It’s been 12 months since Mike van der Wallen joined GN ReSound as the company’s new CEO. Back then, the world – and GN ReSound – was in quite a different situation than it is today. The credit crunch was there, but the deep financial and economic crisis we face today was not. GN ReSound had just come out of the abandoned sales process with an agenda of generating growth, winning back lost customers and rebuilding credibility. Against this background, GN News asked Mike van der Wallen about the current state-of-affairs and for a glance at the road ahead.

Mike van der Wallen, is your agenda for GN ReSound radically different today from when you took over the reins a year ago?

No, the agenda is the same, but the world and our markets are – admittedly – in a different state, so the situation certainly calls for different measures. However, our goal is the same: we are rebuilding our credibility among all stakeholders and we are winning back customers. And I feel that we have come a long way. I meet a lot of our customers and I can clearly sense that GN ReSound is back on their radar as a trustworthy supplier and a long-term partner. Our products are solid and our support to customers has improved, but we are not satisfied yet. We still have a ways to go.

There were some tough developments in the hearing instrument market in 2008 – especially in the second half, when market value growth was flat compared to historic 5-6% growth rates. Are you satisfied with GN ReSound’s performance under these circumstances?

Under the circumstances, yes – we grew 5% organically over 2007 and even experienced double-digit growth in the second half of 2008. This documents that we are winning back lost business and reclaiming market share. And it shows that our product strategy is working and our customers recognize that. We launched significant new products in 2008, many of which took the global headlines: “dot by ReSound™” and “be by ReSound™”, for instance, both set new industry standards and introduced an entirely new category of hearing instruments. We also launched several new products in the mid-priced and budget segments and today have one of the newest and broadest product portfolios in the industry.

Will you continue to pump out new products at the same pace in 2009 as you did in 2008?

We will definitely continue to build on and expand our strong portfolio and you will once again see new products from us that we expect will take the headlines and – more importantly – meet and exceed customer demand. I’m very confident about our product pipeline, not only for 2009, but also looking into 2010. Innovation has always been a stronghold for GN ReSound and we are continuously working hard to stay out in front with leading quality products.

When you set out on this journey, “fixing the foundation” of the business was one of your goals. How has that panned out?

Again, we’ve come a long way, but this is a multi-year journey and we’re not quite there yet. As I mentioned, innovation is a GN ReSound stronghold, but we have to do better in terms of the commercialization of our innovative products. In 2008, our internal organization moved closer to where it needs to be as a competitive company with a strong performance culture. We have upgraded our commercial capabilities in key markets and have initiated a global roll-out. Our country organizations will spend much more of their time serving customers and working with sales and marketing. We have clarified and simplified our brand strategy to better support our specific markets. We have introduced and are implementing a new set of values that focus on our customers, accountability, respect and a performance-driven culture. We are fundamentally changing the way we work and that obviously takes time.

Significant efficiency improvement opportunities remain and they will be addressed. Within our supply chain, the focus so far has been on the back end. For example, we have relocated production of Behind-The-Ear (BTE) products to China. Now we need to direct our focus towards the front. This optimization will include customized products, repairs and global inventory management.

In January of this year you had to reduce the organization by more than 250 positions. Was this due to the financial crisis?

Naturally, we are adjusting to the changed economic situation. These were changes that were necessary to create a leaner, more customer focused company with a significantly reduced spending level. GN ReSound’s organization needs to match our projected revenue level, so these reductions were not only due to outside factors, they were changes that we had to make in order to align our cost structure to the competitive environment. It was not a pleasant task, but it was necessary – and I must say that I’m impressed with the professional attitude that our employees have had in this difficult situation.

How do you see 2009 develop for GN ReSound?

We will continue to have one foot on the accelerator and the other on the brake. Steering a company through this perfect storm is, I think, difficult in all industries. Historically, the hearing instruments business was not thought to be cyclical, but clearly, the industry is not unaffected by the economic slowdown. So we step on the brake in some areas to reduce our operating expenses and improve our cash flow, while at the same time accelerating to ensure top line growth in areas, where we have or can gain an edge. We act responsibly and up front, focus on improving our important key performance indicators, so that – in the end – we can steer clear of any ditches and emerge from this global crisis stronger than we were when we entered it.