GN ReSound’s new CEO Mike van der Wallen spent the first three months after he took the job meeting with a large number of employees, both in Denmark and internationally, and with current and potential customers. In April, he met with journalists, financial analysts, investors and customers at the world’s largest hearing instrument fair, AudiologyNOW, in Charlotte, North Carolina, in the United States.
“Mr. van der Wallen, now that you’ve had the chance to look around the business, what is your first impression of the company?
“First of all, I’ve met a lot of very professional and deeply committed employees who have shown incredible dedication and loyalty to the company in spite of the difficult time GN ReSound has gone through. Secondly, what I already knew from my work on GN Store Nord’s Board was confirmed: that GN ReSound has a strong ability to launch innovative products that, backed by its various brands, help set new standards for the industry.
With the way things have gone for GN ReSound over the past six months, the future doesn’t look all that bright. The abandoned sales process led to negative organic growth, and the company lost a number of key customers. How do you see GN ReSound rebounding from that?
“I have said right from the beginning that our initial priority is to restore stability for GN ReSound. The uncertainty around who was going to own GN Resound has had a severe impact on our company. As a result, it clearly made our customers question GN ReSound’s ability to deliver. We have to show current and new customers that we are a reliable partner and that we can deliver on our promises. For that reason, I’ll repeat what I said before: right now, we have to focus on creating stability. To this extent we will also continue working with the restructuring plans that were launched at the end of 2007: plans that are designed to create profitable growth and improve our cost efficiency.”
Does that mean you’ll be going through another round of ‘closing the margin gap’ like the one we saw the company go through a few years ago, when it managed to bring margins up to around 20%, close to the competitors?
“Like I said before, first of all we need to stabilize the business in order for us then to bring GN ReSound back on a winning course. We have to go out and fight to win back the customers we’ve lost and to win new customers. The only way we can do that is to deliver on our promises and to launch new, innovative products. We are facing some big challenges, but from what I’ve seen so far, I’m confident that we’ll manage that. It’s a long-term plan. Right now, I don’t want to speculate about when we’ll be able to match the competition in terms of earnings.”
You had a fourth quarter with strong, negative organic growth, but now you’re reporting substantially better growth performance for the first quarter. What are your key growth drivers?
There is no doubt that the dot by ReSound™, launched early this year, is a hit with our customers. We’ve also strengthened our marketing efforts, and let’s not forget that we’ve got a broad and diversified product portfolio covering our various brands.”
At the AudiologyNOW fair in the United States in April, you announced your new hearing instrument, the be by ReSound™, and it has attracted a lot of attention in the industry. Several financial analysts find the device very interesting, but they are also skeptical as to whether you’ll be able to deliver. What do you think the be by ReSound™ will mean to GN ReSound?
“Let me make it absolutely clear: We can deliver. We will be starting the roll-out of the product in the United States in July with a large-scale campaign, moving on to Europe and the rest of the world when summer is over. The be by ReSound™ is a whole new product concept not previously seen on the market. I am confident that the be by ReSound™ will help even more people with a hearing impairment to begin wearing a hearing instrument, and it will give current users a chance to discover the benefits of this new type of hearing instrument. Many of the individuals who have tested the device over a period of several months really didn’t want to hand it back after the test. That in itself is quite unusual. I have great expectations for the be by ReSound™ and believe the device creates an opportunity to set entirely new standards for hearing instrument users. Also, from an innovation point of view, I consider this proof that GN ReSound still plays in the ‘champions league’ of this industry.”