WEBVTT - Otis Worldwide CEO on Re-Opening Buildings 0:00:00.160 --> 0:00:04.600 This is Bloomberg Business Week with Carol Masser from Bloomberg Radio. 0:00:04.880 --> 0:00:07.720 You're listening to Bloomberg Business Week Carol Masser along with 0:00:07.800 --> 0:00:11.040 Kaylee Lines on this Tuesday and Kayley. We continue this 0:00:11.080 --> 0:00:13.600 hour with looking at some of the stresses and situations 0:00:13.640 --> 0:00:16.320 facing leaders around the globe. Man, there's a lot coming 0:00:16.360 --> 0:00:18.759 at them, of course because of the virus and and 0:00:18.800 --> 0:00:20.840 also because you know, I think a lot of leaders 0:00:20.880 --> 0:00:24.079 are trying to create a much more equitable environment. And 0:00:24.200 --> 0:00:26.920 joining us to talk about that is Judy Marks, president 0:00:27.000 --> 0:00:30.720 CEO at Connecticut based Otis Worldwide, which you might recall 0:00:30.720 --> 0:00:32.960 was spun off from United Technologies back in April. They 0:00:33.000 --> 0:00:37.560 became another public company again, uh an SMP five company, 0:00:37.600 --> 0:00:40.320 and the stock has been on quite a ride since spring, 0:00:40.840 --> 0:00:43.479 and the company also reported earnings yesterday. Juddy joins us 0:00:43.479 --> 0:00:45.440 on the phone from Florida. Judy, it is so nice 0:00:45.440 --> 0:00:48.400 to have you here with Kaylee and myself. How are you, um, 0:00:48.479 --> 0:00:50.400 and talk to us about what your world has been 0:00:50.440 --> 0:00:52.800 like in the last six or seven months. There's been 0:00:52.840 --> 0:00:55.440 a lot going on for you guys. Yeah, it has 0:00:55.440 --> 0:00:58.360 been fascinating. Carol. Great to be with you and Kayley 0:00:58.480 --> 0:01:02.440 today and I we could have never imagined starting this 0:01:02.560 --> 0:01:05.119 journey in the middle of a global pandemic. But I've 0:01:05.160 --> 0:01:07.160 got to tell you, we are so excited to return 0:01:07.200 --> 0:01:10.319 to our roots as an independent, publicly traded company and 0:01:10.400 --> 0:01:15.039 our sixty nine colleagues, who are mainly essential workers keeping 0:01:15.080 --> 0:01:20.360 the world moving, maintaining obviously elevators and hospitals and infrastructures, 0:01:20.560 --> 0:01:24.600 and just as importantly in many residential buildings where people 0:01:24.600 --> 0:01:26.800 have been locked down but still need the use of 0:01:26.840 --> 0:01:31.080 their their elevators. Couldn't be more proud. A hundred years 0:01:31.520 --> 0:01:33.560 to the month we first listed on the New York 0:01:33.560 --> 0:01:37.600 Stock Exchange, we liveding in on April three. It's unbelievable, 0:01:37.959 --> 0:01:42.240 such an incredible historic company and we are we're moving 0:01:42.280 --> 0:01:45.119 into the future. We're excited. Well, you talk about how 0:01:45.400 --> 0:01:47.920 all of these places that needs your elevators, hospitals in 0:01:47.960 --> 0:01:51.080 the lake here where I am at Bloomberg World Headquarters 0:01:51.080 --> 0:01:52.520 in New York. When I come in in the morning, 0:01:52.520 --> 0:01:54.680 when I leave in the afternoon, I just get an elevator. 0:01:54.720 --> 0:01:57.280 I don't have to touch anything. They're running automatically so 0:01:57.320 --> 0:01:59.920 that they can reduce touch points. Can you give me 0:02:00.040 --> 0:02:03.800 some insight into what kind of touchless technology or procedures 0:02:03.800 --> 0:02:06.680 you've had to implement in your in your elevator systems 0:02:06.720 --> 0:02:09.440 because of this. Sure, let me answer that, and then 0:02:09.480 --> 0:02:11.280 let me take a step back and share with you 0:02:11.320 --> 0:02:13.800 a little bit about just our business model. But but 0:02:14.000 --> 0:02:16.720 innovation is core to who we are at Otis, and 0:02:16.800 --> 0:02:21.240 we had a lot of touchless um innovations and products available, 0:02:21.400 --> 0:02:24.359 but they have absolutely come to the forefront now because 0:02:24.360 --> 0:02:27.240 of COVID, and I'm really pleased with how agile and 0:02:27.320 --> 0:02:29.000 fast our team has been able to bring these to 0:02:29.120 --> 0:02:33.280 market throughout the globe. We have gesturing technology. We have 0:02:33.360 --> 0:02:36.959 the ability for for voice interaction where you say, hey, Otis, 0:02:37.080 --> 0:02:40.359 take me to floor five. We have the ability through 0:02:40.400 --> 0:02:43.600 an app on the iPhone are e Call app to 0:02:43.680 --> 0:02:46.120 be able to before you ever leave your office, call 0:02:46.200 --> 0:02:48.840 the elevator and so it will be there for you. 0:02:49.280 --> 0:02:54.079 We have traffic management and a dispatching system that's intelligent 0:02:54.120 --> 0:02:57.520 traffic flow that allows us only to put four people 0:02:57.560 --> 0:03:00.360 in an elevator to have them safely space. You know, 0:03:00.480 --> 0:03:04.200 our customers, these building managers are telling us that they 0:03:04.240 --> 0:03:06.839 want help, they want our guidance, they want our partnership, 0:03:07.280 --> 0:03:11.200 and it's just been an amazing uh seven months as 0:03:11.200 --> 0:03:14.160 we're all trying to return to what we believe will 0:03:14.160 --> 0:03:16.359 be the new normal. I don't think we're there yet, 0:03:16.680 --> 0:03:19.960 but we're a big part of becoming part of that. 0:03:20.200 --> 0:03:22.840 I mean, so that's really interesting, Judy. So the things 0:03:22.840 --> 0:03:25.240 that maybe are changing right now and you talk about 0:03:25.280 --> 0:03:28.400 the new normal, they're here to stay. In your view, No, 0:03:28.600 --> 0:03:31.639 I consider we're in an interim normal stage or in 0:03:32.240 --> 0:03:35.040 the centerim Um, I really do. I believe, and we 0:03:35.080 --> 0:03:39.800 see it even within our own company. So again, sixty colleagues, um, 0:03:39.840 --> 0:03:44.640 almost seventy of them didn't have the opportunity to work 0:03:44.680 --> 0:03:47.760 from home from the day that started in Wuhan. Our 0:03:47.840 --> 0:03:51.560 service our field professionals are service mechanics, were in the 0:03:51.640 --> 0:03:55.560 hospital first and foremost protected by PPE because their health 0:03:55.560 --> 0:03:58.360 and safety is critical to us. But we have been 0:03:58.440 --> 0:04:01.960 out working around the lock really to keep keep the 0:04:02.000 --> 0:04:04.920 world moving. And so you know, we have a work 0:04:04.960 --> 0:04:08.560 from home for some of our organization, and it's amazing 0:04:08.600 --> 0:04:11.080 that we've been able to start the company this way, 0:04:11.320 --> 0:04:15.240 really to do our board meetings remote, to close the books, 0:04:15.280 --> 0:04:17.599 to do our earnings, to to really get to know 0:04:17.720 --> 0:04:20.800 our investors, um. But most importantly we've been out there 0:04:20.800 --> 0:04:23.840 to serve the rioting public. And what most people don't 0:04:23.880 --> 0:04:26.200 know is that, you know, over half of our two 0:04:26.279 --> 0:04:31.160 million unit portfolio, we maintain over two million units, larger 0:04:31.200 --> 0:04:34.720 than the next closest competitor globally, and over half of 0:04:34.720 --> 0:04:38.960 those are in residential buildings, condominiums, apartments. People need to 0:04:39.000 --> 0:04:40.919 go down to get their food, even if they're not 0:04:41.000 --> 0:04:44.200 leaving the building to pick up things right. So you know, again, 0:04:44.360 --> 0:04:47.800 for us, our passengers are so critical and we want 0:04:47.800 --> 0:04:51.359 to keep them flowing safely and and in a healthy way. Judy, 0:04:51.400 --> 0:04:52.840 we've talked about your business, but at the end of 0:04:52.839 --> 0:04:55.720 the day, it is a business that has people. And 0:04:55.760 --> 0:04:59.200 we know that the way companies have been approaching their 0:04:59.240 --> 0:05:02.240 diversity and inclusion efforts has has really been put into 0:05:02.240 --> 0:05:06.039 focus in and you are just launched a social justice initiative. 0:05:06.080 --> 0:05:08.640 It's called our Commitment to Change. You've joined the Paradigm 0:05:08.720 --> 0:05:12.680 for Parody coalition, committing to achieve gender parity in your 0:05:12.720 --> 0:05:18.120 executive leadership bytes ten years from now. Does that feel 0:05:18.160 --> 0:05:21.800 like it's too long? No, it's it's not too long. 0:05:21.800 --> 0:05:24.200 And I would be delighted if we could beat the 0:05:24.960 --> 0:05:27.040 goal and and that's what we try to do with 0:05:27.080 --> 0:05:31.400 all expectations. Duty why does it take so long? Take 0:05:31.480 --> 0:05:36.680 so long? Well, we're already at just over thirty third 0:05:36.839 --> 0:05:39.560 right now. And when you think about it, you want 0:05:39.600 --> 0:05:43.640 to create an opportunity and and um really opportunities for 0:05:43.720 --> 0:05:48.440 everyone to excel from all backgrounds, including gender, but really 0:05:48.520 --> 0:05:51.080 create an opportunity as we grow the company for everyone 0:05:51.120 --> 0:05:53.760 to excel. Our vision is to give people freedom to 0:05:53.800 --> 0:05:57.160 connect and thrive in a taller, faster, smarter world, and 0:05:57.240 --> 0:06:00.520 that means all people. But we know we need to change, 0:06:00.560 --> 0:06:03.320 We know we need to increase the pace of this. Again, 0:06:03.360 --> 0:06:06.719 women currently represent over a third of our executives globally, 0:06:07.200 --> 0:06:10.360 and we are listening to our employees. We're bringing in 0:06:10.680 --> 0:06:14.960 outside candidates, were developing internal candidates, and we're giving people 0:06:14.960 --> 0:06:17.640 opportunities to make a difference and listen, I'm not looking 0:06:17.680 --> 0:06:19.960 to point fingers. I think I'm just trying to understand. 0:06:20.000 --> 0:06:23.160 We've had a lot of discussions with CEOs of publicly 0:06:23.160 --> 0:06:27.000 held companies and leaders, black leaders, white leaders, you name it. 0:06:27.440 --> 0:06:29.520 Uh to try and understand that this is not a 0:06:29.520 --> 0:06:35.040 new conversation, right We've been talking really inequities and racism 0:06:35.080 --> 0:06:37.760 for four hundred years. So I'm just trying to understand 0:06:37.800 --> 0:06:40.920 in corporate America, especially when you know that, like everybody 0:06:40.920 --> 0:06:43.000 knows that the research sets out there that shows that 0:06:43.080 --> 0:06:48.080 a diverse workforce, a diverse senior executive workforce, means a 0:06:48.200 --> 0:06:51.000 better financially performing companies. So I guess I'm just trying 0:06:51.040 --> 0:06:54.680 to understand why it takes so long to do this. 0:06:55.640 --> 0:06:59.440 So our and and again, our executive leadership team is 0:06:59.520 --> 0:07:04.200 overfit of verse, Our board is over verse. What we 0:07:04.279 --> 0:07:07.760 need to do again is now act. We have been 0:07:07.800 --> 0:07:10.520 talking about this. I've been an industry for thirty six years. 0:07:10.520 --> 0:07:12.760 We've been talking about it, and we have to do 0:07:12.800 --> 0:07:15.760 more than just feed the entry level pipeline. We have 0:07:15.880 --> 0:07:19.280 to sponsor women so they have the opportunity to make 0:07:19.320 --> 0:07:22.400 a difference, to learn and then to move up. And 0:07:22.440 --> 0:07:25.600 we that's what we're doing, and our commitment to change 0:07:25.960 --> 0:07:30.040 is all about listening and creating a place where everyone's 0:07:30.120 --> 0:07:33.080 voices are heard and where people feel included and that 0:07:33.160 --> 0:07:35.520 they bring their whole self to work. We're in the 0:07:35.600 --> 0:07:39.280 life safety business here, um and it's a dangerous business 0:07:39.600 --> 0:07:42.440 and I need to ensure the health and safety of 0:07:42.520 --> 0:07:45.160 all of our employees and the way we can do that, 0:07:45.240 --> 0:07:48.000 and our commitment to change is totally revolves around this 0:07:48.400 --> 0:07:50.880 is people bringing them whole their whole selves to work 0:07:51.200 --> 0:07:54.720 in terms of mental health, in terms of opportunity, and 0:07:54.760 --> 0:07:57.760 in terms of being held and included. Eighty five of 0:07:57.760 --> 0:08:00.960 our colleagues work outside the US. We're in two hundred 0:08:00.960 --> 0:08:04.360 countries and territories, and we have to create this environment 0:08:04.600 --> 0:08:08.880 in four branch offices across the globe, and so it 0:08:08.960 --> 0:08:12.560 does take time, but it takes it takes a plan well. 0:08:12.560 --> 0:08:15.120 And of course, of course the time frame we're talking 0:08:15.120 --> 0:08:18.600 about is this goal for Gender Party. I'm I'm wondering, 0:08:18.640 --> 0:08:22.000 have you set any concrete goals in terms of other diversity, 0:08:22.040 --> 0:08:24.720 in terms of people of color at your leadership? Do 0:08:24.760 --> 0:08:27.840 you have numbers you could give us our targets. Our 0:08:27.880 --> 0:08:30.960 commitment to change is going to not just set those 0:08:31.040 --> 0:08:34.880 targets and set those goals for ourselves, but also we've 0:08:34.880 --> 0:08:38.479 created an advisory group inside the company we call Perspective 0:08:38.679 --> 0:08:41.840 to hold us accountable. Our challenge, as I said, is 0:08:41.840 --> 0:08:44.920 with only fift of our population in the United States, 0:08:45.400 --> 0:08:48.000 we need to make sure we also address the other 0:08:48.960 --> 0:08:51.880 of our colleagues. And that's different in different countries and 0:08:51.960 --> 0:08:54.319 what it means to be a minority in another country. 0:08:54.679 --> 0:08:57.360 We need need to define that. We've brought in an 0:08:57.360 --> 0:09:01.760 external independent consultant to help us to interview folks to listen, 0:09:02.080 --> 0:09:05.160 and we're gonna put concrete plans in place. Our board's 0:09:05.160 --> 0:09:07.800 gonna hold us accountable, and this perspective group is going 0:09:07.840 --> 0:09:09.840 to hold us accountable. And I'll be happy to share 0:09:09.880 --> 0:09:11.719 more in the future. Listen. I think that is such 0:09:11.720 --> 0:09:13.000 a great point though, what it means to be a 0:09:13.000 --> 0:09:15.280 minority in another country, right, we need to think about it. 0:09:15.320 --> 0:09:17.360 We have it from the U S perspective, but you 0:09:17.400 --> 0:09:20.719 have a global perspective. You know, you mentioned um that 0:09:20.800 --> 0:09:22.880 you guys have been dealing with COVID nineteen since it 0:09:22.960 --> 0:09:27.120 started in Wuhan, So you really have a special kind 0:09:27.120 --> 0:09:29.640 of vantage point, if you will. What are you seeing 0:09:29.679 --> 0:09:31.760 in the Asian markets when it comes to the virus, 0:09:31.840 --> 0:09:34.480 What are you seeing in European markets? Uh? And how 0:09:34.480 --> 0:09:37.679 at all contrasts with US markets? Duty great? Now, really 0:09:37.720 --> 0:09:42.240 our great question. Our portfolios balanced really in two dimensions. Regionally, 0:09:42.840 --> 0:09:44.640 our revenue is about a third or third and a 0:09:44.720 --> 0:09:48.480 third America's Europe and Asia, So we really do see 0:09:48.520 --> 0:09:52.120 things just as they're happening, and being in these four 0:09:52.679 --> 0:09:56.040 branch offices in different cities, we're seeing it real time. 0:09:56.480 --> 0:10:00.319 In Asia, especially China. China is back at full force. 0:10:00.679 --> 0:10:04.040 Our third quarter in China was outstanding. We had growth 0:10:04.040 --> 0:10:06.880 in orders, sales were up mid single digit. We grew 0:10:07.000 --> 0:10:10.280 you know, we grew share here to date, UH really pleased, 0:10:10.320 --> 0:10:14.280 and we're anticipating a very solid twenty one in China. 0:10:14.640 --> 0:10:19.839 The rest of Asia, the mature Asia is doing well, Japan, Korea, UM, 0:10:19.880 --> 0:10:23.520 but we are seeing still some slowness in India and 0:10:23.520 --> 0:10:26.640 in Southeast Asia where even job sites for us to 0:10:26.640 --> 0:10:29.920 be able to do construction in India haven't quite recovered 0:10:29.920 --> 0:10:33.520 there at about the fifty level. As we moved to Europe, 0:10:33.960 --> 0:10:37.160 Europe is and the rest of the America's were in 0:10:37.200 --> 0:10:39.920 the high ninety percentile of being able to show up 0:10:39.960 --> 0:10:43.800 for construction work to install new elevators and escalators across 0:10:43.880 --> 0:10:47.360 both both Europe and the America's and we haven't seen 0:10:47.440 --> 0:10:51.280 that slow down even with the rebounding cases. And so 0:10:51.480 --> 0:10:54.120 you know, we're we're in for our new equipment business 0:10:54.800 --> 0:10:57.840 as well as our service business, and our service business 0:10:57.920 --> 0:11:01.839 is really the jewel in our crown. We we accelerate, 0:11:01.880 --> 0:11:04.640 we grow, share a new equipment, and then that allows us, 0:11:04.640 --> 0:11:07.760 with this two million plus unit service portfolio, to have 0:11:08.040 --> 0:11:11.920 multi decade customer relationships, to be to be there when 0:11:11.920 --> 0:11:15.320 our customers need us to maintain again, to maintain in 0:11:15.320 --> 0:11:19.720 a life safety mode elevators and escalators to keep people moving, 0:11:19.920 --> 0:11:22.840 and then after about twenty years we modernize those. So 0:11:22.960 --> 0:11:27.120 we're still maintaining very old elevators, very young ones in 0:11:27.160 --> 0:11:29.960 the iconic buildings in the world, like the Empire State Building, 0:11:30.240 --> 0:11:33.839 but also in every school and hospital and and every 0:11:33.880 --> 0:11:37.000 building that's that's over several stories. I mean, we really 0:11:37.040 --> 0:11:41.240 are somewhat ubiquitous across the globe and across all segments. 0:11:41.600 --> 0:11:44.559 All right, Gonna leave it there. Um great uh great 0:11:44.600 --> 0:11:47.080 relieview around the world. So really appreciate some time with you. 0:11:47.160 --> 0:11:50.160 Judy Marks, Thank you so much, President CEO at Otis 0:11:50.200 --> 0:11:53.600 Worldwide joining us on the phone from Florida. I love 0:11:53.640 --> 0:11:55.560 that kind of vantage point and it it mirrors what 0:11:55.840 --> 0:11:58.360 I did a real estate panel for milk in and 0:11:58.800 --> 0:12:00.720 a real estate developer in China, and they're like they're 0:12:00.760 --> 0:12:04.679 back in Beijing. It's very no masks, it's they're back well, 0:12:04.720 --> 0:12:07.079 and that's why we've seen the economic recovery in China 0:12:07.160 --> 0:12:10.480 to just they're really the only ones that are returning 0:12:10.480 --> 0:12:13.160 to normal in any sense at this point. And as 0:12:13.160 --> 0:12:16.319 we see the virus cases we're surging in the Western world, 0:12:16.360 --> 0:12:18.680 in Europe and here in the US, we just don't 0:12:18.720 --> 0:12:20.880 have the handle on it that they seem to get. 0:12:20.880 --> 0:12:23.160 And I wonder how that is going to change our 0:12:23.200 --> 0:12:26.319 growth trajectory relative to China's in the coming quarters. Well, 0:12:26.360 --> 0:12:28.199 and like you can't get into a building in China 0:12:28.320 --> 0:12:30.320 right unless you're apsays you've got a green and you 0:12:30.360 --> 0:12:32.680 can go in. I mean, it's a much tougher situation.