Cummins designs, manufactures, and distributes engines, filtration, and power generation products. What were some of the takeaways following the panel, which focused on seeking innovation through external channels and partnerships?
“Even in our session, with Eric and myself talking about it, it was so much about we can’t do everything ourselves,” says Jaithwa. “We have to understand that the market is evolving faster than what it used to be. In the energy industry, it’s all about decarbonization right now. The perception is we are an engine manufacturing company. But if you think about it, we just made a pretty big announcement of creating a company which is focused on new growth areas. It’s not a short-term goal. It’s pretty significant and that’s exactly what we were trying talk about in the panel about how we see innovation, how we see innovation disrupting our industry, and how we see innovation being on the front foot of everything that we do.”
He continues, “The way I like to describe this question is understanding our strengths and weaknesses as a company. We are pretty big from a size perspective, our customers have certain expectations when they hear the word Cummins for anybody in the energy industry. We are going towards net zero growth and we are helping customers achieve their net zero and decarbonization goals. When we talk about innovation, when we talk about expanding our reach, the principles that are critical is understanding where we stand strong as a company and what our weakness is.”
As for weaknesses, or gaps, acquisitions play a key role in supplementing what the company sees as a potential weakness. For example, Jaithwa points out, “There are things that we think we want to get to diversify our markets, for example, hydrogenics. We acquired multiple battery companies. We acquired hydrogen fuel cell companies. We could have put down many engineers and started to figure out things ourselves, but that wasn’t the right path. The goal was to find the right solution in the market, figure out if that’s right for us as a company, then find the right company, and then double down on internal integration, because then we can go to the market faster.”
Internal integration is where the rubber hits the road. Mergers, acquisitions, venture capital, partnerships, there are many different paths that one could follow. How can a company enhance that integration ability? The answer might be different, depending on the culture and leadership, Jaithwa points out.
“Every company has a different culture to it. And based on the culture and based on the person who’s leading the company at that point of time, a lot of these questions are answered accordingly,” Jaithwa observes. “When we acquired these technologies, we knew as a company, it’s not going to pick up in the next two years. It’s not a short-term play. It’s a mid-term to long-term play. The approach there from an integration internally is very different. Or so the team gets everything that they need to be separated out from the company itself and have the flexibility to draw an experiment play and not be measured by the same metrics of revenue and EBITDA.”
Integrating innovation might also come about by talking to customers and changing one’s mindset depending upon their needs. Companies both large and small are looking at ways to minimize their carbon footprint, for example.
Jaithwa says, “It’s not a simple question, because now you’re changing your whole mindset of powering your facility from utility and diesel or natural gas to saying, I want batteries, I want hydrogen, I want solar, I want like 15 things. How would you do it? So that’s why it’s a mix of a short term, medium term, and long-term play, and the integration internally depends on where we are playing and at what time cycle.”
Check out the full video from FEI for the conversation between Adler and Jaithwa, as they discuss themes such net zero, decarbonization, sustainability, hydrogen technology—and perhaps most importantly, adapting to change.