Sounds weird? Well, it still describes the way in which Danfoss has chosen to operate in our globalised world.

It is of course not the global part that is taken out of the equation. It’s the Danish part! You could say that Danfoss is going native wherever the company has a presence. To be part of the local communities, to live and act according to local customs and to make a contribution is the plain and simple secret of Danfoss’ globalisation strategy.

You could also say that the roots of the Danish group who employs more than 18,000 people around the globe have been instrumental in creating the modus operandi the group has embraced when it comes to globalisation.
      Danfoss was born on a small island in the most southern part of Denmark. In the middle of a predominantly agricultural area, the second son of a local farmer brought his passion for technology to life by inventing his own version of a thermostatic valve for refrigeration. The year was 1933 – and with Mads Clausen’s decision to start his own company based on this invention, Danfoss was born.

Being the only manufacturing business in the vicinity for many years led to a symbiosis with the local community. As was the tradition among farmers at the time, a helping hand was always offered in times of need – most of the first employees at Danfoss were farmers’ sons and daughters.
      Later, when the company grew bigger and had 1,000 employees and more, the impact on the local community was huge. What was good for Danfoss was good for its surroundings.
      This of course created a sense of social responsibility within the company walls and a respect for the impact the company has on its surroundings – for people but also for the environment.
      These quite basic insights became embedded in corporate culture and values, and when Danfoss later started the long journey towards becoming a global company this culture and these values were part of the luggage.

One could argue that the values are Danish and that Danfoss is thereby more Danish than global. But this logic is spoiled by the fact that the corporate values of Danfoss are formulated after serious scrutiny and analysis among employees and stakeholders at a global level. The origin might be Danish as already suggested, but time, travel and talent have transformed theses values into truly global assets.
      The real strength in this is that values that are truly embedded in the organisation serve as behavioural compasses. This is one of the secrets behind the fact that top management in Danfoss dares to go native around the world.

Trusting employees and managers to do the right things plays a major role in operating a global company. And being perceived as part and parcel of the surrounding community, something that is helped by employing local managers is an undeniable asset in any country.

This philosophy is actually set out in one of Danfoss’ five core values: “We are a global company with local representation.” Internally there is not much doubt about the meaning but it is sometimes necessary to explain to an outside audience precisely why Danfoss takes such pride in being part of its local communities. These communities, incidentally, number over one hundred on a worldwide basis and 57 of these are production facilities.

Even though the Danish origin might not play a major role in Danfoss’ global actions and profile several residual influences remain.
      For example, the company’s Danish origins are arguably responsible for its admirably egalitarian management approach when entering new regions and countries.
      Disregarding the more violent aspects of the Viking expansion, Denmark, because of its small size and the limited amount of people speaking the native tongue, has been forced to trade and to develop relations with other usually larger and more powerful neighbours. Danes have been obliged to learn other languages, cultures and customs. This cultural heritage helps explain why Danfoss strives to assimilate itself and work with local communities.

The bottom line is that Danfoss regards globalisation as a major opportunity. The company has long history in the international arena: More than 50 years ago, the first sales company was established in Argentina and the fact that a very large portion of the company’s current customers are also global makes the idea of going global almost an integral part of Danfoss’ business strategy.

Of course, managing the vast differences and varieties in a geographically diverse company is a challenge but it’s not new to Danfoss. And it is integrated in leadership development as well as recruitment.
      A stint of at least two years outside one’s native country is obligatory for any progression from middle management to the top level. Equally, Danfoss makes dedicated efforts to ensure diversity in its workforce – a logical step for a company that operates in a global arena.

Managing a global company means managing change, given that the ultimate consequence of globalisation is ongoing and still speedier change.
      For Danfoss, change is seen as more a chance than a threat and for top management, the most important focus is the people side.

Danfoss makes determined efforts to have the right people at the right place all the time. One of the tools is the so-called “traffic light” which symbolises the fact that almost any person is “green” in a job the first six or seven years, meaning that their dedication is high and their enthusiasm brilliant. Thereafter you get “yellow”, meaning that things become routine as you settle into familiar patterns – but warning signs appear as the level of enthusiasm recedes. A few years down the road the “red light” begins to flash – signalling boredom.
      The underlying philosophy is life long learning. You have to give people new challenges, new possibilities and new responsibilities if you want to make sure that changes can and will take place.

So is managing a Danish global company something special? Probably not. Being global is being global – no matter what origin you have. Geographical origins might be of academic interest but what really matters for people through every level of Danfoss and in every location can be expressed in a single word – results!

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