Case Study

Grundfos Pumps Ltd.

EFQM Shares What Works

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We believe that the EFQM Model is a common framework that helps us all to improve our businesses. Sharing our
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GrundfosPumps Ltd.
This Case Study has been developed from a real submission document produced by Grundfos GB. We would like to
express our thanks to them for giving us this document as the basis for this case.
As this document is intended for training purposes, some of the information, including all of the results data, has been
changed.

Facts and Figures

Grundfos Pumps Limited, Grovebury Road, Leighton Buzzard, Bedfordshire, LU7 4TL
Grundfos Pumps Ltd (GPL) is a wholly owned subsidiary of Grundfos Holding A/S. GPL is a Sales and
Marketing Company, covering the UK.
Founded in the UK in 1964 as the 2nd sales
company
to
be
set-up
outside
Denmark,Grundfos Pumps Ltd (GPL) today are a
leader in the supply of pumps and pump systems
for domestic, commercial building services and
process industry applications, as well as being a
major supplier to the water supply and treatment
industries and a provider of packaged fire sets.
Employingapproximately 140 staff who areall
engaged in supporting sales and who
geographically cover all of the UK. Turnover
in 2012 was 142M. Our main office is
Leighton Buzzard with regional sales
officeslocated in Leigh (near Manchester), Birmingham, London and Livingston in Scotland. GPLworks very closely
with other UK based Grundfos subsidiary companies, GBW (Grundfos Manufacturing based in Sunderland) and GEE
(GrundfosEuroPumpwho are our national service providers) and Grundfos Watermill (supplying shower
pumps).Leighton Buzzard is also HQ forthe Grundfos Western European Region.
Our purpose at Grundfos is very clearly defined within our Grundfos Purpose statement:
Grundfos is a global leader in advanced pump solutions and a trendsetter in water technology. We contribute to
global sustainability by pioneering technologies that improve quality of life for people and care for the planet
We have continued our evolution within the UK market by consistently revisiting and reviewing our plans to ensure that
we are on track to achieve the various ambitious targets that we set ourselves, these include turnover, all levels of profit
contribution, unit sales, cost to serve, market share (incl. by sector), Enquiries to Sales conversion rates, business
excellence, customer and employee satisfaction levels, accreditations and awards.
To ensure that we constantly translate the demands and needs of the business and to maintain a strong focus on our local
business needs we operate the business via a local ManagementTeam. The team consists of key representatives of all
the main business segments who meet each month at varying Grundfos locations around the country.
The outcome of these meetings is then communicated to the teams via a combination of the intranet (INSITE), regional
and local communications meetings where a member of the first or second line management team hosts a meeting for
staff to share the main outcomes and ensure that everyone in the business understands the direction, ambitions and focus
of the company. Additionally the Works Council always has a representative present at Management meetings to
ensure that best interests are consistently represented and reported back as necessary.
In this way the information about the business and its ambitions becomes a 2-way flow as we recognise that everyone
has a key role to play in the overall success of the company.

History of the organisation and some of our achievements

In 1964 The Beatles topped the charts and Tokyo hosted the Olympic Games.In Maythat year anotherkeyevent was
taking placeasGrundfos Pumps opened an office in Bletchley,
Buckinghamshire. The company moved to its present Leighton
Buzzard location in 1972. Grundfos had at that stage been
established as a pump manufacturer in Denmark for 19 years and
1964 saw the production of the 250,000thGrundfos pump. The UK
Company was only the second, outside of Denmark, to be
established. Since then the business has continued its evolutionary
journey which has seen it attain many landmark achievements and
continue to aim at increasingly tough ambitions.
The business continuously adapts to
the changing demands within the various markets in which it operates. This means that
the shape of the business is under constant review. Two examples that show how we
have translated this into the business following the EFQM approach are firstly the
recognition that to win significant projects, we needed to structure ourselves to meet the
particular and complex demands of this business. This led to the setting up of the
London Projects team in 2000 which has been a very successful venture, culminating in
many project wins, including selling 85% of the total pump solutions for th Olympics
2012 (Grundfos achieved 60% in Athens and a little less than 80% in Beijing), see
image of the 2012 Olympic site on the left. Due to this success, the Projects Team is a
model that has been adopted by many other companies within the Group.
Another initiative involved the development of a local Fire business, starting in 2002
with considerable investment in time and expertise, we gained the appropriate accreditation (LPCB) and GPL started to
build fire sets and satisfy a new business customer. Initially, production was set-up in Leighton Buzzard but as the
business developed the decision was taken in 2010 to move facilities to GBW in Sunderland, where a more
sophisticated manufacturing facility could take the design and build to the next level. A holistic business decision was
then taken late 2010 to develop a new partnership with GBW that integrates the design and build expertise alongside the
sales and service functions into one comprehensive team. This was completed during Q1 and Q2 2011. This cradle to
grave approach will be followed carefully to assess its overall success over the coming 12-24 months. Once again this
initiative is being carefully monitored at in terms of possibly replicating it in other parts of the Grundfos world.
In the UK we have used award entry (both within and outside of the industry) as a way to: benchmark
ourselves in the local and broader business communities; communicate and promote product and
technological developments and to promote environmental issues since 2002. We have had some
significant success both in terms of winning awards as well as gaining much positive commentary within the
media. Examples of recent awards includes BPMA PIA (Pump Industry Awards - various from 2003 to 2012);
BSS (customer) Most improved supplier award in June 2011; Green Apple (environmental) award 2005 to
2012 (inclusive). Corgi Awards 2010 (voted on by the membership). We originally gained ISO9001:2000 (now
ISO9001:2008) registration and ISO 14001:2004 registration in 2004 and 2001 respectively and continue to comply
successfully to both standards through continual assessment via the British Standards Institute. In 2011, we added
CEMARS certification, which verifies our carbon footprint reduction.

Challenges and strategy of the organisation

We are proud of our company, our people and in particular of our success. Especially given the economic backdrop of
change and uncertainty we have experienced in recent years. We have tried to ensure that we are working smarter in
order to avoid placing additional pressure on our staff our most valuable asset, who show great loyalty to the
company, a fact the company in turn, wishes to recognise. Our business objectives and rationale can be defined via
three clear headings that we embrace in conjunction with the principles of EFQM:

SALES REVENUE

We offer our products to the market via different sales focussed teams
The UK is a mature market; to grow, we need to develop new opportunities
We operate closely with our Internal Partners, GBW, Grundfos Watermill and GEE, to maximise
customer value

COST CONTROL

We closely control our working capital

We operate on an economy of scale basis
We look to increase our sales through added value via ancillary sales
We relentlessly reduce waste
We automate systems and optimise processes

ENHANCING THE GRUNDFOS WAY

Health, safety and the environment come first

Innovation is part of our DNA
Developing a strong Grundfos UK culture and identity
Living the Company Values

The Management Team determine the market and product sales strategies, targets and goals. Planning is done annually
with a primary focus on existing and new product and marketing opportunities/conditions. Input is from Group Purpose
Statement, Group Business Development plans, the Sales team, market data, QMS feedback and trends, GBW,
legislative changes ECSS, EMS, Health and Safety, Key Customer inputs and Competitor Intelligence. Periodic
meetings withGrundfosGroup and RegionalManagement and business units are conducted to ensure alignment. Prior to
2009, businessplanning was visible via game plans now replaced by Strategy Maps and KPIs. . On occasions
extraordinary strategy meetings are required to ensure that focus is brought to bear on all issues that might need
additional input from other senior executives from within the Company.
One such meeting was held at Luton Hoo in May 2009 and was attended by Group Executive Vice President and
Regional Managing Director and members of the GPL Board. The purpose of the meeting was to consider the longer
term future of GPL and address the question How can we become a 200m business by 2020?
All our business sectors have very specific goals and tactics
that are steps towards our longer term strategic plans. To
remain focussed we monitor ourselves monthly against a
range of KPIs via Scorecards. Running in tandem with
these plans which are communicated to the whole business
(both in meetings and via INSITE as well as visually by
communication hubs around the offices) - we use the
principles / criterion from the Business Excellence model
and reflect these against our business objectives and results
in order to ensure that we are not simply applying but
actually living the values and principles it supports.

Markets, Offerings and Customers

The global economic climate has been volatile in recent
years and the UK has not escaped the downturn
although we have not suffered to quite the same extent
as some other European countries. However the market
is still seen as being unsettled with the future uncertain
in terms of growth in the areas where traditionally we
have been strong i.e. DBS (72% of circulator market)
and CBS (45% of market). Being able to provide
solutions for large commercial applications on a project
basis has been a vital contributor to our recent success.
Examples include Barts and Royal London hospital
upgrades; various Hotel projects and Westfield
Shopping Centre - the largest urban Shopping Centre in
Europe. The even better news is that the majority of
pumps supplied were energy efficient options.
Grundfos is a relative new comer to the Industrial
Waste Water market. Whilst our brand reputation is
strong with HVAC pumps, it is weaker in this, very
traditional market. We currently have a 7% market
share, meaning there is significant growth potential in
this market. To exploit this, we need to develop our
consulting capabilities to work with civic planners and
engineers in the design, development and delivery of
these projects.
Today we regularly act as host for other Grundfos
colleagues from all over the world to come and learn
how to be successful in certain areas such as project
work where we are seen to lead the way in this vital
area that has seen us move from bring a pump
supplier to a solutions provider; e.g. Grundfos Brazil in
June 2011. We are also using this experience and
knowledge locally to ensure that we are the supplier of choice on other flagship projects including the
Commonwealth Games in Glasgow in 2014.
Key product introductions / line enhancements both from Group as well as locally developed products are
an important part of maintaining/positioning ourselves within our various market segments.
Our Top 10 customers account for 75% of our turnover.Since the introduction of SAP CRM we are investigating
additional ways to use the tool to better deliver against customers/management demands and have devised
several local reports looking at specific objectives for the business helping support our ambitions of being a
200m business by 2020.

Operations, Partners and Suppliers

We employ a team of dedicated staff who interface with our customer, either on a face-to-face or telephone basis.
These front line staff are pivotal to the success of our business and they are given the autonomy to make decisions and
they are at the very heart of our on-going development. They also feed information back into the company via line/ UK
Regional Managers who hold quarterly meetings to discuss various issues.
Line and UK Regional Managers then feed information back to their Divisional Director (Commercial Business Sector
(CBS), Domestic Business Sector (DBS) or New Business Sector (NBS)) , who in turn disseminates this information at
monthly and quarterly management meetings. This then generates meeting action points, which is communicated to all
GPL sites via communications meetings which are hosted by Senior Managers. This completes the cycle.
Our primary suppliers are inter-company and are the Grundfos Production and Supply Chain companies; GBW, GDS,
PGF&Hilge. In terms of others, we maintain an Approved Supplier List and Agreements are held for these third party
supply partnerships. Approval of potential suppliers processes and management system is based on a documented
evaluation of the suppliers ability to fulfil Grundfos basic requirements. New vendors are evaluated using the
processes outlined in Business Management Systems including ensuring that they meet CSR (Corporate Social
Responsibility) Group standards.
We have formed strategic partnership agreements with customers over many years, both with indirect trading partners
such as Central Heating Services (DBS) and RF Taylor (CBS). We also maintain a number of framework agreements
with utility customers.As a business, we are primarily a sales and marketing company and closely follow the Process
Map that supports the local Business Management System.

Sustainability
In our role within a global organisation, we fully understand our environmental responsibility and place as little
additional strain on the Earths already scarce resources as possible. Grundfos Pumps Ltd are in business for the long
term and therefore develop strategies that will fully support the on-going sustainability of both the business and the
energy efficient products for which our name has become synonymous. To support the Groups ambitions to optimise
energy processes wherever possible and the pledge to never emit more CO2 than in 2008, we are currently going
through the process of upgrading our plant room in our Leighton Buzzard office, including investigating air source heat
pumps to optimise energy consumption. We also measure utilities usage and we have achieved our own stretch targets
to reduce these, in particular our waste sent to landfill and waste recycling.
Taking a holistic approach has meant that we have developed a variety of strategies that work in harmony to create a
strengthening platform year-on-year on which to move forward. Our cradle to grave approach to all aspects of our
business means that we focus on many different aspects, including:

Offering variable speed pumps that use only as much energy as necessary

Creating renewable energy pump solutions, that utilise solar and wind power

Offering pumps that help nature along through, for example, reverse osmosis which processes sea water so it
can be used to augment precious fresh water supplies.

Using less raw materials within the manufacturing process

Guaranteeing the recyclability of pumps and their components at the end of their natural life

Ensuring offices meet the highest standards and gain certification to uphold this

Setting targets for reducing our use of electricity, gas, water and chemicals usedthroughout the business

Reducing the number of work related accidents and near misses

Maintaining a high internal profile by encouraging all staff to contribute to our company suggestion scheme

Promoting best practise through consistent communication, with staff, stakeholders and our industry media

Undertaking regular research with customers, industry & trade bodies and employees to attain views

Constantly revisiting the plan do - check act (RADAR) cycle.
It is our multi-faceted approach to our business that we believe is unique to us. We constantly assess and benchmark
ourselves both within the Grundfos Group, our industry as well as within the wider business community and we also see

this as being a very important measurement structure to continue to drive the business forward both for now as well as
into the next decade.

Our Management Structure

Within the Grundfos Group, Grundfos Pumps Ltd is part of the Western European Region.

We are constantly reviewing the business to ensure it is fit for purpose. To support the 2010 to 2014
Strategy, we refined our organisational structure. Changes included:

Development of a bespoke Marketing team

The creation of Product Manager roles

Creation of a CSU support unit within Operations
The Group decision to develop a Financial Shared Service Centre in Hungary (opened in 2011) enabled
investment in a more highly skilled, professionally qualified, local finance team, allowing Finance to act more
as a Commercial team supporting Sales and assist with commercial decisions as well as reviewing the role
of our internal and external sales functions.
Ultimately all businesses must judge themselves by their most tangible results their turnover, profit and working
capital. When we first started trading in the UK in 1964, it would have been impossible to envisage the multi-platform
company that would emerge 45 years later. Since 1975, we have doubled our turnover every 10 years. We aim to
achieve our goal of becoming a 200 million company by 2020.

1. Leadership
The Management Team determine the market and product sales strategies, targets and goals. Planning is done annually
with a primary focus on existing and new product and marketing opportunities/conditions. The plans, and our progress
against them, is visualised via our Strategy Map and KPI Reporting.

As a company we follow the Grundfos purpose statement and actively support and encourage the use of the six
Grundfos Value statements (see below). These revitalised Values were launched on 20th June 2011; GPL staff joined
together with other UK employees to become part of a global launch with 17,000 colleagues participating in 1,200
workshops speaking 93 languages, all within a 24 hour period. Every individual employee received a personal invitation
to, not only take part, but to discuss the values and what they mean to them As a result of the day video clips and text
statements have been uploaded to a company-wide web site for all staff to access. Staff at Leighton Buzzard, with our
General Manager leading the proceedings, enthusiastically took part in all the workshops and shared their views with
their colleagues both in the UK and across the world. Another hit was the pig roast that was laid on by the company at
lunchtime which also met with a great reception!

THE GRUNDFOS PURPOSE

Grundfos is a global leader in advanced pump solutions and a trendsetter in water technology. We
contribute to global sustainability by pioneering technologies that improve quality of life for people
and care for the planet.

Our local ambition is also simple; be the UK No.1 pump solutions provider of choice. An ambitionwe will continue
to relentlessly pursue by effectively promoting and selling our core portfolio as well as developing local products and
providing added value products to enable us to become a one stop shop in terms of knowledge, expertise and product
diversity.
Our mid-term goal is to become a 200 million company by 2020. To achieve this growth, we need all our managers to
focus more of their time on strategic issues and planning; this means empowering our people to effectively self-manage
the day to day operations and improvement.

Title

Description

1a1

Purpose & Values

1a2

Strategy
Development &
Communication

1a3

Shared
Leadership
Principles

1b1

Monthly
Management
Meetings

1b2

EFQM Status
Document (this
document)

1b3

Business Unit
Sales
Meetings

1c1

National Account
Management

Prior to the launch of the new Grundfos Values

in 2011, we had our own GPL Values, which
were reviewed every 3 years. We continuously
review the communication and understanding
of the values by focusing the EOTQ
nominations around the values and having
these as a topic at our quarterly
communication meetings and Conference.
Annual business planning and strategy
development workshop (off site) incorporate
input from Board & Regional Management. In
2010, we adopted Strategy Maps, which are
now deployed throughout GPL.
Principles introduced at quarterly sales
meetings to external staff with attendance of
SOM, who communicates to internal staff. The
Management Team have all signed the Code of
Conduct, which defines the behaviours we
expect all our people to display.
This is a one day meeting, focused on
evaluating overall & operational performance
(incl. P&L and scorecards). In 2010, we decided
to extend this meeting to 2 days every quarter
(QMM) to cover additional topics or issues in
more depth. The MMM/QMM decisions are
cascaded down via local and business segment
area meetings.
Our EFQM Status Document is a living
document, regularly updated and used by all
managers to review and improve our processes
and key approaches. The insights provided are
a key input to our annual planning (2c2).
In addition to regular virtual meetings, Sales
Teams regularly meet (normally 2 times per
year) for 1-2 days to review performance, KPIs
and customer feedback. They address areas
of concern and agree action plans.
All major National Accounts have an owner;.
Performance for these is reviewed at QMM and
the ECSS survey is used to review growth
potential, resulting in strategic action plans.

1c2

Engagement with
Industry
Associations

1c3

Stakeholder
Mapping

To understand and influence legislation and

industry practice, we actively participate in
associations and interact with members,
including DBS (CIPHE, HHIC, BPMA), IWW
(DEFRA), HVAC, CBS (CIBSE), WMSOC, British
Water parliamentary lobbying.
We have mapped our key stakeholder groups
and assigned an owner at MT level for each.
The owner is responsible for ensuring a
dialogue is created, including structured

Evidence
Available
The Grundfos
Values are
communicated via
our intranet,
INSITE.

Linkages & Key

Results
Employee of the
Quarter (3e3),

The Strategy Maps

and presentations
use to explain
them are on
INSITE.
The values are
incorporated into
the EDD review,
including 360o
appraisals for all
managers.
Minutes from
both the MMM
and QMM,
including the
actions agreed,
are available on
site.

Strategy Map in
Criteria 9

The live on-line

version is available
for review on-site.

Annual Planning
Process (2c2)

Minutes are
available from the
Directors.

Market Insights
(2b2)

ECSS results
communicated on
Intranet and to
Line Managers by
SDs
Progress reports
are reviewed at
the QMM; these
are a key input to
our strategy
reviews.
The Stakeholder
Map is included in
criterion 8..

Key Customer
Plans (2c4), ECSS
Survey (5e1), ECSS
Results (see 6a)

Code of Conduct

Objectives
cascade (3.c.3)

Industry Insights
(2b3), Society
Survey (see 8a)

Stakeholder
Surveys (see 6a,
7a & 8a)

feedback mechanisms.

Title

Description

1d1

Aligning
Objectives

1d2

Talent
Development

1d3

Empowering
Operations

1d4

Embracing
Diversity

1e1

Change
Management
Skills

1e2

Divisional
Strategy Maps

1e3

Development
Projects

Annual, structured & documented face to face

meeting, as part of the Employee Development
Dialogue (EDD) to agree objectives & personal
development plans for the coming years, in line
with business and individual needs.
The Talent Development Program is a Group
initiative; through the EDD process we identify
potentials to put forward from this program,
which includes attending courses at the
Grundfos Academy in Denmark.
To enable the business to grow, our managers
need to focus on strategic, rather than
operational, issues. This means our people are
self-managing; facilitated by creating a
culture of empowerment. Part of this is
forming Improvement teams to drive
operational and incremental improvements.
Both the Sales and Engineering sectors are
traditionally male dominated. In GPL we have
addressed this and now 3 of the 8 Directors on
our Management Team are women and 40% of
the second line managers are women. This is
exceptional in our market.
Change is part of our everyday business. All
senior managers have attended the Grundfos
Change Management Program at the Grundfos
Academy. This course teaches the hard skills
like project planning & management and the
soft skills, like engaging people and other
stakeholders to effectively drive change.
Each Division creates a Strategy Map, based on
the GPL Strategy Map. This details the change
program to support the 5 year plan. Annual
budgets and objectives are based on this plan.
Where a step-change is required to achieve
our strategy, we form a Development Project
Team. Each is sponsored by a member of the
Management Team and led by a senior
manager. Progress is reviewed during the
QMM (1b1) and we monitor the number of
projects completed (9b6) on our scorecard.

Evidence
Available
Examples of
completed EDDs
are available onsite.

Linkages & Key

Results
Objectives
Cascade (3c3)

The Talent
Development
program can be
explained on-site
by our HR Team.
Our culture of
empowerment is
best
demonstrated onsite.

EDD (3b1),
Leadership
Development
(3b3), Employee
Turnover (7b2)
Project Teams
(3c1), Involved in
Improvement
Teams (7a6)

Diversity is a topic
covered in the
Leadership
Development
Program.

Leadership
Development
(3b3)

The Change
Management
program can be
explained on-site
by our HR Team.

Top Management
(7a2)

Each Director can

provide a copy of
their Strategy Map

Strategy Map
(2d1), Business
Warehouse (4e1)

All projects use

the standard
Grundfos Project
Management
methodology.

Project Teams
(3c1), Project
Completed (9b6)

2.

Strategy

We have a 5 year strategic planning process to develop our mid-term strategy, derived from the long-term 10 year plan.
Both are done in cooperation with, and with inputs from, both Regional Management and Group Management. The 10
year plan defines the direction and high-level goals for the European Region. The 5 Year Plan defines strategic
initiatives which translate this direction into specific actions and objectives.

The output from the Luton Hoo meeting in 2009 formed the basis of our current 5 Year Strategic Plan (2010 to 2014).
To succeed in these objectives we must:


Maintain our market share in the core business whilst maximising profit margins


Develop Solutions and Consulting capabilities to expand into new and emerging markets


Develop Servicing Business to increase revenues from core business


Recruit, develop and retain high performing people

Title

Description

2a1

Annual Target
Letter

2a2

Market Signals

2a3

Industry Signals

2b1

Annual
Performance
Analysis

2b2

External
Assessments

Annually, input is gathered from Group

management in form of a target letter. This
letter includes broad sales and cost targets that
drive our overall business objectives. The Board
of Directors meets twice annually with GPL to
review the direction and plan the strategies
going forward.
The Management Team determine the market
and product sales strategies, targets and goals.
Each Director summaries this in a Market
Signals report for their business area,
incorporating feedback from the UK market
and Group Marketing.
The learning from the various industry bodies &
trade associations are collated annually to
produce an Industry Signals report. This
includes any potential legislative changes, both
within the UK and Europe that will directly or
indirectly affect us.
We review the key performance indicators
quarterly at the QMM, giving the Management
Team a clear understanding of current and
potential capacities & capabilities, summarised
in the Annual Performance Analysis.
We utilise internal, external and cross company
assessments, the MT reviews and prioritises the
opportunities to drive Best practice
improvements.

2b3

Product Roadmap

2c1

Strategic Planning
Process

2c2

Annual Planning
Process

2c3

Policy
Development

2c4

Key Customer
Plans

We work closely with Group Program

Management, GBW product development, and
group IDAS to ensure the strategy matches the
product Roadmap.
We develop a 5 year Strategic Plan based on
these inputs to define the overall direction for
Grundfos Pumps Ltd. This forms the basis for
the Annual Business Plans and objectives.
GPL has an annual process starting with a
planning meeting where we review our prior
strategies, analyse results, review new inputs
and update or create new strategies, local
tactics. This feeds into the annual budget
process (see 4b1).
GPL uses a systematic process to evaluate,
create, review and update our policies,
guidelines and procedures in order to
effectively allow the Company to function.
Annually, each manager gets input from their
respective teams and individuals to develop
specific customer plans and goals. In 2010, we
extended this approach to cover the new &
emerging markets.

Evidence
Available
The Annual Target
Letter and
associated
communications
are available from
the GM.

Linkages & Key

Results
Strategic Planning
Process (2c1),
Strategy Map
(2d1)

Copies of the
reports produced
are available from
our Marketing
Team.

Signals Reporting
(4e4)

Copies of the
reports produced
are available from
our Marketing
Team.

Signals Reporting
(4e4)

QMM Minutes
and Annual
Performance
Analysis Report is
available on-site.
Summary Report,
detailing the Best
Practices
identified, is
available on-site.
The Product
Roadmaps are
available on-site,

Business
Warehouse (4e1)

A copy of the
current 5 Year
Plan (2010 - 2014)
is available onsite.
The process is fully
documented in
the Business
Process Model.

Annual Planning
Process (2c1),
Strategy Maps
(2d1)

EFQM Status
Document (1b2)

Product
Development
(5b1)

Annual
Performance
Scorecard (2d3)

Policies are
published via
INSITE

Business Process
Model (5a1)

The Key Customer

Plans are available
on request from
the relevant
Director.

National Account
Management
(1c1)

Title

Description

2d1

Strategy Maps

2d2

Company
Conference

2d3

Annual
Performance
Scorecard

Company goals are communicated at the

Company Conference and published companywide via INSITE. Each Division develops their
own strategy map to further translate these
objectives into specific actions.
Every year, we hold our annual Company
Conference. This allows us to bring all our
people together, communicate plans for the
coming year and celebrate the successes of the
past year.
Based on the Strategy Map, Annual Plans &
Budget, we develop a set of KPIs called the
Annual Performance Scorecard. This is the tool
used to review progress against our goals.

Evidence
Available
A copy of the GPL
Strategy Map is
included in
criterion 9.

Linkages & Key

Results
Annual
Performance
Scorecard (2d3)

Photo graphs &

presentations
from the event are
posted on INSITE.

Company
Conference
Attendance (7b6)

The Annual
Performance
Scorecard is on
INSITE.

Monthly
Management
Meetings (1b2)

3.

People

To ensure everyone is focused on achieving the

same goals, we have a simple objectives
cascade process which ensures a clear line of
sight from the Vision to individual objectives.
This approach is implemented through the
Employee Development Dialogue (EDD). This
is completed during an annual one to one
meeting between the employee and their direct
manager. The four components are shown in
the diagram. This integrated approach enables
us to effectively manage performance and
adjust to the changing needs of the business.
To encourage our people to minimise their
impact on the local environment, we have a
number of schemes to promote carbon-friendly
travel to work, including incentives for
walking, cycling, car-pooling and using public
transport. We are currently revitalising our car
fleet to ensure that each car has reduced
emissions this is an exercise that will be
completed by end 2013.
Charitable donations had always been part of
our company culture, but were undertaken on
an ad hoc basis until 2008, when employees
were given the opportunity to donate to a fund
designed to help less well off employees and
their families associated with our South African
company. In 2008 we formalised our efforts in South Africa by registering SACRED Trust as a charity. The idea is that
we assist our colleagues children in Africa, by trying to give each child a good start through providing them with an
education to help equip them for life. Monies are raised through individual monthly employee pledges (taken from
salaries), auctions, raffles and draws at various sporting events. This allows us to touch the lives of 5,000 children
today with levels of support and activities.
As an employer we hold Investors in People and Positive about Disabled People (PADP) accreditations that we
achieved in 2004 and have continued to maintain since. PADP is a UK Government recognition to employers that
meet commitments regarding the recruitment, employment and career development of disabled people.

Title

Description

3a1

Employee
Motivation
Survey (EMS)

3a2

Skills Gap Analysis

3a3

Recruitment
Process

3b1

Employee
Development
Dialogue (EDD)

3b2

Employee
Training

3b3

Leadership
Development

3b4

Investors in
People

3c1

Project Teams

Bi-annual survey,managed globally by Grundfos

Group, which is completed by individuals
anonymously. Themes covered include:
employees satisfaction, motivation, loyalty,
personal development and pay & terms. It also
asks for opinions on management, daily work
and colleague relationship.
Once the Strategic Plan is defined, we
determine the skills & competencies required
to achieve these goals. The assessments from
the EDD enable us to identify the gaps between
the current & required skills and ensure
appropriate trainings are available, either from
the Grundfos Academy or 3rd parties.
As part of the Annual Budget Process, we agree
any changes to headcount and the specific skills
required to fill these roles. We advertise all
vacancies both internally & externally. We aim
to have at least one external and one internal
candidate for all roles.
EDD completed annually in the form of a 1:1
meeting with Line Manager using the Group
EDD database system, with a mid-year review
to check progress.
Topics discussed are
Performance evaluation, Target development,
Skills Gap analysis, Training Needs.
Training needs are discussed as part of the EDD
process,
comparing
current
skills
&
competencies with the required profiles. The
identified trainings are designed to close the
gaps identified in the Skills Gap analysis.
Training is given on-the-job, in classroom and
via the Grundfos eLearning platform.
The Grundfos Leadership Development
program is structured over 3 years and is
delivered via the eLearning platform and at the
Grundfos Academy, Denmark. The program
applies to current senior managers; high
potentials first go through the Talent
Development program (1d2) and potential
senior managers. This process enables mobility
within the Grundfos Group.
We have held our IiP certification since 2004,
with regular external audits to ensure our
people management processes are compliant.
All employees are encouraged to participate in
Development or Improvement Projects,
identified either in the Strategic Plan (see 1d3)
or through process reviews, FISH suggestions
(see 3c2) or audits. The Grundfos Change
Management Program (1e1) includes a
structured project management approach.

Evidence
Available
Team reports and
resulting action
plans are available
on INSITE.

Linkages & Key

Results
EMS Results (see
7a)

Full details of the

analysis are
available from our
HR Team.

Skills Gap Analysis

(7b1),
Opportunities for
Development
(7a3)

The process is
defined in the
Employee
Handbook,
available on
INSITE.
All individuals will
be able to share
their EDD on-site.

Skills Gap Analysis

(7b1), additional
data available onsite.

EDD Completion
(7b5), Follow Up
on EDD (7a4)

Our full Training

Portfolio can be
explained on-site
by our HR Team.

Skills Gap Analysis

(7b1),
Opportunities for
Development
(7a3)

The Grundfos
Leadership
Development
program can be
explained on-site
by our HR Team.

Skills Gap Analysis

(7b1), Employee
Turnover (7b2),
Top Management
(7a2)

The IiP Certificate

is internationally
recognised.
The Grundfos
Change
Management
Program can be
explained on-site.

Opportunities for
Development
(7a3)
Involved in
Improvement
Teams (7a6),
Projects
Completed (9b6)

Title

Description

3c2

FISH Suggestion
Scheme

3c3

Objectives
Cascade

3c4

Employee Pledge
Program

3d1

Internal
Communications

3d2

Works Council

3e1

Flexible Benefits

3e2

Bonus and
Rewards

3e3

Walk to Work
Scheme

3e4

Sport & Social

Club

The FISH Suggestion Scheme was introduced in

2007. Employees are encouraged to contribute
ideas, focused on achieving strategic goals or
improving the way we work.
Ideas are
reviewed at the MMM (1b1). If agreed, the
originator of the idea is involved in the Project
Team, usually as Project Leader.
All team and individual objectives can be
directly linked to the strategic objectives in the
scorecard. Targets are set and reviewed
through the EDD process (3b1).
We encourage employees to contribute
donations to charity through Payroll Giving, a
tax-free scheme.
We also encourage
volunteers in a number of different areas,
including School Governors, charities and
company sponsored projects.
We use a number of different channels to
communicate with employees, including direct
discussion, INSITE, the Annual Conference, the
Works Council, meetings and notice boards,
Although UK legislation does not require us to,
we have a Works Council of elected employees
to create a dialogue between the Management
Team and the workforce. The Council meets
quarterly and minutes are published on INSITE.
We introduced a points-based Flexible Benefits
scheme in 2009, which applies to all permanent
employees. They can choose their own tailored
benefits package from a range of different
options, including Pension, Health Insurance,
Dental Plans, Child Care and Home Broadband.
All employees are eligible for either individual
bonuses (sales based) or team rewards. The
bonuses are based on performance against
their agreed objectives (see 3c3).
To encourage employees to walk to work, we
introduced this allowance in 2007. In 2010,
following a FISH suggestion, we extended this
to include cyclists. In addition to promoting
fitness, this reduces our overall environmental
impact by reducing the number of employees
using their cars to travel to work.
As part of our employee well-being program,
we have a Sport & Social Club, with an
organising committee of 3 volunteers. They
organise a number of different events, from
football tournaments to social projects, like
supporting local charities.

Evidence
Available
Details of the FISH
Scheme can be
explained on-site.

Linkages & Key

Results
FISH Suggestions
(7b3)

All individuals will

be able to share
their EDD on-site.

EDD Completion
(7b5), Set Clear
Objectives (7a5)

The scheme, and

how to enrol, are
included on
INSITE.

Charity Donations
(8b6)

The different
channels used can
be seen on-site.

Questions
included in EMS
(3a1)

The agenda and

minutes of
meetings are
available on-site.

People
Satisfaction &
Motivation (7a1)

Full details of the

scheme can be
explained on-site
by our HR Team.

Questions
included in EMS
(3a1)

Full details of the

scheme can be
explained on-site
by our HR Team.
Registered
participants get an
additional
monthly
allowance in their
salary.

EDD Completion
(7b5), Questions
included in EMS
(3a1)
HSE Policy (4c1),
Walk to Work
scheme (8b5)

There is a
dedicated page on
INSITE explaining
the current
activities.

HSE Policy (4c1),

People
Satisfaction &
Motivation (7a1)

4.

Partnerships & Resources

We work very closely with GBW and Watermill with whom we interact closely as both a partner and a supplier. This
relationship is very important to us both, as is our relationship with GrundfosEuropump(GEE) both a partner and
service provider. We pioneered the concept of the Servicing Business for commercial customers, a model that is being
adopted world-wide by the Grundfos Group.
To achieve our strategic goal regarding servicing, we are reliant on upstream and downstream partnerships, as well as
internal development. For example, in the Domestic Market, we use the downstream expertise and capabilities of GEE
and upstream capacity of the Central Heating Services (CHS) service engineers to fulfil service contracts with key
customers. The UK has approximately 21 million households; with a market share of around 70% of circulator pumps
for central heating, there are approximately 15 million Grundfos pumps in British homes. CHS have over 6,000 service
engineers, covering the length & breadth of the UK. Utilising this capacity through a partnership, where we provide
central training and expertise, means we can provide effective service cover without significant investment in personnel.
We also received consolidated feedback from CHS on recurring issues with specific models, enabling us to feedback to
our manufacturing partners.
In 2011 we launched our revised
website, based on feedback
collected from different channels,
including account reviews and a
targeted on-line survey. One of
the objectives was to increase the
volume of sales through the web,
especially
to
dealers
and
distributors. This has significant
productivity benefits for us, which
are ultimately passed back to
customers through the reduction
in the costs of sales.
Our intranet, INSITE, has a
similar look and feel, based on the corporate branding, so our employees are familiar with the layout and can easily
support customer enquiries regarding the system.
Following the implementation of the new website in 2011, we increased total sales from less than 6% in 2009 to over
11%
by
the
end
of
2011.

Title

Description

4a1

Preferred
Suppliers

4a2

Servicing Partners

4a3

Industry & Trade

Associations

4b1

Annual Budget
Process

4b2

Credit Control

4b3

Stock
Management

4b4

Financial
Reporting

4c1

HSE Policy
Documents

4c2

Environmental
Management
System

4c3

Asset
Management

In line with Group Policy, we have a structured

process for assessing all suppliers to determine
their suitability. If they are approved, they will
be added to the preferred supplier list.
We provide comprehensive after-sales support
through our partner GEE. Calls are taken by our
call centre and entered into the GEE Dispatch
database. Event driven surveys are used to
review the end to end process.
We have established a number of partnerships
with a range of stakeholders, aimed at
promoting awareness and sales of the EuP
directive compliant products.
The annual budgeting process is a key element
of the overall Annual Planning Process (2c2),
ensuring their alignment. The process is
completed by all managers with budgetary
responsibility, within the guidelines set by the
Finance Team.
Our credit control process starts with pre-check
before the sales orders are processed, as well
as after invoices are issued. During the
financial crisis, we had to add additional people
to follow up on outstanding debt but regained
control of this in 2012.
We have a virtual stock allocation within the
Grundfos Supply Chain. This is based on our
quarterly sales forecasts.
In 2011, we
completed a review project with the European
Supply Chain to reduce overall stock levels.
We report P&L to Group on a monthly basis,
defined within an agreed timetable. Our
financial reporting processes are externally
audited on an annual basis to verify the yearend figures and ensure legal compliance.
Our Health & Safety, Security and
Environmental policies and practices defined
our key programs in these areas. The Health &
Safety Committee meet quarterly to review
progress against the H&S Action Plan, which
includes our employee well-being program.
Our Environmental Management System covers
all our sites and operations. It has been
ISO14001 certified since 2001 and is regularly
audited, internally & externally. Our key focus
is reducing utility consumption and waste.
All assets are recorded on our Asset Register
and annual audits are undertaken to confirm
their condition and determine replacement &
disposal requirements.

Evidence
Available
The process is fully
documented and
internally audited.

Linkages & Key

Results
Supplier
Performance

Minutes are
available from the
quarterly review
with GEE.

After-Sales
Support (6a6)

Minutes are
available from the
relevant owners.

Pump Industry
CSR Survey (8a)

The budgeting
process is full
documented and
can be explained
by our Finance
Team.
The credit control
process is full
documented and
can be explained
by our Finance
Team.
The final report
from the Project
Team is available
on-site.

Financial Results
and Targets (9a &
9b)

Financial Audit
Reports are
available on
request during the
site visit.
The policies are
published on
INSITE.

Business
Warehouse (4e1),
Financial Results
and Targets (9a &
9b)
Walk to Work
Scheme (8b5)

External & Internal

Audit Reports are
available on-site.

Environmental
Indicators (8b)

Audit Reports are

available on-site.

IT Policy (4d1),
Environmental
Indicators (8b)

Days Sales
Outstanding (9a6)

Stock Holding
(9b5)

Title

Description

4d1

IT Policy

4b2

SAP R3 System

4e1

Business
Warehouse

4e2

INSITE

4e3

Grundfos UK
Website

4e4

Signals Reporting

Our IT Policy defines the investment,

replacement and support for both Hardware &
Software required to support our strategy. The
policies are reviewed on a 5 year cycle, in line
with the Strategic plan and investments agreed
as part of the annual budgeting process.
The SAP R3 system was implemented in 2008
to provide an integrated platform for CRM, ERP
and supply chain management. It is our key
planning and management tool. In 2011, we
participated in a Group-wide review to improve
the efficiency and effectiveness of its use. One
of the improvements was to managing the
Supply Chain interface (see 9b5).
The Business Warehouse system provides
reporting and analysis of the data captured via
SAP R3. We have trained a number of analysts
in different departments to improve data
analysis, scorecard reporting, forecasting and
identification of potential improvements.
Our company intranet site is called INSITE. It is
available to all employees and includes all
policy documents, work instructions and
communications.
The UK website is used as an external interface
with customers. As well as a sales channel for
the indirect channel, it provides information to
all potential customers about our products and
services. It also includes an eLearning platform
for key customer groups. We launch a revised
webshop in 2011, aimed at increasing sales
through this channel.
There is a section within INSITE to enable the
collection of intelligence from the external
environment, including market, industry,
legislative and customer feedback. This data is
used to produce the Signals Reports.

Evidence
Available
The IT Policy and
supporting plans
can be explained
on-site by our IT
Team.

Linkages & Key

Results
Total Costs (9b1)

The SAP R3 can be

demonstrated by
the Teams during
the site visit.

Business
Warehouse (4e1)

The Business
Warehouse
system can be
demonstrated
during the site
visit.
INSITE will be
made available to
the assessors onsite.
The website
design &
operation can be
explained by our
IT Team.

Development
Projects (1e3),
Improvement
Projects (5e3)

Examples of
Signals Reports
are available onsite.

Customer Service
Unit (5e4), Signals
Reports (2a2, 2a3)

Questions in the
local EMS (3a1)
are used to review
INSITE.
Sales via Website
(6b6)

5.

Processes, Products & Services

The GPL Process Model is shown below. This has supported the organisational restructure, providing clarity on who
does what.

The UK market itself can be considered asmature and the audience with whom we interface conservative and
traditional. This brings both benefits and challenges for us. Benefits include being a very well established brand in the
HVAC market for both Domestic and Commercial markets. However, this works against us in the Wastewater market,
where companies more traditionally associated as specialist WW suppliers, have a larger share. Another challenge is
the very slow take-up of e-products in the UK (especially within the domestic sector only 7% at June 2011), partly
due to a lack of clarity, support and commitment from the UK Government, who continue to ignore the known benefits
that variable speed pumps offer despite our employing the services of a government lobbyist and actively encouraging
take up through our membership of the BPMA. We promote the benefits via the installer and merchant base, as well as
focussing on the actual end-user. However, this is a challenge we are focussed on and resolve to conquer before EuP
legislation forces the change which could result in damaging our market dominance within the HVAC sectors.
Although there is an Account Manager is place for Key Customers, our Account Management Model is set up to
achieve multiple contact points between our Sales Teams and the customer, rather than a single point of contact. This
provides additional information and insights, creating additional sales opportunities and identification of emerging
needs. These are fed back to the Account Manager and used in the Account Review process. It also ensures continuity
of the relationship if an individual leaves one of the parties involved.

Title

Description

Evidence

Linkages & Key

5a1

Business Process
Model

5a2

Process
Management
System

5a3

Improvement
Project Teams

5b1

Product
Development
Planning

5b2

Customer Terms
& Conditions

5b3

Product
Improvement

5c1

Marketing
Campaigns

5c2

Sales Excellence
Program

5c3

Promotion
through Training

Title

As part of the strategic planning process, we

review our Business Process Model to ensure
we have the process in place required to
deliver our strategy.(not needed as covered in
5a2)
Our Business Process Model and supporting
work instructions are published on INSITE.
They have been externally certified to the
ISO9001 standard since 2004.
When improvements are identified, they are
classified as JDI (Just Do IT) or requiring an
Improvement Project Team to be established.
Improvement Projects require additional
resources (cross-functional), time (>3months)
or finances to be completed and are proposed
at the QMM for approval. They projects are
supported by 6 people trained to Six Sigma
black belt standard.
Regular meetings with GBW are held to review
product
development
against
market
requirements and competitor offerings. We
provide insights on customer requirements to
determine specifications and influence the
product launch schedule.
The Terms & Conditions include servicing and
after-sales support options, which we manage.
These are discussed at the annual account
review. We have developed an innovative
combination of chargeable services, which are
now being developed for global deployment by
Group.
Feedback from customers is discussed at the
quarterly meetings with GBW. Improvements
can be implemented within these facilities.
Innovations are feedback to Group R&D.
We develop an annual marketing plan,
including associated budgets and targets, to
effectively target the defined customer
segments. We use trade exhibitions, news,
advertising and PR activities.
Sales Excellence is a holistic assessment tool,
based on the EFQM Model, which measures
the maturity of our sales capabilities and drives
continuous improvement. The assessment is
completed annually and progress on the action
plans is reviewed at the QMM.
In addition to training CHS engineers as part of
this partnership (see p8); we use a similar
approach for our dealers, distributors and other
customer groups to raise awareness of product
features, advantages and uses. This training
can either be delivered at specific events or
remotely, via our eLearning platform.
Description

Available
The Business
Process Model can
be explained onsite.

Results
Process
Management
System (5a2)

Audit reports are

available on-site

ISO9001
Certification

Project Plans are

available on-site;
JDI activities are
included in
internal audit
reports.

Projects
Completed (9b6)

Minutes
from
these
meetings
are available onsite.

New Market Sales

(9a5)

Details of the
servicing options
can be explained
by our Sales
Teams.

Customers with
Service Contract
(6b3), After Sales
Support (6a6)

Minutes from
these meetings
are available onsite.
Examples of
campaigns can be
explained by our
Marketing Teams.

Event Driven
Surveys (5e2),
Warranty Process
(5e3)
New Market Sales
(9a5), Share of
Voice (8a5)

The assessments
and resulting
action plans for
each sales area
are available on
INSITE.
The on-line
training platform
can be
demonstrated onsite.

Sales People (6a4)

Evidence
Available

Linkages & Key

Results

Registered
eLearning Users
(6b2)

5d1

Supply Chain
Management

5d2

Customer
Segmentation

5d3

Webshop Sales

5d4

Logistics Planning

5d5

Service Contracts

5e1

ECSS Survey

5e2

Event Driven
Surveys

5e3

Warranty Process

5e4

Customer Service
Unit

We produce monthly, quarterly and annual

sales forecasts, to enable effective production
planning at GBW. These are reviewed at the
quarterly Supply Chain Meeting.
This
determines our stock allocation. The end to
end review in 2011 transferred the costs of
excess virtual stocks from the factory to the
sales company.
We have segmented customer groups, aligned
to the different sales divisions in our
organisational structure. Marketing activities
are planned and coordinated by our Marketing
Team. The Sales Teams meet monthly to
review progress against their annual action
plans and targets, reported via scorecards on
Business Warehouse.
We have developed our webshop sales
capability specifically for the indirect domestic
market. We improved this service in 2011 and
have seen a significant increase in usage. The
platform has a direct interface with SAP.
Our SAP system interfaces directly with the
production units, enabling real-time stock
allocation and lead-time confirmation. Orders
can be input by our Sales Teams, Back Office or
directly via the webshop.
Over the past 5 years, we have built up our
servicing business, especially in the Commercial
Business Sector. These are managed with our
Servicing Partner, GEE.
This is a bi-annual survey run by Group every 2
years. In 2008, it was extended from Europe to
a Global survey. We analyse the results and
produce action plans, which are logged on the
Group Database.
In addition to the Group ECSS Survey, we run a
number of on-line event driven surveys, aligned
to our key processes. These include Sales,
Order Processing and Servicing.
Our products carry 3, 5 or 10 year warranties,
depending on the size and function. Any
failures are reported, via our servicing partners,
to the original manufacturing unit and Group to
identify potential systematic failures.
The Customer Service Unit was established in
2010 to analyse all available data, drive process
improvements and develop new market
opportunities.

Minutes from
these meetings
are available onsite.

Stock Holding
(9b6)

The Team Action

Plans and
scorecards can be
reviewed on-site.

Market Share
(9a3, 9a4), Sales
Turnover (9a5,
9b3, 9b4)

The on-line sales

interface can be
demonstrated onsite.

Sales via Website

(6b6)

The process can

be demonstrated
on-site.

On-Time Delivery
(6b1), Order
Handling &
Delivery (6a5)

The processes can

be explained
during the site
visit.
Resulting Action
Plans can be
explained during
the site visit.

First Time Fix Rate

(6b4), After Sales
Support (6a6)
Customer
Perceptions (6a)

Additional
Perception results
available on-site.

Customer Service
Unit (5e4)

The process is fully

documented and
can be explained
during the site
visit.
The CSU Database
has been
developed to
support this team.

Warranty Rate
(6b3)

New Market Sales

(9a5)

6.

Customer Results

Through the use of the Strategy Map concept, we have been able to establish links between the internal process
perspective, the customer perspective and the overall business outcomes. This enables us to focus improvement actions
on the key processes which ultimately
drive the desired result; strengthening
our market share.
The addition of the Customer Service
Unit (CSU) in 2010 has strengthened
this understanding. They support the
analysis within the different Divisions,
helping them to understand these cause
and effect relationships and maximise
the impact of their improvement
projects and initiatives.
The Event Driven Surveys, which are
aligned to our key processes, provide
specific
feedback
to
drive
improvement. These are sent within 1
month of a specific event, for example,
a service visit, and the questions focus
on that specific experience. Sending the survey shortly after the event allows the customer to provide accurate
feedback, whilst it is still fresh in their mind. The data, both numerical and free text comments, from these surveys can
be segmented by customer group, as well as by process.
The bi-annual ECSS Survey, which is run at a global level by Grundfos Group, provides an overview of the customer
experience. The loyalty and image indices, which reflect the customers intention to repurchase, are leading indicators
for our future sales and market share. Targets are set at Group level. The survey enables benchmarking between
different Sales Companies in the Group, allowing us to compare our performance with others. From this comparison,
we identify which Sales Companies we would like to learn from. The Grundfos Business Excellence Cross-Company
assessments provide us with an ideal opportunity to visit these companies and really understand the approaches and
processes that are driving their results. All our Management Team and Senior Managers have attended the Grundfos
Internal Assessor Training and volunteer to participate in these assessments. The learning they bring back is discussed
at the QMM and improvement actions or projects agreed.

6a. Perception Measures

The Customer Image Index (6a1), Customer Loyalty Index (6a2) and Customer Satisfaction Index (6a3) are composites
of a number of different questions in the survey. These are the key measures used by Grundfos Group to compare
performance. Targets are set at Group level each year.

We compare our performance with Grundfos DK as they are considered the flagship sales company within the
Group. A number of our Management Team have been personally involved in Cross Company assessments in the last
5 years, which provides a unique opportunity to understand their approaches to managing customer relationships.

We continue to improve perception of our 3 core processes; Sales, Order Handling and After Sales Support. In the
ECSS 2010 survey,we were able to add local specific questions; 2 were aligned to gain feedback on service, used to
review performance with our service partner, GEE (see 6b4).

6b. Performance Indicators

The On-Time Delivery (6b1) measures whether we deliver what is promised, when it was promised at the point of
ordering. The 95% target represents the service level agreement with GBW and the supply chain. Our event driven
survey indicates there is minimal impact on customer satisfaction if we keep them informed when potential delays
occur. The ECSS results support this (see 6a5). Despite the reduction in Stock Holding (see 9b5), our On-Time Delivery
has increased following the end-to-end supply chain process review. The growth of our service business (6b2) is key
driver of the growth in the Commercial market (9b4) and some of the new business (9a5).

The Warranty Rate (6b3) indicates product failures within the warranty period, whether this is fixed by an engineer or
not. Information about the failure is fed back to the original manufacturing unit and collated at Site and Group level
to identify potential issues with either a specific batch or a product line. The First Time Fix Rate (6b4) is used to
monitor performance of our servicing partner, GEE (see 4a2). Again, the target reflects the service level agreement.

Our website provides information, training and a sales portal for the indirect sales channel. We have been promoting
the eLearning platform to this group of customers since it was launched in 2009 and have seen a year on year growth
in its usage (6b5). Following the launch of the updated webshop in 2011, we have seen sales steadily increasing
through this channel (6b6) and our now considered as best in group.

7.

People Results

At Grundfos, we believe there is a virtuous circle that links business performance. If we have motivated, engaged
people, they will strive to deliver the highest possible levels of customer service. If customers receive an exceptional
service, they will repurchase themselves and they will recommend Grundfos to others. If more people are buying
Grundfos products, our business will grow. As Grundfos has no shareholders, any profit is invested in our future; new
product development, training our people and developing our organisational capabilities.

Once this cycle is established, it builds momentum. In Grundfos UK, we have built our future on the skills and talent of
our people. We invest in their development, both through formal training and on the job development opportunities,
such as involvement in improvement projects. Our people actively seek additional responsibilities and contribute their
ideas, through the FISH Suggestion Scheme, on how we can further strengthen our organisation.

7a. Perception Measures

The Employee Motivation Survey is conducted every 2 years (ref. 3a.1) and is used to determine our people
satisfaction in GPL. Economic conditions during 2009 & 2010, and the subsequent impact on Grundfos, led to a
number of aggressive cost reduction measures, including a recruitment freeze, pay freeze, benefits reduced, company
restructure and staff redundancies. These combined factors play a major role in the decline in the results in 2010,
which was also observed in the majority of Grundfos companies. We have implemented a number of improvements
since, which have contributed to the increase observed in most areas in 2012.

Targets guidelines had been communicated by Group to all companies in 2009; these targets state all companies
should be achieving satisfaction levels of 80% by 2014. For some of the key areas, including Top Management,
Following Up on EDD and Setting Clear Objectives, we have set targets increasing to 85%.

We have focused on reducing the differences between the Office & Field Based staff, especially regarding deployment
of target setting and the EDD (3a3 and 7b5). We encourage our people to join Project Teams (3c1) to drive
incremental and step-changes (7a6). Grundfos DK (Denmark) is chosen as the comparator as it is the highest scoring
Grundfos Sales company other than Grundfos UK.

7b. Performance Indicators

The Skills Gap Analysis (3a2) is vital to understanding where training & development are required to achieve strategic
th
goals. We aim to have fully closed this gap by the 4 year of the strategic plan. As a small company, opportunities for
promotion are limited. However, there are opportunities for people to be promoted within Grundfos Group and we
actively encourage this career development pathway (3b3). Although Total Employee Turnover sometimes exceeds
the target of 6%, this is only when there are a high number of promotions within the Grundfos Group but outside GPL.

Management encourage innovation through our FISH suggestions scheme (7b3). A number of ideas have been
implemented and in 2011 one employees idea was shortlisted in the Future Innovations award by Group. The
suggestion scheme was updated and relaunched in 2011 with points make prizes including new format for assessment
of ideas via QMM, this resulted in increased engagement. The Employee of the Quarter scheme (7b4) is designed to
recognise outstanding achievements. We expect to receive around 10 nominations per quarter and encourage all
directors to ensure there is at least one nomination from their division each quarter.

The Employee Development Dialogue (3b2) and Annual Conference (2d2) are key to engaging and empowering our
people. We measure completion of the agreed training & development plans (7b5) and conference attendance (7b6).
We have focused on improving the deployment of these approaches for Field Based staff in the last 3 years.

8.

Society Results

In 2009, as part of the development of the strategy, we completed a stakeholder mapping exercise. In 2010, we
identified our approach to managing external stakeholders as one of the improvement projects from our self-assessment.
As part of this project the improvement team reviewed and updated this map. We then completed an exercise to
determine the communication requirements and ownership of each of these stakeholder groups. This process ensures
we maintain a dialogue with the key stakeholders, with defined channels and meetings.

One of the actions was to establish feedback mechanisms for the society stakeholders identified. In October 2010, we
launched the first Pump Industry CSR Survey to gather feedback from the industry and trade associations we work
with. The short, on-line survey was distributed via email. The survey focuses on the topics we promote through these
groups; environmental issues and influencing policy makers. We included the question Do you see Grundfos as the
industry leader for corporate responsibility? (see 8a4) to give us an indication of how we compare with our
competitors as benchmark data in this area is not available.

8a. Perception Measures

In 2010 we ran the first Pump Industry CSR Survey, targeting the trade & industry associations who we work with on a
regular basis. The data collected is used to highlight specific areas of interest within these groups, especially through
the free-comments sections, as well as give us feedback on how were perceived.

In 2011, we lead an industry working group to highlight the requirements under the EuP legislation and raise
awareness, both with the local government and within wholesalers. The legislation is designed to promote high
efficiency, low consumption pumps. The campaign we coordinated was highlighted in the survey as both informative
and appreciated.

The Share of Voice measure (8a5) is used to monitor the impact of our press releases and other PR activities. We
target a 65% share of all pump mentions in the national press and trade magazines. This helps increase our profile
and brand image as a trustworthy, reliable company. This is also one of the reasons we apply to external awards
(8a6), although there are a number of other benefits, including staff motivation and recognition.

8b. Performance Indicators

We have 4 key environmental indicators, which are shown here. In 2008, we set targets of a 2% reduction per year,
with the aim of reducing our total environmental impact by 20% by 2020. Waste management is a fundamental part
of our Environmental Management System (4c2).

Both Energy Consumption (8b3) and Water Consumption (8b4) increased in 2010; this was mainly because the 2009
figure was exceptionally low due to reduced workload. Since then was have brought the trends back in line with
target, partly due to 3 FISH suggestions which were implemented in 2011 & 2012.

The Walk to Work programme was extended to encourage cycling to work, following a suggestion through the FISH
ideas scheme. The total number of participants has increased, although a number of those who were walking now
choose to cycle instead (see 8a5). Employee Donations are collected through the UK Government Payroll Giving
program (8b6). The amount pledged reduced in 2012 when the Government removed the tax-free status of this
scheme. We are currently investigating other tax-efficient mechanisms for charitable donations.

9. Business Results
10.
For our strategic plan, we develop a Strategy Map. The Annual Performance Scorecard is derived from this; translating
the high level themes into specific annual actions and objectives. The overall themes remain the same for the 5 year
period covered by the plan. However, the actions and objectives beneath each are reviewed annually and may change
as we progress, especially in the lower quadrants.

GrundfosPumps Ltd. Strategy Map (2010 to 2014)

The monthly KPIs are compiled and discussed during the team meetings before being reviewed at the Monthly
Management Meetings (1b1), with supporting commentary and explanations from the relevant teams. The full
scorecard is collated quarterly and reviewed at the Quarterly Management Meeting (1d1). This includes progress
reports from the Development Projects (1e3).

9a. Business Outcomes

Our Turnover (9a1) and Pre-Tax Profit (9a2) have recovered since the economic downturn began in 2008. This heavily
impacted sales in 2009 but has since recovered, in line with the targets set by Group. The standard Group Target for
Pre-Tax Profit is 10% of turnover; we are achieving this and are currently amongst the top 3 performing Sales
Companies in the Grundfos Group.

In 2008 and 2009, we noticed increased price sensitivity in the Domestic (9a3) and Commercial (9a4) markets. Instead
of competing on price, we focused on reinforcing the quality and reliability of our products through marketing
campaigns. We succeeded in increasing our domestic market share back over 70% in 2010 and have since maintained
this impressive share.

To achieve our growth targets, we need to develop new markets (9a5). We have increased the percentage of total
turnover coming from these new markets from under 5% in 2009 to nearly 9% in 2012. We are on target to achieve
our target of 10% turnover from new markets by 2013. During the financial crisis, we had to increase our focus on
credit control (4b2). The key measure we use to track the effectiveness of this process is the Days Sales Outstanding
(9b5). We have now brought this process back under control.

9b. Business Performance Indicators

Through the financial crisis, we have focused on reducing expenses where possible, without compromising our sales or
servicing activities. Around 65% of our total costs are our Cost to Serve (9b2), including payroll, vehicles, equipment
and buildings, and the budget is calculated on this basis. In 2009, we were below budget as fewer people met their
sales targets; in 2012 we had the opposite.

We expect limited growth in the mature, domestic market (9b3). This is reflected in the flatter target, especially
compared to our ambitious growth targets (9a1). We expect to be able to continue to increase sales in the
commercial market as we move into project solutions and servicing in this area (9a4). Both markets are generating
turnover in line with our budget.

Targets for Development Project Completion (9b6) are tracked via the Annual Performance Scorecard. One project
over-ran in 2010 and completed in Q1 2011. We do not set targets for improvement projects as these are not part of
the annual planning process.