligence looks at growing markets, emerging concepts and evolving

trends to identify, define and detail growth opportunities in the maritime, energy and cleantech industries. Discover and

evaluate the findings in MEC Intelligence’s latest publications.

EXTRASmecintelligence.com

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44

NEW PARTNERS IN QUARTZ+CO

SEARCHING FOR NEXT PRACTICE CONSULTING

L I K E W I L LT O L I K E

We have welcomed six new senior partners into our civili-sation over the past year. Their expertise ranges from strat-egy to procurement, from the financial sector to transport, from private equity to private ownership. But they have one thing in common: they have been looking for a new plat-form from which to serve their clients, one that resonates with their personal beliefs and views on consulting as well as with the needs of today’s capable organisations. Learn what these experienced consultants view as Next Practice within management consulting.

In the case of Per Segerberg, involvement is the Al-pha and Omega of management consulting. “In operations,

the era of generalised management consulting is over. You need to be a trusted advisor and guide the client through the entire process. This means transferring know-how and functional expertise to the client’s organisation and mobi-lising the organisation’s problem-solving capacity”. Jerker Rosander continues, “Above all else, the understanding of the client’s culture and context is a fundamental prerequi-site to help them succeed: an engagement model that allows for long-lasting projects and deep involvement is necessary for making a lasting impact”. One of his primary credos is to foster people centrism and a collaborative approach. For an organisation to change, people need to change.

“We have a genuine interest in the success of our clients and the individuals we work with – we look for the person in the client, not the client in the person”

—JERKER ROSANDER

Connect to the world

JOHAN LEMCHEN

Financial services, insurance, organisational design, outsourcing+20 years of consulting experience from Occam Associates, A. T. Kearney and Andersen Consulting

JERKER ROSANDER

Transport, energy15 years of consulting experience from McKinsey & Co.

JESPER KJERSIDE

Financial services, private equity, transport11 years of consulting experience from McKinsey & Co. and BCG; started as a lawyer at Kromann Reumert and also had a short stint in investment banking

“Honesty requires that you speak the truth, even when it isn’t in your own best interest. Building mutual trust that allows you to speak your mind is the essence of a good relationship and of being a trusted advisor”

—JOHAN LEMCHEN

45

According to Torbjörn Månsson, another important aspect of Next Practice management consulting is to stay on the offensive: “In my view, good management consult-ants should strive to adopt a challenger mindset and aspire to over-deliver on every assignment. We must bring fresh perspectives and respectfully challenge the status quo. Clients don’t bring on consultants to maintain the status quo”, Torbjörn remarks. “It’s crucial to be capable of cul-tivating a multitude of problem-solving approaches and use the complementarity of personalities and skills as an instrument of leverage”. One thing that really counts for Johan Lemchen is an aspiration to build a top-tier con-sulting company based on Nordic values, which for Johan include respect, humbleness and flexibility. “Clients don’t look for buzzwords and standardised solutions. The values, which I have the audacity to label Nordic, resonate well with my deep-held beliefs about how you should approach clients and problem solving”, he says. “We live in an in-creasingly global and transparent world, which makes the ability to execute a strategy as important as the strategy

itself. I believe that not only defining strategy but also supporting companies in the roll-out will play an increas-ingly important role. Too many strategies don’t create the intended value”.

For Jesper Kjerside, flexibility is key when engaging with clients. “A Next Practice engagement model must constantly reconfigure to match the client situation. The traditional, one-size-fits-all consulting model isn’t for me. I believe the “shelf of products” model is obsolete and that consultants must know how to constantly adapt to their clients and the context. Consultants should perfect their listening skills and not expect clients to adapt to their ways of working”, Jesper explains. From Johan Reiersen’s per-spective, spending more time with his clients is important: “The heavy involvement of senior partners in client work is an element in Next Practice. Implementation should be on the agenda from day one. Next Practice consultants, wheth-er partners or not, should have a personal desire to be part of both the problem solving and the project roll-out – in order to deliver success and not only deliver successfully”.

“Clients don’t want just advice any more – they don’t want you to tell them how to save 100 million. They want you to tell them how to save 100 million, help them realise the savings and build an organisation that has the capability to sustain those savings. They want the whole ‘transformation journey’”—PER SEGERBERG

“It doesn’t help much to correct the problem if you don’t correct it in a way that fits the client’s organisation”

—JOHAN REIERSEN

PER SEGERBERG

Supply chain strategy, operations management, sourcing and procurement+25 years of consulting experience from Segerberg & Company, Accenture, SIAR-Bossard and Cresentia

JOHAN REIERSEN

Financial services, procurement, multi-channel management and steering systems+15 years of consulting experience from McKinsey & Co.

TORBJÖRN MÅNSSON

Private equity, financial services, consumer and industrial goods, performance improvement+20 years of consulting experience from Bain & Co., SIAR-Bossard and McKinsey & Co.


46

QUARTZ+CO RECRUITMENT CAMP

NEW RECRUITMENT CONCEPT

T H E N E X T G E N E R AT I O NO F D O G - B I T E R S

At Quartz+Co, we don’t believe in stand-ard industry solutions or methodologies. We believe in innovative

processes, in (wo)men biting dogs, and we believe that be-ing different starts with our own civilisation. That is why we have ditched the traditional recruitment model for graduates and designed a new hiring experience to better reflect Quartz+Co’s value proposition and create iconic moments from day one. Eschewing the three-round, three-week industry norm, selected candidates are now invited to a two-day recruitment camp, where it’s just as important for the applicants to get to know us, as for us to get to know them. “The traditional recruitment model is a one-to-one dialogue – I would even claim it’s a one-way dialogue. What we try to accomplish with the recruitment camp is to make the hiring process a two-way street”, explains Hans Henrik Beck, Founding Partner at Quartz+Co.

Six tired master’s students wash down anxious chat-ter with cold ale while they await feedback on their per-formance and – hopefully – a job offer. They have just completed an intensive interview programme that not only includes traditional elements such as quantitative tests and case interviews, but also new activities such as a group case and an MBTI assessment, among others. “Consulting isn’t only about being bright and clever – it’s also about hav-ing the right personality, and that is what we are assessing during the recruitment camp”, says Dorte Brehmer, Head of Staff at Quartz+Co. This focus on relationships is key in Quartz+Co. “We believe in relationships – our small civilisation is a dynamic concept shaped by the people in it, not a mould people must conform to”, explains Hans Henrik Beck.

We have ditched the traditional recruitment model for graduates and designed a new hiring experience to better reflect Quartz+Co’s value proposition and create iconic moments from day one.

According to Filip Andersson, who attended our camp in Stockholm, you can safely assume that your CV is good enough if you are invited to the camp. What is left is to show your personality, and to demonstrate your ability to work in a group, as well as your analytical and problem-solving skills.

1. Think about how you want to interact with the rest of the group – both in group interviews and under less formal circumstances (especially if you are not used to this as-sessment format). I would say that the recruitment camp is more about this than about sweating outside an in-terview room trying to remember all the frameworks in Case in Point.

2. Practise problem solving in a structured way (preferably without clinging too much to specific learnt-by-heart frameworks). Make sure you are familiar with the most common types of cases.

3. Practise some quick calculations without a calculator (it’s usually fine to use pen and paper though).

TIPS FROM A FRESH RECRUIT


Watch a video about what it’s like working as a consultant and get advice on how to prepare

for Quartz+Co’s recruitment camp.

EXTRASopposition.quartzco.com/recruitment

Quartz+Co has held eight recruitment camps in Denmark and Sweden, and Norway will join the ranks with their first camp in the autumn of 2014.


At Quartz+Co we pride ourselves on being a Nordic origi-nal – that is, a management consulting company based on Nordic values, capable of combining Nordic presence with global reach. This includes supporting our clients wherever in the world they operate and attracting the best interna-tional talent. But how does our management philosophy hold up outside of Scandinavia? We decided to ask some of our non-Scandinavian colleagues about their experiences with working in a Nordic context.

According to Yuran Chen, one of the best things about working in a Nordic country is the team spirit. “In a Chinese company, you’re always in competition with your colleagues, which can make work life seem tough. Often-times you keep a relationship because you have to, not be-cause you really like the person – it can be a bit superfi-cial”, she says. The thing Yuran finds most difficult about working in Scandinavia is the names. “The pronunciation is really difficult for me. Sometimes in conversation, some-one will mention a colleague, and I think, ‘I don’t know this person’, but it turns out that I just didn’t recognise the name from the way it was pronounced”, she laughs.

When Rahul Vasantlal Shah came to Scandinavia, he immediately noticed differences in the Nordic way of doing business. “There is a big focus on sustainable growth, and

Quartz+Co is a good example of this. We’re hiring a lot of people

CULTURAL OBSERVATIONS FROM OUR INTERNATIONAL COLLEAGUES

WORKING IN THE NORDICS

S C A N D I N AV I A N S A R EO B S E S S E D W I T H

H I P S T E R M O M E N T S

right now, but there is a lot of discussion on how to manage it. It’s not just ‘let’s increase the numbers’ – it’s also ‘how do we balance it and how do we sustain it’”.

What surprised Michaela Bublitz from Germany most about Scandinavian work culture was the flat hier-archies. “I really enjoy that nobody cares about your posi-tion in the company. They have a genuine interest in you and in having a conversation. It’s really quite unique”, she says. “The mindset is that everyone has something to con-tribute”. When asked about what it’s like working with Scandinavians, Michaela has made some funny observa-tions: “Scandinavians are obsessed with creating a ‘hipster moment’ – they always seem to be ‘constructing coolness’. But it works. Scandinavians are just a little cooler than everyone else, and you wish you could be as cool”. We are grateful to Michaela for attaching that adjective to things other than our weather.

“In a Chinese company, you’re always in competition with your colleagues, which can make work life seem tough”

—YURAN CHEN

“I really enjoy that nobody cares about your position in the company. They have a genuine interest in you and in having a conversation. It’s really quite unique”

—MICHAELA BUBLITZ

Yuran Chen, China

Rahul Vasantlal Shah, India

Michaela Bublitz, Germany

48




QUARTZ+CO BAROMETER 2013

NORDIC BUSINESSES IN THE US

T H E U S I S O N LY F O RT H E T O U G H E S T WA R R I O R S

Too many Danish companies go half-heartedly into the US, resulting in less than spectacular performances despite the huge market potential. So, why aren’t more Danish companies getting the US market right? Quartz+Co and the Danish business daily Børsen invited 10 top executives from ArjoHuntleigh, Arla, Bjarke Ingels Group, COWI, Fritz Hansen, Leman, Oticon, ReD Associates, Vertic and the Danish General Consulate in New York to participate in a panel debate on what it takes to achieve success in the world’s largest market.

It did not take long for participants in the Quartz+Co Barometer to reach consensus on the formula for achieving success in the US market: a big commitment and willing-ness to invest, focus on excellent customer service and re-taining the right local talent. The panel was also in agree-ment on why this formula isn’t being seen in practice: lack of courage and backing from home is the main challenge for Danish companies seeking to carve out their piece of the American pie. “In the US, the expected level of customer

service is so high that it requires both dedi-cated resources from the home office and talented, local employ-ees”, says Susie Hjort,

Director for Arla’s ingredients business in North America. It’s not enough to set up an office in the US; you must go all in with the unwavering belief that you can become a heavy hitter. Hesitation is picked up on quickly, especially by ambitious, career-minded and talented employees.

“Our mistake was that we for too long wanted to be Danes in the US, and we thought for too long that we could handle the US market on our own. That meant that we didn’t get the right talents in”, says Sebastian Jespersen, CEO of Vertic.

However, convincing top management and the board to place all bets on the US can be a challenge. Danish or-ganisational culture can be a barrier as leadership teams of-ten prefer cautious entry strategies, instead of larger, more aggressive investments. This approach, however, will not work in “the country of opportunity”. Success in the US doesn’t come without sacrifice and few companies are dar-ing enough to run the risk. Perhaps the best advice comes from the Americans themselves: go big or go home.

It’s not enough to set up an office in the US; you must go all in with the unwavering belief that you can become a heavy hitter.

ADVICE FROM THE TOP EXECUTIVES

“Don’t fool yourself into thinking that the same strategy which brought you successfully into a European market will

also bring you successfully into the American market” ALEX MYERS, CEO, HILDING ANDERS GROUP,

FORMER CEO OF ARJOHUNTLEIGH

“Secure the home office’s respect through good execution and make sure to get the necessary degree of freedom”

RASMUS BØRSTING, EXECUTIVE DIRECTOR, OTICON

“Make an overview of how much liquidity is necessary to establish yourself in the US, multiply it by three and then

you’ll have a realistic budget” SHEELA MAINI SØGAARD, CEO AND PARTNER,

BJARKE INGELS GROUP

49What keeps energy leaders awake at night?

CHAPTER FIVE



Interlocking abstract forms produced by 900 grams of iron filings, energised by a Ø 50 mm ferrite disc magnet and a Ø 30 mm ferrite rod magnet.

50 What keeps energy leaders awake at night?

CHAPTER FIVE

WHAT KEEPSENERGY

LEADERS AWAKEAT NIGHT?


Throughout 2013, Quartz+Co was involved in a myriad of projects – both horizontally across energy sectors and verti-cally within energy supply chains. Our assignments ran the gamut, from assessing the future potential of oil and gas on the Danish North Sea shelf to evaluating regulatory re-gimes in the Nordic DSO sector and developing strategies for the offshore wind industry – not to mention analysing pan-European consumer prices and designing new entry strategies and concepts with regard to the cleantech sector.

This selection of the past year’s engagements not only underlines our commitment to building a strong support platform to the energy sector, but also demonstrates the complexity of the energy landscape.

Looking out over our own backyard, we see several important questions that need to be addressed in the com-ing years, which represent both opportunities and obstacles for economic and societal growth. It’s on these key issues that Quartz+Co strives to deliver successful solutions to our current and future clients and acts as a trustworthy

liaison between govern-ment bodies, utilities and supply chain players.

The past year’s engagements not only underline our commitment to building a strong support platform to the energy sector, but also demonstrate the complexity of the energy landscape.

QUARTZ+CO ENERGY SECTOR PERSPECTIVE

INSIGHTS FROM OUR OWN BACKYARD

T O U G H Q U E S T I O N S F O R E N E R G Y E L I T E S

KEY QUESTIONSfor the energy sector

How will the cash-constrained Northern European utilities develop in the coming years – that is, what

business models, cash-oriented partnerships and consolidations can be expected, securing the necessary

and vital investments?

How can the energy sector deliver cost-effective security of supply, balancing the dominant role of intermittent

renewable production and need for thermal retrofit investments in the near future?

How should the future DSO sector be structured to ensure grid investments (i.e. smart grids) with

acceptable returns without introducing unfavourable consumer prices?

How can the oil and gas production in the North Sea be prolonged to both maintain a high degree of

self-sufficiency and to ensure a sustainable transition to a fossil fuel free society?

WHAT KEEPSENERGY

LEADERS AWAKEAT NIGHT?


THE NORWEGIAN ELECTRICITY MARKET

UNLOCKING THE POWER OF THE ELECTRICAL GRID

E N D T O T H EG R I D L O C K

Even though 15 years have passed since the deregulation of the electricity market, the Norwegian power industry is still fragmented and dominated by municipality owner-ship. Significant economies of scale can be realised through consolidating electrical grids in adjacent geographic areas; however, due to disincentives such as insufficient financial gains from the regulatory income model and the compli-cations arising from grid companies’ integration with re-gional utility companies, consolidation hasn’t been on the negotiating table for a decade.

This picture is now changing, with several fac-tors pointing towards a new era for the power industry in Norway. First, the Norwegian government has expressed a strong desire to consolidate, and is exploring possible strategies. A recently published report has recommended increased segregation of grid company tasks in utilities and

a simplification of the grid structure. Second, the argument for utility ownership of grid com-panies is weakening due to the introduction of the supplier-centric model, which means that utilities no longer can use grid companies as brand builders. Third, grid companies have ceased to be cash cows for utility companies – in the coming years, significant cash flows will be needed to up-grade ageing grids. In addition, power prices are expected to remain low, putting pressure on the profits of the util-ity companies, and in turn reducing financial returns for municipalities. As consolidation takes off, national and international financial players will be eager to participate, making economies of scale possible and generating a stable, attractive, long-term return on capital.

As consolidation takes off, national and international financial players will be eager to participate, making economies of scale possible and generating a stable, attractive, long-term return on capital.

FROM INTEGRATED VALUE CHAIN TO UNBUNDLED INDUSTRY

INDUSTRY STRUCTURE OF TODAY INDUSTRY STRUCTURE IN 10 YEARS?

Company activity type split 2012, based on the revenues of the 70 largest Norwegian energy companies

Future companyactivity type split (estimated)

PRODUCTION

SALES

GRID

PRODUCTION

SALESGRID

Today, the operations of most Norwegian energy companies are focused on electricity generation, distribution and sales. In the future, increased specialisation is expected, although a core of these integrated companies will continue to exist.


For wind energy to really claim its position in the global energy mix, the Cost of Energy (CoE) must drop to a level at which wind can compete with other cheaper energy sources such as nuclear power. Onshore wind has managed to lower CoE to a somewhat attractive level – yet, this isn’t enough. The main challenge, however, comes in the form of offshore wind, where CoE has been on an upward tra-jectory. This is understandable given the immaturity of the industry, but offshore wind must lower costs by almost 50% to compete with nuclear energy. This isn’t accomplished through minor changes, but by fundamentally re-thinking the industry’s approach to offshore wind.

We believe that the wind industry has a bright future ahead of it, but CoE must be lowered substantially in order to win the support of policymakers and the public, which will fuel demand and increase investments. It’s the respon-

sibility of the major stakeholders in both the US and Europe to take the lead in organ-ising the wind industry to make wind the most clean and cost-competi-tive energy source in the global energy mix.

Offshore wind must lower costs by almost 50% to compete with nuclear energy. This isn’t accomplished through minor changes, but by fundamentally re-thinking the industry’s approach to offshore wind.

Industrial standardisation of installation components and processes will significantly lower the industry’s marginal costs. Producing larger batches will create a learning curve effect and enable cost-efficient installation processes and O&M activities.

It’s important to embrace the complexity of offshore wind and treat offshore as off shore, instead of trying to transfer experiences from onshore wind parks to the sea. Creating wind parks that are specifically designed for the oceanic environment is crucial to maximising the potential of the vast wind resources at sea.

Encouraging industry-wide co-operation through the wind co-operation end-to-end (E2E) model is crucial. This model involves changing the way the industry shares information and is based on the concepts of an E2E and open-book mindset. Knowledge sharing and investing in skilled human capital is necessary for utilities and manu-facturers to realise cost savings and add to the shared profit pool.

REDUCING THE COST OF ENERGY

BRIGHT FUTURE FOR OFFSHORE WIND ENERGY

T R E AT O F F S H O R EA S O F F S H O R E

HOW TO LEVERAGE OFFSHORE WIND TO LOWER COE

SOLAR OFFSHOREWIND

COAL BIOMASSDEDICATED

ONSHOREWIND

NUCLEAR GAS (CCGT)

0

50

100

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200

250

300

208

150 144-150

114-128

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145-165

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UK PROJECTS STARTING IN 2012/EUR PER MWH

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China’s rapid expansion within offshore wind represents an opening for the offshore wind sector to move from being a North European niche to becoming a global industry, apt for growth. European companies should be ready to take advantage of the experience and the capabilities acquired from building up the industry.

Expectations for growth in the offshore wind in-dustry, historically concentrated in Northern Europe and around the North Sea, far exceed anything ever experi-enced before in the cleantech sector. But the industry must anticipate a major shift in its centre of gravity. According to Quartz+Co’s report Wind in China, the emerging Chinese market is essential in ensuring continued, international growth within offshore wind – a development that should be welcomed by all players in the industry. It is, however, a race against time as the enormous investments and gov-ernmental subsidies to fuel growth are pressured by the re-percussions of the financial crisis and competing sources of energy as well as significant supply risks.

Offshore wind in China is only in the beginning of the life cycle. China will be dedicated to meeting their am-bitious targets and offering paths to future growth for do-

The development towards de-risking and lowering CoE in the Chinese off-shore wind sector can be accelerated by introducing European technologies and capabilities.

REPORT BY QUARTZ+CO

OFFSHORE WIND IN CHINA

S H I F T I N G R AV I T YW I T H I N O F F S H O R E W I N D

mestic players. But the development towards de-risking and lower-ing CoE in the Chinese offshore wind sector can be accelerated by introducing European technologies and capabilities. So whether you’re a utility player, a supply chain player or an investor in the European offshore wind sector, we’re convinced that you will be challenged by this question; how can you exploit business opportunities in the Chinese offshore wind sector?

Read the full report that offers a snapshot of the Chinese offshore wind industry as well as

a high-level assessment of the maturity level of the different categories in the value chain.



How do you plan for a future with major uncertainties in the factors affecting your demand – in this case, potential technological shifts, political willingness to subsidise the offshore wind sector and the tendency towards larger and more complex projects?

For Bladt Industries, the solution was a strategic base case analysing the development path that Bladt Industries would follow if technology, political support and projects developed as expected, combined with an outline of dif-ferent market scenarios and the “trigger points” that would initiate these scenarios. For each scenario, Bladt Industries developed a preferred response regarding investments in production capacity and strategic focus. This mapping ex-

ercise facilitated man-agement discussions of the implications of each scenario, which alterna-tive that would gener-ate the most value for the company and what Bladt Industries could do to drive the market in the desired direction.

The scenario-driven strategy process has increased strategic transparency between the management team, the board of directors and the owner, and it has enabled Bladt Industries not only to stay a step ahead of the competition, but also to be prepared to act fast if external circumstances change.

The scenario-driven strategy process has increased strategic transparency between the management team, the board of directors and the owner, and it has enabled Bladt Industries not only to stay a step ahead of the competition, but also to be prepared to act fast if external circumstances change. The identified trigger points are being monitored closely and their respective scenarios have been mapped out to an extent where the management team, the board of directors and the owner are aligned on what actions to initiate and why, as well as what outcome to expect.

The most significant outcome of the process was Bladt Industries’ decision to set up a new production site at Lindø Industripark in order to begin serial production of jacket foundations for offshore wind, as this is the technology that appears most likely to replace the current monopile foun-dations as offshore wind projects move into deeper waters. By being the first in the industry to adopt serial production of jacket structures, Bladt Industries has mitigated both the risk of technology disruption and the risk of competitors acquiring the attractive production site at Lindø. Today, Bladt Industries is a key player – some would say the mar-ket leader – in offshore wind foundations and substations. The strategy process helped Bladt Industries secure a strong and robust platform for pursuing opportunities outside Europe – and as a proof of this, the first major project in the US has been confirmed.

BLADT INDUSTRIES

STRATEGY IN A TURBULENT AND IMMATURE INDUSTRY

C L E A R S T R AT E G I E SF O R A C L O U DY F U T U R E

56

The trade association Oil Gas Denmark commissioned Quartz+Co to conduct a sector analysis based on the cur-rent situation of the oil and gas industry and its potential for future development and social impact. The resulting re-port, The potential of the North Sea – realisation through three growth engines, released in October 2013, made an important discovery: despite the maturity of the shelf, there are still 1,400 million barrels of oil under the Danish sec-tor of the North Sea, which represents more than 40% of the total production of oil and gas in Denmark since 1972. However, the report also uncovered significant obstacles to exploiting the remaining subsea oil reserves. Exploration is at its lowest since the 1960s, the development of marginal

fields has stagnated, and the recovery rate is increasing by just over half of what it did in previous years.

Despite the maturity of the shelf, there are still 1,400 million barrels of oil under the Danish sector of the North Sea, which represents more than 40% of the total production of oil and gas in Denmark since 1972.

Unlocking the potential of the North Sea will require collaborative efforts within the industry and between the public and the private sector. New investments are needed, and time is of the essence as production is on the verge of being phased out. Cost reduction through operator col-laboration, adjustment of the current regulatory framework and the establishment of a revised tax regime for new pro-jects taking into account the maturity of the Danish shelf are main areas where growth can be created.

OIL GAS DENMARK

THE POTENTIAL OF THE NORTH SEA

F U E L L I N G T H EG R O W T H E N G I N E S

What keeps energy leaders awake at night?

Read the full Quartz+Co report — The potential of the North Sea:

realisation through three growth engines.


THE DANISH SHELF HOLDS A RESOURCE

POTENTIAL EQUIVALENT TO 1,398 MMBOE

0

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2013

90 089896 0092 0494 10888684828078767472

Technological resources

Exploration resources

Contingent resources

Gas production

Oil production

57Moving forward, looking back

CHAPTER SIX

M O V I N GF O R W A R D ,

L O O K I N G B A C K

750 grams of iron filings exploding into a firework of organic shapes under the force of a Ø 50 mm ferrite disc magnet and a 70x30 mm ferrite block magnet.

58 Moving forward, looking back

We continuously celebrate iconic moments; the everlasting images which people within and outside of Quartz+Co mention when asked to describe the company. Here, we present you with a few snapshots that have made an impression lately.

1

2

4

3

59

CREATIVE AND DYNAMIC WORK ENVIRONMENT

RESPECT FORITS PEOPLE

ATTRACTIVEPRODUCTS

CLIENTINTERACTION

LEADERS WHOWILL SUPPORT

MY DEVELOPMENT

FASTGROWING/

ENTREPRENURIAL

AREAS OF ASSOCIATIONS WHERE

QUARTZ+CO SCORES HIGHER THAN OUR

COMPETITIORS ACROSS SCANDINAVIA

Quartz+CoCompetitors

1 QUARTZ+CO WOMEN LEADERSHIP NETWORK

Quartz+Co’s ambition is to change the management con-sulting industry from within, also when it comes to the share of female consultants. Therefore, we have started the Quartz+Co Women Leadership initiative, an internal net-work which aims to strengthen female leadership in con-sulting. The group is a platform for promoting a culture of inclusiveness and flexibility, and provides a forum for debate in addition to sponsoring leadership training and inspirational events. For example, the former CEO of Tryg Group, Stine Bosse, held a presentation at our Copenha-gen office, where she let us in on her secret to reaching the top: balance, perseverance and having the courage to seize opportunities when they present themselves. Former Dan-ish Minister of Foreign Affairs and Minister for Justice, Lene Espersen, and her husband Danny Feltmann, CEO at Karmameju, also joined us for an evening to share their 10 principles on how to juggle family life and top positions.

2 SOCCER CHALLENGE 2013

They say once is a fluke, twice is a trend, but three times is a tradition. This year, we held our third annual Soccer Chal-lenge in Copenhagen where the usual contenders from top professional service firms were invited to a one-day soccer tournament. Also, in 2013 the Quartz+Co Soccer Chal-lenge went international as Stockholm held its first tourna-ment in August. The members of the Quartz+Co team in Stockholm were very impolite hosts and won the Swedish tournament. The results from the Danish tournament have mysteriously gone missing.

3 BUSINESS-FREE ZONES

At Quartz+Co, relationships mean more than just busi-ness. We see a human being in every client, rather than a client in every human being, and that’s why we put together events throughout the year where business isn’t on the agenda. In Stockholm, for example, Club Q+ rocked to the rhythms of Swedish pop comet Oskar Linnros. In Oslo, friends joined us in our garden oasis in the city for the buzz of good conversation and the fizz of champagne bubbles. And in Denmark, a group of our clients, colleagues and their families gathered at Tivoli for the second year in a row for the gardens’ annual Christmas musical and shopping at the famous Tivoli Christmas market.

Moving forward, looking back

I C O N I CM O M E N T S

4 CASE CRACKING

In November 2013, Quartz+Co held its first-ever case chal-lenge, in which nine teams of three students laboured in-tensely over the course of 24 hours to solve a real-life busi-ness case. Their challenge was to develop an omni-channel retail strategy for SPORTMASTER, Denmark’s largest sporting goods retailer. The students represented six top universities, eight countries and a wide range of academic backgrounds, including law, finance, strategy, mathemat-ics, physics and even nanotechnology. The winners made off with top-line sports and ski gear in addition to the brag-ging rights.

5 CLIMBING THE CHARTS

Quartz+Co continues the journey towards our audacious goal of creating the strongest employer brand in manage-ment consulting. On the Nordic ldeal Employer ranking we have taken yet another major leap forward to a position as number 33, and local rankings are improving as well. In Denmark, we have claimed our top-three position among management consulting companies for the second year in a row.

60 Moving forward, looking back

O N WA R D S

The photographs of magnetic particles on the cover and chapter pages of this report rep-resent our commitment

to opposition. The theory of magnetism centres on the con-cept of the dipole, an object that has two equal but oppo-site magnetic poles. If a magnet is cut in two, two magnets or dipoles are created out of one. Rather intriguing. And we find plenty of dipoles in the values and aspirations of Quartz+Co. Tackle & Solve on one side, and Engage & Mobilise on the other. Results on one side, Relationships

on the other. Capitalism on one side, Humanism on the other. Indeed, the Q on one side of the + and the C on the other.

However, we don’t see these opposite pairs as irreconcilable; on the contrary, we consider them prereq-uisites for each other. Much in the same way as we believe that the biggest questions in this world are best answered by insisting on keeping ambition and compassion in the same (mental and reflective) room. It will for us remain as meaningless not to make profit, as it is only to make profit.

These abstracts conclude the 2013 annual report from Quartz+Co. Thank you for reading. We hope you enjoyed the stories of companies who opposed the status quo and prevailed. For us, it was a fantastic year, which makes us very optimistic about the future. We remain committed to assisting companies and organisations who oppose, com-pete against, disagree with and counterbalance the status quo. We hope to have the privilege of stand-ing by your side in the months and years to come.

For us, it was a fantastic year, which makes us very optimistic about the future. We remain committed to assisting companies and organisations who oppose, compete against, disagree with and counterbalance the status quo.

We believe that the biggest questions are best answered by insisting on keeping ambition and compassion in the same (mental and reflective) room.

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