Last year was an eventful one for L&T. It was a good year by many measures but, at the same time, it was heavy and challenging. In spite of the difficult market climate, we achieved a good result, saw a significant reduction in sickness-related absences, improved customer satisfaction and accomplished great results on our path of renewal.
These results would not have been possible without our highly competent and service-oriented personnel. I want to take this opportunity to extend my warmest thanks to everyone at L&T for their good work in 2016.
Our journey of change requires flexibility and agility
The year 2016 was in many ways similar to the previous few years. The business environment is in constant flux and the rate of change is accelerating further. While there are small signs of an upturn in the air, economic recovery will take a long time. This means that achieving growth requires finding new ideas to replace the old and traditional ones. These operating conditions further underscore the significance of renewal in all of our businesses.
In a business environment that is increasingly difficult to predict, we must have the flexibility to adapt to the ongoing changes. Late in the year, we held statutory employer–employee negotiations to implement important adjustments that increase the speed and agility of our decision-making. The Group and divisional structures were clarified, decision-making power was shifted to the business level and we increased our investments in the renewal of our business.
A good year by many measures
Continuously improving the safety of our operations and the work ability of our personnel are important objectives for us. Our accident frequency increased slightly after several years of successfully reducing it, but I am confident that we will shape up and get back on track. I am particularly pleased by the fact that our sickness-related absences declined significantly in 2016 and our average retirement age rose to 63.8 years.
Two things that are equally important: customer satisfaction and occupational safety.
The most important thing is that they are both excellent.
The renewal of our business continued at a fast pace and we achieved strong results on that front. Our new digital services were well received, our Hävikkimestari mobile app for managing and reducing food wastage in catering restaurants won an award from the Helsinki Climate Partners network, and our driving style monitoring received a Best IoT of the Year award.
Our Net Promoter Score, which measures customer satisfaction, improved from the previous year and the number of complaints decreased. We signed significant new service agreements in the latter part of the year, which will help us achieve our growth targets in 2017.
Implementing the largest-ever change in our operating model
In order to maintain our capacity for strong financial performance, we must continue our efforts to improve productivity. In 2016, we continued the systematic implementation of our strategic development programmes aimed at improving productivity.
In 2017, we will begin to carry out in earnest the largest-ever change in our operating model, including the country-wide implementation of the Facility Services division’s new ERP system in property maintenance and cleaning services. This will benefit our personnel and customers in the form of even more consistent service quality and systematic action.
Customer and employee experience at the core of our strategy
When you are improving productivity, it is especially important to maintain a positive mood and also to keep focusing on the customer.
Satisfied customers are the key to our future success, which is why we have made the customer experience a core component of our strategy. We develop our customer experience by becoming even better at listening to our customers’ needs and by focusing on day-to-day development. Together with our employees, we agree on concrete and quantifiable customer promises and we do what we promise to do. In 2017, we will also evaluate our strategy through the eyes of our customers and via our various customer segments.
Recognising that a good customer experience is created through a good employee experience, we have established a close link between enhancing the employee experience and improving the customer experience.
Maintaining a good energy level and mood among personnel requires determined efforts to develop managerial work, a strong sense of community and trust. We have engaged our personnel extensively in our efforts to develop the customer and employee experience. This work will continue with a national Virettämö workshop tour, which a large group of L&T employees will be invited to join.
Less is more
In the long run, the requirements for material, energy and cost efficiency will grow further, which will lead to increased demand for our services. The shift to the bioeconomy and circular economy will boost the demand for renewable bioenergy and secondary raw materials but, above all, it will create a wealth of new service opportunities. We want to be a key player in these growing markets. L&T is an enabler of the bioeconomy and circular economy, and our role is to help our customers renew their operations to match the increasingly strict regulatory requirements.
We are faced with a transformation of our business environment, but we hold the keys in our hands. The crucial thing now is to bring our strategy to life in a way that our customers will notice. I believe in our team and our ability to put our plans into action. Our role at the senior management level is to create the conditions for realising these plans and to point a clear common direction for the company.
President and CEO