On balance a no lose gamble

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With its American production plans on halt Vestas may be exporting machines to the Americas for some time, but the company has just imported a very American motto for its new strategic plan. "The Will to Win" may sound like a motivational self-help title, but it signals the gloves are off in the battle for global wind. Vestas will be fighting the corner of shareholder value. Increased profitability is the number one priority, market share a distant third. Bigger is better only when it comes to profits. Investor relations will be a priority, a recognition that the financial markets are as important a constituency as the wind markets.

Indeed, new CEO Ditlev Engel sounds more like a shareholder than a manager. His status as a wind industry outsider represents a rare opportunity for him to help reshape Vestas, rising above any residual post-merger turf wars and baggage. From the sounds of it, namely "administrative double functions," the merger integration process still requires attention. Often an outsider can highlight the strengths as well as the weaknesses of a company -- Engel's increased focus on technology spending and development is important and fits with the targeted approach of premium technology and service for premium prices.

Engel appears to have surprised everyone with the launch of a strategic plan so early into his job. It was a bit daring, particularly given some of the plan's elements. He told everyone -- shareholders, customers and employees -- at the same time where Vestas will head. Shareholders liked what they heard. Vestas may enjoy a new honeymoon with the stock market. There is a potential danger of focusing too much time on investors, too much time communicating the vision, and not enough on counting the kroner. It can be easy to forget that investors just buy shares, not turbines. Meantime, though, more communication is welcome.

Customers will have to wait and see. A strong, competitive Vestas is good news for those looking beyond today. The spectre of higher prices is less welcome, unless it truly is coupled with superior, demonstrable value and service. The shelving of American turbine production needs to be considered, and perhaps better understood, in view of cost-effectively servicing that market.

The employees present the most critical battleground. A new incentive plan sounds good, as does a new, well-situated R&D centre. But all the "will" in the world won't make the Vestas plan work unless it can be implemented. Other than the financial results, the real test will be whether the plan and its champion become a unifying or polarising element within the company.

On balance it is a no-lose gamble for Vestas. If the Will to Win succeeds, its launch will be remembered as a turning point. If it does not, then at least they were the right words and the right objectives. If nothing else, a bold, shareholder-friendly way forward has been shown. It is up to the employees to make Vestas win.

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