Speaker 1: This is Bloomberg Business Week with Carol Masser from Bloomberg Radio.
Speaker 1: You're listening to Bloomberg Business Week Carol Masser along with
Speaker 1: Kaylee Lines on this Tuesday and Kayley. We continue this
Speaker 1: hour with looking at some of the stresses and situations
Speaker 1: facing leaders around the globe. Man, there's a lot coming
Speaker 1: at them, of course because of the virus and and
Speaker 1: also because you know, I think a lot of leaders
Speaker 1: are trying to create a much more equitable environment. And
Speaker 1: joining us to talk about that is Judy Marks, president
Speaker 1: CEO at Connecticut based Otis Worldwide, which you might recall
Speaker 1: was spun off from United Technologies back in April. They
Speaker 1: became another public company again, uh an SMP five company,
Speaker 1: and the stock has been on quite a ride since spring,
Speaker 1: and the company also reported earnings yesterday. Juddy joins us
Speaker 1: on the phone from Florida. Judy, it is so nice
Speaker 1: to have you here with Kaylee and myself. How are you, um,
Speaker 1: and talk to us about what your world has been
Speaker 1: like in the last six or seven months. There's been
Speaker 1: a lot going on for you guys. Yeah, it has
Speaker 1: been fascinating. Carol. Great to be with you and Kayley
Speaker 1: today and I we could have never imagined starting this
Speaker 1: journey in the middle of a global pandemic. But I've
Speaker 1: got to tell you, we are so excited to return
Speaker 1: to our roots as an independent, publicly traded company and
Speaker 1: our sixty nine colleagues, who are mainly essential workers keeping
Speaker 1: the world moving, maintaining obviously elevators and hospitals and infrastructures,
Speaker 1: and just as importantly in many residential buildings where people
Speaker 1: have been locked down but still need the use of
Speaker 1: their their elevators. Couldn't be more proud. A hundred years
Speaker 1: to the month we first listed on the New York
Speaker 1: Stock Exchange, we liveding in on April three. It's unbelievable,
Speaker 1: such an incredible historic company and we are we're moving
Speaker 1: into the future. We're excited. Well, you talk about how
Speaker 1: all of these places that needs your elevators, hospitals in
Speaker 1: the lake here where I am at Bloomberg World Headquarters
Speaker 1: in New York. When I come in in the morning,
Speaker 1: when I leave in the afternoon, I just get an elevator.
Speaker 1: I don't have to touch anything. They're running automatically so
Speaker 1: that they can reduce touch points. Can you give me
Speaker 1: some insight into what kind of touchless technology or procedures
Speaker 1: you've had to implement in your in your elevator systems
Speaker 1: because of this. Sure, let me answer that, and then
Speaker 1: let me take a step back and share with you
Speaker 1: a little bit about just our business model. But but
Speaker 1: innovation is core to who we are at Otis, and
Speaker 1: we had a lot of touchless um innovations and products available,
Speaker 1: but they have absolutely come to the forefront now because
Speaker 1: of COVID, and I'm really pleased with how agile and
Speaker 1: fast our team has been able to bring these to
Speaker 1: market throughout the globe. We have gesturing technology. We have
Speaker 1: the ability for for voice interaction where you say, hey, Otis,
Speaker 1: take me to floor five. We have the ability through
Speaker 1: an app on the iPhone are e Call app to
Speaker 1: be able to before you ever leave your office, call
Speaker 1: the elevator and so it will be there for you.
Speaker 1: We have traffic management and a dispatching system that's intelligent
Speaker 1: traffic flow that allows us only to put four people
Speaker 1: in an elevator to have them safely space. You know,
Speaker 1: our customers, these building managers are telling us that they
Speaker 1: want help, they want our guidance, they want our partnership,
Speaker 1: and it's just been an amazing uh seven months as
Speaker 1: we're all trying to return to what we believe will
Speaker 1: be the new normal. I don't think we're there yet,
Speaker 1: but we're a big part of becoming part of that.
Speaker 1: I mean, so that's really interesting, Judy. So the things
Speaker 1: that maybe are changing right now and you talk about
Speaker 1: the new normal, they're here to stay. In your view, No,
Speaker 1: I consider we're in an interim normal stage or in
Speaker 1: the centerim Um, I really do. I believe, and we
Speaker 1: see it even within our own company. So again, sixty colleagues, um,
Speaker 1: almost seventy of them didn't have the opportunity to work
Speaker 1: from home from the day that started in Wuhan. Our
Speaker 1: service our field professionals are service mechanics, were in the
Speaker 1: hospital first and foremost protected by PPE because their health
Speaker 1: and safety is critical to us. But we have been
Speaker 1: out working around the lock really to keep keep the
Speaker 1: world moving. And so you know, we have a work
Speaker 1: from home for some of our organization, and it's amazing
Speaker 1: that we've been able to start the company this way,
Speaker 1: really to do our board meetings remote, to close the books,
Speaker 1: to do our earnings, to to really get to know
Speaker 1: our investors, um. But most importantly we've been out there
Speaker 1: to serve the rioting public. And what most people don't
Speaker 1: know is that, you know, over half of our two
Speaker 1: million unit portfolio, we maintain over two million units, larger
Speaker 1: than the next closest competitor globally, and over half of
Speaker 1: those are in residential buildings, condominiums, apartments. People need to
Speaker 1: go down to get their food, even if they're not
Speaker 1: leaving the building to pick up things right. So you know, again,
Speaker 1: for us, our passengers are so critical and we want
Speaker 1: to keep them flowing safely and and in a healthy way. Judy,
Speaker 1: we've talked about your business, but at the end of
Speaker 1: the day, it is a business that has people. And
Speaker 1: we know that the way companies have been approaching their
Speaker 1: diversity and inclusion efforts has has really been put into
Speaker 1: focus in and you are just launched a social justice initiative.
Speaker 1: It's called our Commitment to Change. You've joined the Paradigm
Speaker 1: for Parody coalition, committing to achieve gender parity in your
Speaker 1: executive leadership bytes ten years from now. Does that feel
Speaker 1: like it's too long? No, it's it's not too long.
Speaker 1: And I would be delighted if we could beat the
Speaker 1: goal and and that's what we try to do with
Speaker 1: all expectations. Duty why does it take so long? Take
Speaker 1: so long? Well, we're already at just over thirty third
Speaker 1: right now. And when you think about it, you want
Speaker 1: to create an opportunity and and um really opportunities for
Speaker 1: everyone to excel from all backgrounds, including gender, but really
Speaker 1: create an opportunity as we grow the company for everyone
Speaker 1: to excel. Our vision is to give people freedom to
Speaker 1: connect and thrive in a taller, faster, smarter world, and
Speaker 1: that means all people. But we know we need to change,
Speaker 1: We know we need to increase the pace of this. Again,
Speaker 1: women currently represent over a third of our executives globally,
Speaker 1: and we are listening to our employees. We're bringing in
Speaker 1: outside candidates, were developing internal candidates, and we're giving people
Speaker 1: opportunities to make a difference and listen, I'm not looking
Speaker 1: to point fingers. I think I'm just trying to understand.
Speaker 1: We've had a lot of discussions with CEOs of publicly
Speaker 1: held companies and leaders, black leaders, white leaders, you name it.
Speaker 1: Uh to try and understand that this is not a
Speaker 1: new conversation, right We've been talking really inequities and racism
Speaker 1: for four hundred years. So I'm just trying to understand
Speaker 1: in corporate America, especially when you know that, like everybody
Speaker 1: knows that the research sets out there that shows that
Speaker 1: a diverse workforce, a diverse senior executive workforce, means a
Speaker 1: better financially performing companies. So I guess I'm just trying
Speaker 1: to understand why it takes so long to do this.
Speaker 1: So our and and again, our executive leadership team is
Speaker 1: overfit of verse, Our board is over verse. What we
Speaker 1: need to do again is now act. We have been
Speaker 1: talking about this. I've been an industry for thirty six years.
Speaker 1: We've been talking about it, and we have to do
Speaker 1: more than just feed the entry level pipeline. We have
Speaker 1: to sponsor women so they have the opportunity to make
Speaker 1: a difference, to learn and then to move up. And
Speaker 1: we that's what we're doing, and our commitment to change
Speaker 1: is all about listening and creating a place where everyone's
Speaker 1: voices are heard and where people feel included and that
Speaker 1: they bring their whole self to work. We're in the
Speaker 1: life safety business here, um and it's a dangerous business
Speaker 1: and I need to ensure the health and safety of
Speaker 1: all of our employees and the way we can do that,
Speaker 1: and our commitment to change is totally revolves around this
Speaker 1: is people bringing them whole their whole selves to work
Speaker 1: in terms of mental health, in terms of opportunity, and
Speaker 1: in terms of being held and included. Eighty five of
Speaker 1: our colleagues work outside the US. We're in two hundred
Speaker 1: countries and territories, and we have to create this environment
Speaker 1: in four branch offices across the globe, and so it
Speaker 1: does take time, but it takes it takes a plan well.
Speaker 1: And of course, of course the time frame we're talking
Speaker 1: about is this goal for Gender Party. I'm I'm wondering,
Speaker 1: have you set any concrete goals in terms of other diversity,
Speaker 1: in terms of people of color at your leadership? Do
Speaker 1: you have numbers you could give us our targets. Our
Speaker 1: commitment to change is going to not just set those
Speaker 1: targets and set those goals for ourselves, but also we've
Speaker 1: created an advisory group inside the company we call Perspective
Speaker 1: to hold us accountable. Our challenge, as I said, is
Speaker 1: with only fift of our population in the United States,
Speaker 1: we need to make sure we also address the other
Speaker 1: of our colleagues. And that's different in different countries and
Speaker 1: what it means to be a minority in another country.
Speaker 1: We need need to define that. We've brought in an
Speaker 1: external independent consultant to help us to interview folks to listen,
Speaker 1: and we're gonna put concrete plans in place. Our board's
Speaker 1: gonna hold us accountable, and this perspective group is going
Speaker 1: to hold us accountable. And I'll be happy to share
Speaker 1: more in the future. Listen. I think that is such
Speaker 1: a great point though, what it means to be a
Speaker 1: minority in another country, right, we need to think about it.
Speaker 1: We have it from the U S perspective, but you
Speaker 1: have a global perspective. You know, you mentioned um that
Speaker 1: you guys have been dealing with COVID nineteen since it
Speaker 1: started in Wuhan, So you really have a special kind
Speaker 1: of vantage point, if you will. What are you seeing
Speaker 1: in the Asian markets when it comes to the virus,
Speaker 1: What are you seeing in European markets? Uh? And how
Speaker 1: at all contrasts with US markets? Duty great? Now, really
Speaker 1: our great question. Our portfolios balanced really in two dimensions. Regionally,
Speaker 1: our revenue is about a third or third and a
Speaker 1: third America's Europe and Asia, So we really do see
Speaker 1: things just as they're happening, and being in these four
Speaker 1: branch offices in different cities, we're seeing it real time.
Speaker 1: In Asia, especially China. China is back at full force.
Speaker 1: Our third quarter in China was outstanding. We had growth
Speaker 1: in orders, sales were up mid single digit. We grew
Speaker 1: you know, we grew share here to date, UH really pleased,
Speaker 1: and we're anticipating a very solid twenty one in China.
Speaker 1: The rest of Asia, the mature Asia is doing well, Japan, Korea, UM,
Speaker 1: but we are seeing still some slowness in India and
Speaker 1: in Southeast Asia where even job sites for us to
Speaker 1: be able to do construction in India haven't quite recovered
Speaker 1: there at about the fifty level. As we moved to Europe,
Speaker 1: Europe is and the rest of the America's were in
Speaker 1: the high ninety percentile of being able to show up
Speaker 1: for construction work to install new elevators and escalators across
Speaker 1: both both Europe and the America's and we haven't seen
Speaker 1: that slow down even with the rebounding cases. And so
Speaker 1: you know, we're we're in for our new equipment business
Speaker 1: as well as our service business, and our service business
Speaker 1: is really the jewel in our crown. We we accelerate,
Speaker 1: we grow, share a new equipment, and then that allows us,
Speaker 1: with this two million plus unit service portfolio, to have
Speaker 1: multi decade customer relationships, to be to be there when
Speaker 1: our customers need us to maintain again, to maintain in
Speaker 1: a life safety mode elevators and escalators to keep people moving,
Speaker 1: and then after about twenty years we modernize those. So
Speaker 1: we're still maintaining very old elevators, very young ones in
Speaker 1: the iconic buildings in the world, like the Empire State Building,
Speaker 1: but also in every school and hospital and and every
Speaker 1: building that's that's over several stories. I mean, we really
Speaker 1: are somewhat ubiquitous across the globe and across all segments.
Speaker 1: All right, Gonna leave it there. Um great uh great
Speaker 1: relieview around the world. So really appreciate some time with you.
Speaker 1: Judy Marks, Thank you so much, President CEO at Otis
Speaker 1: Worldwide joining us on the phone from Florida. I love
Speaker 1: that kind of vantage point and it it mirrors what
Speaker 1: I did a real estate panel for milk in and
Speaker 1: a real estate developer in China, and they're like they're
Speaker 1: back in Beijing. It's very no masks, it's they're back well,
Speaker 1: and that's why we've seen the economic recovery in China
Speaker 1: to just they're really the only ones that are returning
Speaker 1: to normal in any sense at this point. And as
Speaker 1: we see the virus cases we're surging in the Western world,
Speaker 1: in Europe and here in the US, we just don't
Speaker 1: have the handle on it that they seem to get.
Speaker 1: And I wonder how that is going to change our
Speaker 1: growth trajectory relative to China's in the coming quarters. Well,
Speaker 1: and like you can't get into a building in China
Speaker 1: right unless you're apsays you've got a green and you
Speaker 1: can go in. I mean, it's a much tougher situation.