But don’t mistake reliable for prosaic, because the Internet of Things has opened the door to a whole new way of using the safety elevator invented by Elisha Graves Otis in 1853. For example, A.I. technology will allow passengers to be grouped by destination, thereby increasing speed and capacity by at least 25 percent, and offer them more valuable information along the way. On the maintenance side, predictive analytics will forecast potential issues so that parts can be fixed before breakdowns occur, minimizing out-of-service incidents for customers.
The challenge of bringing the lift into a new era is what attracted Marks to helm Otis, which is in the process of being spun out into a $12 billion standalone entity by parent company United Technologies. Every elevator has tons of data on it, says Marks, an electrical engineer by background who joined the company in October of 2017, following stints at IBM and Siemens. “How we apply that technology, how we become part of the mobility stream, to us and to me, is what was exciting. How do you optimize this incredible distributed infrastructure of tools, technology, and most importantly, employees and colleagues and be able to provide more value?”
To move the business forward, Marks knew she needed buy-in. She countered resistance among the company’s 68,000-plus employees with a simple strategy: “You communicate, communicate and communicate,” she said. “You share what you know as soon as you know it, but then you share some specificity in terms of where you’re going.”
Marks spent her first 100 days at Otis meeting with employees and getting a handle on the company’s strengths and weaknesses. She put iPhones in the hands of nearly all of Otis’s technicians so they could get comfortable with the technology, and went live with Yammer, Microsoft’s enterprise collaboration tool, so that decentralized employees around the world could share information and feel connected.
“Change is hard in any industry,” Marks added. “It’s all about, can you build a culture where change is consistent, where you’re communicating effectively and where people buy in and are part of the change agents?”
With the right tools and an emphasis on creative thinking, Marks believes Otis can. “We started this industry. We are going to lead this industry. And not only are we going to lead it with technology—we will lead it with the best service, the best people and with new innovations.”
Chief Executive spoke with Marks onstage during our recent CEO2CEO Summit in New York. What follows was edited for length and clarity:
We’re at a fascinating time in our business, which is the only U.S.-headquartered elevator company left in an industry going through significant change. We are one of those industries that has migrated from human operated to autonomous. You all take that for granted. There’s no longer an elevator operator in the elevator. But that wasn’t the case until people felt comfortable that they were going to be safe in an autonomous environment.
We move more people than fly. At Otis alone, two billion people a day touch our product throughout the globe. And they do it with the confidence that they will get from point A to point B, from floor 1 to maybe the top of the Burj Khalifa at over 2,700 feet tall, or take one of our escalators and then safely get on a metro. They believe that they will enter reliable equipment. And what we see emerging as a digital industrial in the future is a different passenger experience that goes with that, so these are exciting times.
In the future, you won’t need a credential to get you through the turnstile and onto an elevator. It will already know it’s you and tell your iPhone, “Go to [elevator] H. It’s here.” If you’re the first person there in the morning, it will turn on the lights.
A.I. will help us with condition-based maintenance. Over 350,000 of our elevators every day send us their status so we know what’s working, what’s happening in buildings. With access to that data, we can tell you when a like elevator somewhere else may have a wear and tear issue and needs some preventive maintenance. It will then become predictive and prognostic in the future. The goal will be to know when an elevator will go down two days beforehand so we can send the part and the mechanic now and avoid you having any downtime as a customer.
We are truly a global business that does business locally, with 1,000 or so branch managers across 200 countries and territories. We deal with a distributed work environment with repeatable processes and autonomy every day. Our largest employment base is in China, 16,000 Chinese locals. That’s the largest single market right now for vertical transportation due to the building going on, especially in the tier three and four cities.
We work around the clock. Most mornings, I start with China and Asia. And on any given day, we do 120,000 service calls. So we are a pure-play in terms of vertical transportation, however, we are doing it more than anyone else anywhere in the world.
You started out as an electrical engineer at IBM. How did your career lead you to Otis?
In IBM’s federal division, I was a systems engineer with a mission focus, serving the U.S. government and government allies with some very complex systems. I had the opportunity to watch technology unfold through the ‘80s,’90s and 2000s there. I learned very early that it’s all about the people and the connection of the people and technology and serving customers.
I went to Siemens in 2011 and eventually rose to be its U.S. CEO. So I had the opportunity to lead about a $25 billion business with about 50,000 colleagues, about 60 manufacturing plants. Then I received a call to see if I’d be interested in leading what is truly an iconic industrial company.
In the beginning, you try to understand your strengths, the gaps, where the investments have been made, where you can get better yield. I focused on getting out and visiting our employees to listen, share the vision, to meet customers and to go to installation sites and maintenance sites. I wanted to be visible so that the employees understood, “There’s someone there who’s listening to us, but more importantly who knows where she wants to take the company.” That’s how you get that buy-in.
We’re a $12.5 billion business so there’s no way that daily decisions on 120,000 service calls and thousands of new equipment installations can happen centralized at our headquarters in Farmington, Connecticut. So the challenge is: How do you prioritize? How do you empower all of your employees so they can deliver every day? And how do you put the systems in place that allow you to make sure you’re mitigating risk and yielding for the shareowners?
That’s the challenge we all face. What questions do you ask? What’s important? What’s not? How do you synthesize that information, and then how do you act quickly? One of the things I did was require that any briefing be given to me the night before. I’ve never really agreed with having meetings where people brief at you. Let me digest the information and then synthesize and allow the people to come up with some of the solutions. If you probe and ask the right questions, it’s amazing what you’ll get out of it.
I also asked to receive all the material our salespeople get on a daily basis so I could get up to speed quickly. I was the first outsider to run Otis who didn’t come from within or from the industry so I needed a rapid acceleration to the learning curve. I did that with a lot of late nights and by asking a lot of questions. And you know what you’ll find in your workforce? People want to share what they know. That’s your strength.
Growing up in retail in a small family business, the value of a customer and the immediate impact of that on your family’s income is something you learn and never forget. So I always focus on customers and value that input. It’s not about sending out a survey. It’s not about a net promoter score. It’s about, are we meeting what you need and want? And then, more importantly, is that what we’re measuring? If our KPIs aren’t attuned to what customers want, then we’re going to think we’re excelling [when that might not be the case].
We’ve benefited from being part of UTC, and now we need to spend the next 18 to 24 months figuring out how we drive new investments that allow us to play in the in the new world. We’ve been a great cash contributor to the business, but we have not had earnings growth in far too many years so we have to change things, to create some oxygen through additional margins that allows us to invest more in innovation because the digital piece of our business, being able to come up with data usage that we can’t even envision today is what’s exciting and where we’re going. And to do that, you need investment. You need talent. You need partnerships because it will not all happen inside Otis. I’m not going to hire 50 data analytics experts. I’ll look for people with different business models and different ideas.
Change is hard in any industry. It’s all about building a culture where change is consistent, where you’re communicating effectively, and where people buy in and are part of the change agents.
We have mechanics of all ages. We have Millennial mechanics who come out of the apprentice program. We have “perennials,” mechanics who are at the latter end of their career but who have the knowledge base to really understand the nuances of some of our customers and the install base. You have to think what’s the best way to share information with everyone. Everyone learns in different ways. There are lots of tools. We use Yammer. It’s very effective.
We’re proud of the iconic buildings, like the Empire State Building, the Eiffel Tower and the Burj Khalifa, the tallest building in the world, that we’re in.
But at the end of the day, the majority of the buildings we both serve and service are mid-rise office buildings, schools, churches. So we have to basically serve an entire community, from the most exacting high-rise customer to a school board.
If you’re a developer in New York, the last thing you want is to give up some of your space for elevators or anything else that you can’t rent or sell, so the optimization is getting more people safely in smaller spaces and moving them more efficiently. The developers and the architect want that. Then general contractors who contract with us really only care about two things: cost and schedule. Will you be done on time, and will you hit the cost you committed to?
The equipment market is just under a million elevator units sold a year. We’ve got about 17 percent market share in that. So we have to appeal to lots of different communities with lots of different needs all happening simultaneously in every metropolitan city in the world.
On the service side, we are a logistics company. We have to get parts to the right place at the right time everywhere on the globe. And if we replace an escalator or an elevator already in a building, we need to do it in the most rapid, least intrusive way we can without stopping movement. And the two million portfolio we manage is not all Otis. So we do that for other people’s equipment as well.
A few ways. We have a common set of KPIs we use across the globe because the product is relatively standard and the service we provide needs to live up to those service standards. So we measure every branch the same way, whether they’re doing new equipment or they’re doing service.
Also, even though English is the language of our company, we have everything translated into 23 languages. We make every message native, and we make it local.
We also have a translate button on Yammer, an internal social network where we share best practices. When people post in, say Mandarin or Portuguese, you can just hit translate and it reads right out.
We started a program called “Do the Right Thing” to celebrate people doing what’s right. That’s important when you’re doing business in as many countries as we are because you have to make sure you’re doing business in a clean, compliant way. Even today there are still some countries that do business in cash and no matter how hard you work on ethics and integrity, people can get tempted.
So once a month we go out to wherever they are—Indonesia, Mexico, Asia—and we celebrate and revel in employees who actually were tempted and did the right thing.
When you look macroeconomics across the globe, we’re a GDP kind of business. There are about 15.5 million elevators in the world today and we’re adding 900,000 every year, which will grow at GDP and GDP-plus for the service side of the business. We believe elevators will stay pretty stable in terms of new equipment. The service market, which accounts for 55 percent of our business and has far better margins, will continue to grow. But we believe the whole passenger experience market and our part of being part of the end-to-end mobility chain are the real growth areas.
The question is, what value propositions can we come up with? What business models can we come up with? Nobody has access to two billion people a day. It may be a short period of time we have that access. Think about the value of what that’s worth.
Judy Marks
Born: 1963, youngest of three children.
Hometown: Philadelphia suburbs.
Family: Married with one grown daughter.
Education: Lehigh University, 1984; Earned bachelors in
electrical engineering in three years.
First Jobs: Learned value of customer service working at her
father’s suburban Philadelphia department store in high school.
After college she joined IBM and landed her first management job
at 23 after three years with the company.
Career Highlights: Named President, Otis in 2017; Prior: CEO
of Siemens USA, Jan-Oct 2017, EVP, Global Solutions at Dresser-
Rand from 2015-2016; President and CEO of Siemens Government
Technologies from 2011-2015 and President of two different
businesses at Lockheed Martin, which she joined after her IBM
division was acquired by Loral and then Lockheed Martin.
Other: Director of Hubbell; Board of Visitors for the University
of Maryland College of Computer, Mathematical and Natural
Sciences. In 2017, named to the Top 50 Most Powerful Women in
Technology and received the Excellence in Leadership Award from
the International Society of Automation.
Very Social: Active LinkedIn Influencer with 320,000 followers.
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