Hi everybody. I'm Nicolola Tangan, the CEO of Norwegian Sovereign Wealth Fund. And today I'm in really good company with Judy Marx, who is the CEO and president of Otis. Now Otis is an incredible company. It's a lifts and elevator company, and they move 2.4 billion people every day across 200 countries. Now, uh I think Judy's leadership is just like a standout example of innovation and people first culture. And so big welcome. Thanks Nikolai. Great to be great to be here in Oslo with you.

So the first thing is so now um Judy we we go into an elevator right you and I uh together and um you press you know fifth floor. Just how how do you know that you're in a good elevator? Well the first thing is actually as technology develops hopefully you're going to press that floor before you ever get to the get to the unit and the car itself. But to me it's about ride quality. It's about safety. Uh, and it's about um just the general passenger experience. And I think that passenger experience is going to be one of the many things that changes in the near future.

What is a ride ride quality? What is that? Uh, it's something you feel. Yeah. You feel how do you feel? How do you What do you feel? Oh, I think I think every person has a reaction. Is it smooth? Is it uh is does it bother my does it bother my ears? Um, how does it It's just a It's a It's a very personal experience. Should it like accelerate a lot? Should it uh be I mean just what should it like start with a bang? Should it start smoothly? What what should it do?

Well, you know the goal and and Noli, you know, I'm an engineer. So, so the goal is the faster you can get to acceleration, the more people you can move safely and move quickly. And when I talk to customers, what they want is to use the least amount of space to move the most amount of people as efficiently and quickly as they can. because if they're not using it for a hoist for an elevator, they can rent it. They can sell that space, you know, whether it's an apartment building or retail. So, the goal is to accelerate and not stop at every floor. Um, so so but but it's a balance in terms of physiology and it's a balance in terms of how fast you can you can actually move the people. But the reason we group people in in a in a product where you you push the floor before you ever get into the elevator and then it tells you which one to go. The reason we group them is to be able to have less stops and to accelerate more quickly and to move people more quickly.

Should there be music in an elevator? I think there there should be and uh we were the first elevator that put music in uh many many years ago. What's your favorite what's your favorite elevator music? Uh I Well, it's interesting. We actually believe elevators now can offer you to choose your music. All right. So, I think it's up to anybody. But the original reason that music was put in elevators was when there used to be elevator attendance before they were autonomous. And so, this was to to settle people's fears who were used to having someone in there. So, they felt more comfortable. They they listened to calming music and that's where elevator music came from.

Oh, wow. Very interesting.

Now, you are you are in a lot of iconic buildings around the world. Uh, what are you what are you most proud of? Well, I I'd have to go back to some of the buildings we've been in since day since the day they were built. Uh, we were the only US or non-French company to be in the Eiffel Tower from day one. We're still modernizing and maintaining. We have full service on the Eiffel Tower and it's truly iconic. Same with the Empire State Building. Uh, you know, as that building went up in 13 months, it was the highest building in the world at the time and it really stretched us technologically. We still are working for for Tony Malcin uh and the Empire State Building.

He went up in 13 months. The whole Empire State Building was How long How long time do you think they would have it would have taken them today? A lot longer. And why why regulations were were not okay. So lots of people no regulations. Yeah,

you know, I think about um as recent as uh last month, I was transiting through Inchan through through through the Inchan terminal to the new terminal, and we've got our largest moving walkway there. It's over 130 m long, one one unit. So, uh you know, we do moving walkways, we do escalators, but but iconic buildings, we have the Burge, we have the tallest building in the world. Now, that that'll change over time as as buildings continue to rise, but um you know, it it only matters to you for the building you use. So, I can talk iconic, but it kind of only matters where you live and what you use. And as long as that's reliable and gets you where you need to be, you don't even think about the elevator.

Well, regulations is an interesting thing, right? So, they managed to rebuild Notradam in 5 years because they were told they didn't need to to care about regulations. So um it can have have a big big difference moving um looking at the the total market.

So one of the fascinating things I think is just how few elevator companies there are. Yeah, it's very very consolidated. Very consolidated.

Right. So you got like uh you got Otis, Tiss Con. Well I I out of respect for my competitors Schindler and then there's four Japanese competitors and a few Chinese competitors. Yeah. So why is this all consolidated? Uh I think it's a variety of reasons. I think the the single most important is the nature of the work we do life safety uh high-risk high uh business uh in terms of both installations I mean we work at heights um but I think more importantly the fact that um we move people every day uh and you think about just uh you know and you've heard me say this before I we can't train or control a single passenger whether it's a rowdy group of football fans jumping up and down on an escalator or uh or a group of of of college fraternity uh brothers who who want to see how many people they can fit in an elevator. Um you know we we don't control that and yet everyone has to have a safe ride every time.

Why do you make so much money? Why is this business so profitable? Well, the business is profitable. Um and it's because of the service business. So what happens is and and we do we do focus on this as a as a a service-driven business model on a flywheel. Uh the beauty of our business is our product stays in place. It may move up and down. It may move diagonally. It may move uh a moving walkway, but it stays forever, which means you have the service which is regulated. The regulation Nikolai is on the customer. So when you think about the fact that someone something has to have scheduled maintenance for us, it's a subscription service. It's annual. Uh we have many that go multiple years, but customers have to have that if they're going to get their unit inspected by the local government, local authorities, uh and continue to use it.

So, and if it and if it doesn't pass the rate, they close it down, right? They close it down or they require repair. So, the repair part of our business is part of our service business as well. Uh it's a break fix kind of business. These are electromechanical becoming more digital but but elevators age just like any other uh equipment you have in your in your life. Um whether it's an appliance whether it's a washing machine and and they need to to be replaced and in our case they need to be replaced in place in a live building and we call that modernization and that's that's really the next big market service business itself uh over 24% in terms of of margin. Um, and it's a it's a people business. It's where we've got 44,000 uh professional field mechanics who take care of that every day. That's why we're a service company.

Um, now you're very strong in particular regions, right? Uh, countries, areas. Um, now I wouldn't say you have kind of card the the world up amongst you because of course you haven't, but you know, you for instance are very strong in Spain. Uh, just what are the tell us about the areas where you are particularly strong and why?

Yeah. So I think again and it gets back to density. Um we try and and we don't measure or I don't challenge our team to be number one globally. I challenge them to be tops in their own markets. And and we go to market obviously through four regions. And these regions all break down into operating units, operating areas and eventually 1400 branches. These 1400 branches are small P&Ls. They each have strengths and weaknesses. Um but but part of it is is legacy in terms of where we are. We are a US company. We were founded in Yoners, New York in 1853. Um so so our US strength is strong. We're number one in that market and that's a a very um a very attractive market for us and one where we're we're very pleased with our with our results.

Um why are you not stronger in China? Well, so it's interesting. Uh we got to China 40 years ago. Uh we were one of the first American companies in we started in Tenzin and spread throughout the throughout the country. Um, but I I think if you were now number three in China, we used to be number four when I first got here. Uh, I think if you look at um the investments that were made in China between 2000 and 2015, uh, we did not invest and expand to the same scale as some of our competitors under the former parent. Uh, I'm I I'm not revisiting that. I think it was just uh there was really strong growth, just not strong enough. Um, but yeah, back to your other question. Uh the southern Europe is a very very attractive business for us. Um you know we've got over a quarter of a million units in in Spain alone. Uh and you think about density in Europe where every building every building. Think of any city. Look out here in Oslo. You know once you get past three stories uh there's at least one one lift in every in every building.

M. So tell me about the driver series because you got you got some really powerful long-term demographic drivers. Just what how do you see them? Yeah. So so for a business that's been around we'll go on 172 years in September, we still have these these these mega trends um that that get you excited and and actually show room for growth. Uh urbanization remains um you know we've seen the urbanization. So we kind of we pile them high. We p we high and dense. Uh but if you think about um emerging markets and even mature markets, people are still moving to cities. Uh China alone, there's still another at least 250 million people that they want to move off the farms, raise out of poverty and move to urban areas. Southeast Asia, India is going through a tremendous amount of of urbanization. Um but we're even seeing that uh you know the business is still growing even on the equipment side in in Northern Europe uh and in in the rest of the world.

What is driving it here? The fact that we get older and can't manage to walk the stairs. Yeah, that's the second trend which is which is um you know is the aging population. I I actually stopped talking about us getting older and I I use the term longevity. Yeah, it sounds better for you and I totally. But if you think about the the aging population and the demand needs, um people want to stay in their homes as they age. Uh we're seeing uh senior living pick up everywhere uh in terms of buildings, but if we can add mobility to homes uh as we all age, uh people need that. And then as you the the next the next step which we've already we already used and have proven in lots of buildings is our ability to allow robots to operate uh elevators which will then be humanoids who have the ability to to control the elevator to come in and and to be able to deliver services to to people as they as they live longer.

Now you are you are a very important service business. Um what's the best service you have seen anywhere? What's the best service experience you've ever had? Uh I would tell you our best service is in Japan. Um and it's an expectation there. It's an expectation of excellence. The code is higher. The demand the requirements are higher from the customers. Uh and it's not even in the sophistication of of course we have to have an earthquake sensor in every elevator due to the due the nature of the uh the country and the needs. Um, but there is an expectation of quality in Japan. Not unique to our industry, but certainly in our industry. If we have an elevator breakdown in Japan and we have to uh they have to call our Otus line, our help line for for a request for a mechanic because because our elevator stopped, our branch manager actually goes physically to see that customer to explain what happened, to apologize, and to make sure it doesn't happen again. That doesn't happen anywhere else in the world.

No. Well, that you know it's so interesting because if you had asked me what's best service experience I ever had, I would say it was in a Rio Khan in Coyoto. A Rioan is a guest house and it was just unbelievable. And I remember in the guest book it was uh signed by I think it was one of the first Hiltons you know she said this epitomizes what service should be all about. And it made such an impression on me just personality you know the way they handled you personally. So why tell me why is this specific to Japan? I I I I think it's cultural expectation.

I I would tell you the other part of it which are and you know they stood they stood outside the guest house and they waited until they couldn't see us anymore. You know when it took us 5 minutes to walk down the street and they were just standing there. Unbelievable. Yeah. The other the other part though is is there's also a recognition in Japan of they are the the largest the the most rapidly aging society. So there's there's planning in place and and how I would correlate that to our business is it's probably the most mature business we have in dealing with obsolescence of parts and of equipment. So there's this just this me mental mindset of thinking of everything in advance and then being extremely customer focused.

So are you trying to make Otis um more of a Japanese company? Um I think there's mindset mindset customer centricity absolutely. Uh we're the only non-Japanese player in Japan in our industry and we've been there for a long time uh over 70 years I believe. Um and and we've learned a lot from that and we do rotate our leaders through there especially uh the last at least the leaders um in my tenure have all at the top have all been non-Japanese so they can experience it and then take it back to their country. Uh but we share lessons learned amongst amongst the group. Um but but expectations very high.

What type of regulations are there for elevators? Oh, there's there's regulations that vary by city, by country, by parts of the world. Um very specific we call it code uh very specific codes on safety standards, on limitations, on inspection regimes. Uh we have some countries where the maintenance has to happen. it's regulated by by by schedule. Uh others where you have the control and it's unscheduled but you have to meet the objectives. Uh but if you go even in the US uh I think our factory in Florence, South Carolina builds to over 70 or 80 different codes just to support the US and Canada.

And what kind of mold does that provide you with? I mean is different. That's tremendous. Tremendous. Uh which is why we haven't had why we're so consolidated. Um, first of all, you know, are are customers going to trust a brand new brand? Uh, again, you're trusting them with people's lives. Uh, but second, you have this moat that says there is no one global standard. There's no one global uh requirement. Uh, so uh for someone to enter and to and to truly hit larger than a one city market uh takes a tremendous amount of knowledge, investment, risk management uh and that's why I think it's so consolidated.

Why do they never fall down? Elevators. Yeah. Well, there's a very rarely. I mean, you hardly hear about them if you think about it. They just kind of hang there in a rope and then

Well, there is this thing called a counterwe, right? And you can see them. We were in the monk museum yesterday and it was not our elevator, but you could see the it was glass, so you could see the uh the counterwe moving as the elevator goes. Um, but I mean in the monk museum, we saw pictures of angst. There's very little angst in your in your elevators, right? That's the goal is is no angst. No angst and no uh no enttrapments. But the enttrapments do happen on occasion when power goes out when when there are issues. Uh the elevator is uh it's safer to be in an elevator than fly in an airplane. And you know how safe airplanes are. Um again with so many people every day using it, it's uh it's a proven technology. But I think the biggest reason that that it's so safe is it's got it's got, you know, a multi-redundant safety system. We call it a safety chain. Uh so there's there's three layers of safety, which is why you never fall. Uh there's there's always a mechanical layer, but there's you have a governor and you just have the ability uh with the safeties to to make sure that people stop.

The that today's the future and and what we're seeing already today in some of our offerings is making sure that when you stop, even if they it has to be an emergency, you you you actually stop at a landing so that people don't get caught between floors. Uh which is which is the worst experience someone can have. the fire brigade will show up and they have to break through a wall or something. So, that's available. But the challenge, Nikolai, is we have elevators. The beautiful news is we've built reliable elevators. Uh we have elevators that have been around 50 70 years. Um and more. I've been in some from the 1890s. So, they get modernized, but you know, again, as that technology gets applied, there's 22 million elevators and escalators in use every day. uh there's a lot of install base to get to to continue to modernize and make things more technologically uh advanced.

Why is it important to have the installed base to have a high density of install base? Well, it's all about uh productivity and and of your service fleet, right? So, if you can along route have the density where people don't have to travel and have much as much non-productive time, uh you have the ability to have more productive mechanics and if you can give them the tools and technology to help them, that's even better. But it it starts with a very basic algorithm on on routing. Um which is you know the kind of the the math challenge that that many of us had earlier in life. How do you how do you develop a route when you have that density? It gives you that ability to you know if a mechanic yesterday can handle 11, how do you get that same mechanic to handle 12 elevators in a day? And I use those numbers as just representative.

It's nice to hear you talk about your 44,000 mechanics because you nearly get tears in your eyes. I It's just clear to me that you love your mechanics. I do. And I I hope they know. Tell me about them. Tell me about them.

So So it's an interesting business. Um it's a people business. Yeah. And these mechanics are professionals. And I I I I try to show them the respect they deserve. Uh I don't use the word employees in our company. I use the word colleagues because I think it's respectful. Uh but we have no business without our mechanics. Um and uh these 44,000 are dedicated. I call it a humble pride. They care about Otis. Um, many of them, their fathers worked for us as mechanics. It's very much a trade that gets passed down. Uh, the trades changed quite a bit. It's not as mechanical. Uh, it's not as much lube and oil anymore. It's it's a lot more uh trouble find troubleshooting and digital. Uh, but there's still that mechanical need for people. And so, we're calling on 44,000 mechanics who don't typically show up at an office ever. Uh, or very rare. We'll do we'll do safety huddles. We'll do those at job sites. But but these are people who work fairly independently but are part of our company and as they succeed we succeed.

Uh if you even have you even have a like a coin or a medal that you give some of them. Tell me about I do. I have a um you know out of respect I have a a coin that I've made. It's my CEO coin. Uh it's about this big. Um they're all numbered and anytime I get to see a mechanic at a job site uh I thank them and I tell them they're the heart and soul of our company and they are um you know our growth is limited to our mechanics capabilities and the number of mechanics we have. We've added uh over 10% uh of mechanics since in the 5 years since we became independent. Uh we're going to add we added 2,000 last year. We we'll add more this year. That's our growth limiter. Believe it or not, that's our growth limiter. So in in the world of AI um we're not shrinking we're we're adding mechanics.

Where did you get the idea of the coin? I mean I've I've heard about that from the army. Um yeah I was in the defense business uh earlier in my career aerospace and defense and I always found it um meaningful. Um to me it's it's more impactful though when you can uh do it in person and with a thank you. And it's only mechanics. I I the supervisors look at me and they're like how about me? And I'm like, "No, no, no. You're part of you're part of the the management team. Um, we we reward you other ways, but it's just it's my way of saying thank you." And most of our mechanics are are part of uh are part most of our labor is represented by collective bargaining all over the world. I know people tend to think of that as a Europe ccentric thing. Uh obviously we have works councils across Europe, but our our US workforce is represented, our Korean workforce, our Japanese workforce. For us, it's the way we've always done business. we respect and and work with work this way and it it works fine.

Why don't more US companies do it do work with workforce this way? Yeah, I I can't talk to that. Our our relationship's strong. We have a multi- multi-industry union and uh and every job whether it's installation or service in the US and Canada is done by our by our labor.

Moving on to innovation, what are the most interesting innovations that you are seeing just now in the elevator industry? There's a few uh I'd say the the most interesting that'll probably have the largest impact is in the world of connected elevators. Um so whether it's the IoT connection where we've got a million of our elevators connected so we have a huge data lake so that we can do preventive and eventually prognostic maintenance but be transparent. So IoT just to so that's internet of things. internet of things.

It's it's the equipment operation and and everything being sent to us on a a very uh pseudo real-time basis. I'll I'll define it differently. You need information from from a villa uh elevator a little differently than you need it from the Rison Blue uh in terms of the the period periodicity of how often you get it. Um, but it gives us tremendous information on the elevator, uh, how it operates. And not only can our mechanic see that, our field mechanic, our Otus line help desk can see it, and our customers can see it. And so we give them a dashboard so they can see the health status of their equipment.

Uh, but I think where it's going to I know where it's going to take us is the our ability as we do scheduled maintenance to say, "Listen, this door operator that's moving the doors back and forth, we know at I'll make a up a number at 15,000 uses, um, it's going to either need alignment or replacement. So, when we're doing scheduled maintenance anyway and and coming by to do all of our our scheduled maintenance, we can either replace it or align it before it ever breaks. And that matters that that uptime matters to people because people only care about elevators when they're not working as you and I know that's when they that's when they look around they're like, "Oh yeah, I'm in I'm in an elevator and I and I have an issue or or there's a you know there's a block and I can't use the escalator." Um so for us that uptime is is is absolutely critical.

So but that connected goes beyond the c our customers. So those are property managers, condominium service customers. Um the the connected is going to go to the passenger now. So we have apps on on your phones where you can call the escalator from your from your apartment before you ever or the elevator before you ever get to it. So you actually make the call and it says, "Okay, it's here." Um, we have many office buildings where as you pass through the the the access control, the turn style to get in, the security to get in, it recognizes you and then it tells you what what where to go. Uh, and then we have we have certain clients where not only does it uh tell you where to go, but it knows if you're going to the eighth floor and you're the first person there, as you get there, it turns on the lights on the floor. So, so we're part of a building ecosystem. I like to think of us as the spine. Um but again when we understand traffic we we we have traffic flow for every building in the world. So it's a tremendous amount of data analytics that can help us. But maybe you want to choose your own music.

Um the other thing which maybe I mean now they go up and down. When will they start to go sideways? You know I I'm not sure that the sideways for an elevator is the best use of an elevator. Um there's other modes of transit that that accomplish this. whether they're moving walkways, whether they're things you've you've been on in in airports where you have uh you know, moving moving vehicles. Um I just go back one last time to, you know, and I've seen this now in our in our labs. Um so if you think as you age and and you need to go to a doctor's office and you walk in the elevator and you don't you don't recall what is it? Is it 6:15? What what I don't know where I'm going, you can talk to the elevator and say, "I need to see Dr. Dr. Smith." uh and it it takes you where you need to go. So this passenger experience is going to continue to improve over time um and as technology improves.

Uh moving on to leadership. So um Otis came out of uh a conglomerate called United Technologies and this happened during COVID. So pretty challenging, right? What did you what did you learn from this?

Yeah, so we were preparing uh the United Technologies board in November of 2018 decided that we were going to do a three-way spin. Mhm. Uh, United Technologies would remain at that time. Um, we would spin off as Otis and Carrier, the HVAC company, would spin off as well, and we had a 16-month window to complete this. Simultaneous to that, Nikolai, we were also uh from an Otis perspective returning to earnings growth. And that was our time to prove that we knew not just how to prepare to be an independent company, but to show that to the world. So we we took 2019 to prove that to prepare. Uh and then uh we were at our industry uh investor day in February at the New York Stock Exchange and all excited for our equity road show at the end of March and all of a sudden the world changed pretty drastically.

So we did the equity road show remote. Uh and then we we launched the company midnight on April 3rd right in the middle of COVID. New York Stock Exchange was remote. everything was remote and um and we knew we had to go. We knew we were going to spin. We knew it was the right thing to do. We knew we were prepared. But as you think about April 3rd, um closing the books for the first time, uh getting ready for your first earnings call, all of this first board meeting being everything being remote. Um it took a tremendous amount of agility, resilience, and we were an essential service. So construction continued in parts of the world uh and as co uh oscillated through parts of the world and what we did is we took the lessons from China which had already gone through that first burst in February and March and quickly moved it around the world and said here's how you get to customers. We had customers who absolutely needed us, hospitals, transit, and again back to my respect for our field. They were out there every day in the middle of this this Corona virus um going to going to c hospitals to make sure that people could be taken care of. And that's that's kind of where you see this resonance with our mission.

So, we had to run a business, we had to lead, and we had to communicate. And I was I was on from a from an apartment. We were rebuilding our our condominium and my husband and I were living in a small apartment. I was doing real time he was he was my he was my cinematographer and we were doing real time communication with the company um from a from a a very vacant uh uh place. As a matter of fact, my communications person would call me and she'd say, "Do you at least have a plant to put in the background or a piece of artwork?" And I said, "No, no, this is temporary." I said, "Let this will make people listen to the message." So we we rallied the team uh and um and and got not just got through it, but I would tell you we we got ready to to thrive and accelerate. And I remember at the end of the first year um I I got the leadership team together and I and I said, "Okay, get ready to accelerate." And they said, "Dude, we're in the middle of a black swan event. I mean, we've never faced anything like this. Our teams responded incredibly well. The service business held up well. It gave us that resilience. Uh, I was I did not lay off a single colleague during this time period. We we all took we took cuts. We did whatever we had to because I knew we would come back. I didn't know when, but at Nikolai, I knew we'd come back. And so, at the end of that first year, I said, "Get ready to accelerate." And I said, "Because the race is going to start again on January 1st. We're a new company and we've got to come out of the gates strong."

It's interesting how the companies you know who didn't lay off people came back so much stronger and we see it in so many industries but um when you uh so a spin basically means that you split the company into several pieces right so you get your own identity and so on and and and accountability totally and that uh very often unleashes this incredible energy right so how did you see that in Otis what did it meant to what did it mean to people to have to have their own kind of name on the on the Yeah, they they loved it and it's it's not on the door, right? Our mechanics wear it totally on their door. Why is it so important for people?

Um, I think it's people want to be part of something uh bigger. They want to understand purpose. They want to understand and in our case, they they resonate with how they keep the world moving. Um, but I think they also want to be appreciated. And you know, when you're part of a conglomerate, uh, you know, the earnings calls for the conglomerate, you know, we were one line. um we were one line in the in the releases. We were one we were a oneline segment so there was very little visibility and um over time you know that accountability if we had had a bad if we had a bad quarter one of the other divisions made up for it. You don't have that there's nowhere to hide. Um so so that that that that drive to make sure everything we were doing mattered. We were getting rid of of initiatives that didn't matter. we weren't having to do things that were important to someone else but maybe not to Otis. So that that 100% focus every day on on discipline on operating and on on what mattered um is what shows in the results and people people they rally.

It's interesting. There's a book called uh the power of us and it's about who do you want to belong to and what does it mean? What does it mean to you? And so this is just an example of you know you belong to something which is a bit smaller a bit a bit more accountable accountable and uh has a big uh has a big effect. Now you had been run you had been run inside you uh United Technologies as a cash call right for was it eight years you didn't show earnings growth. Yeah. How how did that how do you think that felt for management to be run as a cash call?

Yeah. So I I I I was not there during most of that time but uh there was clearly a view um and so we were acquired in 1976. So you think about the company formed in 1853. First time on the New York Stock Exchange was 1920 ironically a 100red years before we went back almost the same month. Um and and over time uh Otis' service business was strong, but post the GFC we were we were out of out of sync with our pricing was much higher than financial crisis. Yeah, sorry. Greater financial crisis. Um so uh as part of the parent there were two two metrics that people were incentivized on uh profit and cash flow and when you do that and you don't incentivize on growth in any organization uh you can get to a point where you harvest a business and o Otis was being harvested uh the cash flow greater than 1% or or 1.0 0 in terms of of cash flow to to net income. Uh and we we maintain that now. We're still doing it which which which I'm proud of. But um but it it threw off tremendous cash and that cash went to the parent and the parent did the capital allocation which is something we obviously do ourselves now. As part of that capital allocation, they had a very significant investment they wanted to make in a in a in other divisions instead of uh investing in the elevator business in China. uh in elevator business in China service I mean our R&D as a percent of sales during some of those years as Otus under the parent was far less than 1% our capex was far less than 1%. So it was truly it was you know the the even the IT systems were rather antiquated but but those were capital decisions that cor that a conglomerate gets to make.

So how have you what have you in terms of the corporate culture uh what have you changed since you took over? Well, we've stayed uh we've stayed true to who we are. We've um focused on something we call our absolutes. Uh other people call this um you know a values for us. Values is an interesting term, but absolutes really sets the line that uh it's it's a go no-go. You have to do these to be part of our company. Uh safety was always an absolute at Otis. It needs to be. Uh it's expanded from physical safety. again people working in dangerous situations working at heights exposed to electricity. Um we do have 17 manufacturing plants but again the majority of our workforce is in the field. Uh so safety is critical and I think what we've seen over the past few years is we've added to the physical well-being of safety to well-being in general. Uh we have our if our colleagues don't have their mind in their work they can get hurt uh or worse or even worse. So, so safety is first.

Our our second absolute is ethics. And for us, you know, compliance is absolutely critical, but more importantly, doing the right thing even when no one's looking is critical, especially when you're working alone. Uh, and the last one, which which we changed when I got there, it was controls, which I thought was interesting, but more not something that all 72,000 colleagues could participate in. And to me, just quality was the right right third absolute. So we focused on that. Um but we also uh created a culture where we want every voice to be heard. Uh the best ideas come from inside the company, but they they don't come from me. They don't come from the leadership team. They come from our team that's that's out with customers, whether they're sales, whether they're field. Uh and and we want to hear those. So we wanted every voice to be heard. and and we've created an environment where the voices are heard and every single one of our colleagues has the not just the ability but the responsibility to stop work if they don't think that do do people disagree with you inside the company?

absolutely how do you deal with that uh most days very well not always I'll be honest um you know I think it's important are they often right oh yeah they're closer to it they're closer to it. Um, and and you know, it's I kind of think that if you have if you decide everything, the company can never be better than you. Yeah. If you have the combination of all types of opinions, you could create incredible things. Yeah. It's amazing. And um I I have a a very easy email and a mobile number that that most people have, whether they're inside the company or outside. I get customer complaints directly to me. I read all my own emails. I don't nobody nobody filters anything. It doesn't go to another box. Um I think it's important to understand what's happening. Um but uh I think you know culture matters and in our case there's this I called it humble pride but there's this this this absolute zealousness to make sure um especially with our mechanics that things are are put back right that that the elevators back in operation as quick as possible. And sometimes they they do this um almost to an extreme where I'm like that would be billable guys. I know I know you want to get can you can you at least record this for us so that we can we can capture it as well. Um but but that's where you again you just get these incredible ideas on well you know if we if we put something like this in the pit you know then then we can we can make sure or if we put a camera here or if we did or put a sensor here you know this this would help

what uh what's the role of a CEO I think or roles roles yeah I think uh there I think the most the two most important roles in my mind are setting strategy um and that's that's pivotal um vision mission strategy but it's absolutely about setting the strategy and making sure everyone understands it and not only understands it but they believe in it and they execute it. Um so setting it correctly is really important in a long cycle business like ours. It matters because that strategy can last years and decades. Um risk management is a key factor and today that that that these enterprise risks are are are less technical uh are less operational and are more about people and then factors that you have to deal with that you may not control at all. And then I think the last is um is just in my my case I think it really is about getting to the core of of what's important customer centricity. Um driving that operational discipline without me being part of it but instilling that what matters so that everyone understands every day what's important.

How important is storytelling in this? Oh I think storytelling is absolutely critical. I uh you know I'm an engineer by background but that's not how you talk to people. uh you talk to them with respect but you have to context everything and it's that context whether it's with investors whether it's with government officials whether it's with the mechanics whether it's a town hall I I I came before before I came to see you earlier this week I met with our team here in Oslo about 20 people in the office and if I could get to 20 people every day I would to tell them you know here's what we're about here's how we're doing and here's here's what we need to do to grow and to thank you know, there's there's your storyteller some days, your cheerleader some days. Um, because I think the CEO needs to be the optimist. Um, and I I am an optimist because you get to see more of the company and more of of the business world than anyone else. And if you can synthesize that and tell that story about whether it's the mega trends, whether it's where we're going, whether it's how we're performing, or to just recognize your teams, it matters.

Tell me about the importance of being an optimist. I mean, don't you think it's important to point out uh the bad stuff? And Oh, yeah. Bad stuff's easy. I mean, you know, as as any leader, not just a CEO, but anybody listening to this, you know, most days you're dealing with exceptions, right? Most people aren't dealing with routine as a leader. You're dealing with with either the top end of things going right or the bottom end of things going wrong. So, so you come in every day and you forget about that 80%. You don't even deal with the 80% in the middle, right? That's what process takes care of. That's what discipline takes care of. That's what organizations below you take care of. You're dealing with the top and the bottom. Um I think too many people focus on on the problems of the day. Too many pe which they're real. Too many people focus on on you know oh we had this issue. So you're going to do issue resolution. Um you need to pull back and look at that top 10 too. It's not just the top 10% of the people but what's going right. And you have to paint the picture. And it's it's a valid picture. It's not like monk. You have to paint that picture of what's possible because if you're a good leader, you have followership and people will trust you. But you have to build that trust, Nikolai. And that takes time and takes proof.

Now, you're among a small handful of female leaders in industrial companies. um how can you encourage more women to go into these traditionally maledominated areas or does it not matter? I you know I I don't think it matters if you're a good leader. Um I I've been 41 years almost 42 now almost 41 in industry. Um and I've always been in male-dominated industries. So uh to me this is just my normal. Um I don't think I've experienced things different than you know if you're in if you're in retail or consumer package goods or telco. Um this is there are problems to be solved. There are businesses to be led and I would highly encourage women. I mean we start very early in with STEM programs with our made to move communities um social program uh to drive this earlier in school. I would tell anyone, girl, boy, stay in math and science. I mean, you know, it's the only career you you can actually at at 10 to 12 years old, take yourself off an entire future career path, whether it be in STEM or something else, by just getting off the math and science path. Um, so I encourage everyone to do that. Um, I do care about women uh having opportunities. Um, and they need to perform, but but they can. And I don't understand how some companies or or other organizations would not want access to half the world's talent.

Oh, no. Totally. And now, if you uh could not have the job in artist, what would you do?

Oh, you sound like my husband. What are you going to do next, Jude? Um, boy, that's a great question. I I I have always thought I'd love to to be able to share uh what I've learned. Um, to me, mentoring, coaching is important. So, some form of that, whether it's teaching, uh, I think I would love Well, you'd be a great teacher. I'm sure you can teach at whatever business school you want. Uh, we'll see. Um, but but right now, you know, I I uh I I'm not I don't think about that. I think about really where where we can take the company. And it's not about me. It's it's it's an iconic brand, Nikolai, that that we really want to make an iconic company. And to me, those are, you know, there's a nuance there in terms of how we perform, how we show up every day. But, um, I I it's more than being an optimist. As I look at all the data, we have so much room in front of us to grow. I I mean I it's almost a luxury to have the organic opportunities we have versus needing to get distracted inorganic versus needing to go into adjacent markets.

And what's your what's your inner drive? What is it that drive you? Wow. Um I I I'm extremely competitive. I'm extremely impatient. Uh hopefully some of those have have uh gotten a little little little little more softened over time but not not gone away. Is that a person you want to show? I if it is I don't know. Um you know just show the world. Yeah. Just make a difference. Yeah. Make a difference. Um and it is personal. It's very personal. Um, I care very deeply and uh when we when we don't perform to the level we should, I'm the first to admit it. Uh, I got on every quarter, the day after earnings, I talked to our top 500 leaders. Uh, and um, there was something that that I was that we missed this last quarter that we didn't do as well as we should have. Uh, let's put it that way. And it it will get addressed. Um, but I was the first to say to these, you know, I own it.

M I underestimated the impact of change and I and and we'll deal with it. When do you wake up in the morning? I wake up early around 5:00 a.m. uh most mornings. And what do you do when you wake up? Uh first is is um be available and look at what's happened in in in Asia uh and Asia at large, whether it's our Asia-Pacific business or China. Uh my team there knows anytime after 5, they can quickly send a text if I'm if they need to talk to me. uh they try to give me kind of that freedom of sleep a uh otherwise you this is such a global business you'd never sleep uh I'm a morning person though uh a few times a week I go do a kind of highintensity workout when I'm in when I'm when I'm at least in the states so hopefully hopefully home uh I'm not home much um because the the only way to see this business is to be with it in the markets we're in uh 80% of our workforce is outside the US um because we're We're you you'll see us in every town, every city. Um and part of my responsibility is to be there. So, and to be with our teams, be with our customers, be with the governments, and uh make sure we understand where the markets are heading. And again, be there to thank our teams.

If you were stuck in a lift with a historic figure, who would it be? Well, I'm convinced since I have a picture of him staring at me in my office, it would be Elijah Otis.

Um because come on, somebody else. Unrelated to the company. own related to the company. Wow, that's a tough question. Um, who would it be? I I I think it would be it would have to be maybe maybe Ben Franklin because I think of him as kind of the original innovator uh and yet someone who accomplished a lot in his life and he had some incredible values. He did and integrity. He did and he had longevity. So, maybe maybe all of it worked.

Absolutely. How do you relax? Uh I'm not good at relaxing. Um and there's not a lot of time for it. Um what do you read if you you know I read I read uh I try to read u books on leadership. I try to read books on because we can all and we need to all learn. Uh if you have a CEO sitting across from you that doesn't think they're still in a learning mode. Uh I would tell you you know that's uh then then they're they're going to become stagnant. Um in today's world there's just just more to more to learn. I'm right now I'm reading this book called Radical Uncertainty. Uh and um you know I probably wouldn't have read this before. I I joke with I was we were the other night together and and I I said to Adena Freriedman, the CEO of NASDAQ, I said, "I thought we only got to experience one black swan as a CEO." Um so these are interesting times, but times of opportunity. Uh this book is more focused on on what uncertainty can be predicted and what can't. And you know as CEOs we talk a lot about control what we can control and I absolutely believe that the question is defining what we can control and what I'm trying to get out of this book is is there more I can control that I just am not thinking about

now we got tens of thousands of young people listening to this podcast. What what advice would you give them? Oh I I'd give them um the same advice I'd give myself at a younger age. Um you can do anything. Um, you know, I think about just just how how fortunate I am every day. Uh, to to be leading such an an amazing business, but to be h able to have an impact. Um, so I would tell them uh stay in math and science. I would tell them whether you're going to be a business, you know, a business person or not, I I would tell them be true to your values. Understand your own personal values. I think that's really critical. where's the line that you won't cross? Uh I would tell them think about uh especially a younger me, think about taking more risk at a younger age, but know the risk you're taking. Um and and have fun. I mean, that's what it's all about.

Well, that's a list of very good uh pieces of advice. So, um uh big thank you for uh you know, moving moving us all around the world, you know, 2.4 billion people a day. um and for creating so much value for shareholders and also for being such a tremendous role model for for leaders around the world. No, thanks. Thank you. Thank you.