Johnson Controls Seeks to Meet Changing Customer Demands

The discussion was moderated by Jenny Stentz, area vice president, Johnson Controls Building Solutions North America, and featured expert commentary by four Johnson Controls executives:

• George Oliver, chairman/chief executive officer
• Mike Ellis, executive vice president, chief customer and digital officer
• Rod Rushing, president, Building Solutions North America
• Joe Oliveri, vice president/general manager, global ducted systems.

"Our world is changing; we are in an era of change," said Stentz as she introduced the panelists. "Our customers are talking about this everywhere we go, and customers are pushing the limits of what is possible. Our Johnson Controls leadership is here to talk about what that means to the industry and to Johnson Controls"

George Oliver said changing customer demands is providing Johnson Controls with opportunities to provide leadership. He identified three trends he has observed during his global travel, most recently during his participation in the Davos World Economic Forum: decarbonization, electrification and digitalization. He then spoke at length on digitization.

"Digitization is happening in every industry, CEOs around the globe speak of disruption across all industries. When you engage with customers and learn their digitization strategies, you ask how you can align your strategies to help them achieve their visions and priorities. It’s fascinating and real, and when you look at what we do, not only in our leading equipment, but in combination with all of the digital capabilities. The two combined is what ultimately drives the outcomes our customers are looking for and want to achieve relative to their digital strategies. It’s dynamic, fast-paced and over the next couple of days I hope you get a sense of what we’re doing in Johnson Controls to drive and build the safest, most secure infrastructure in the world."

After his first 100 days into his role as executive vice president and chief customer and digital officer, Mike Ellis said he couldn't be more excited about being part of the Johnson Controls team. Stentz said Ellis was brought on board to help Johnson Controls be more aware of how it too could be disrupted, and what it will take to understand the changing needs of Johnson Controls customers. 

"Everybody in this room understands the idea of the smart intelligent building and smart spaces. It’s been talked about for many years. But the realities are, that the technology is here today, at a cost-price analysis and impact that we can deploy in interesting ways," Ellis said. "What that means, and what we’re hearing from customers — those who are owners and those who are occupying the buildings — is that they want to make a difference. They want to create differentiation for their spaces, their buildings, around experience, comfort, capabilities, and security. And they want to bring that together in a unique way that actually differentiates the value that they drive as owners of a building, or as tenants. This digitization theme is important to our customers and to Johnson Controls, in terms of how we deploy that technology. We want to make it easier and seamless to deploy, with respect and responsibility and trust related to privacy and consent around data."

Rod Rushing has been leading a team dedicated to customer innovation. Stentz asked him to describe how Johnson Controls is seeking to create more value from the insights it has uncovered related to customer demands.  

"Customer innovation sessions are helping us develop solutions for their needs," Rushing said. "Certain customers are early adopters, and we meet to talk about performance, and what their objectives are for their businesses, and how we can design technology around their use cases, to generate outcomes that benefit what they’re trying to achieve by making capital investments.

"They want to know how Johnson Controls technology can work for them. 'What can I do up front that will allow me to operate, maintain and ultimately effect the performance of the building, to achieve the outcomes I’m looking for?' Our role is to facilitate that, and work with them. It’s good for Johnson Controls, because we have an opportunity for co-development. We learn, as we work alongside our customers in these vertical markets, and that drives our development forward," Rushing said. 

Speaking to the world of changing expectations and consumer demand, Joe Oliveri said customers are demanding increased control of their environment through smart technologies.

Speaking to the world of changing expectations and consumer demand, Joe Oliveri said customers are demanding increased control of their environment through smart technologies.

"They’re very aware of their environments, and they’re searching for solutions that minimize energy usage and environmental impact," Oliveri said. "Consumers are very smart, and are seeking opportunities to save money and do better for the environment. For example, the Department Energy did a study that showed smart building technologies combined with zoning systems can save up to 35 percent of a home’s energy. Our booth has demonstrations of our HX zoning system that can control up to eight zones deliver optimal comfort and efficiency in your home. This application also helps the contractor monitor the home performance in real time. If there’s a problem with performance, they can take action."

Digital innovations are helping Johnson Controls anticipate customer needs. Stentz asked George Oliver to describe how Johnson Controls is leading the way, and making the proper investments that make it possible to anticipate customer needs. 

"If you look at the merger we completed [with Tyco] three years ago, it was along these lines. We felt that first, we had to develop leading products, but also converge and integrate all the digital assets in a building, manage the data off of those assets, and utilize that data, whether it’s applying machine learning or artificial intelligent that is truly going to create new outcomes.

"Historically, in a building you have seven or eight stand-alone systems that don’t integrate or communicate, and you have to solve separate problems. Now, we believe that we not only do we create a simplified architecture within the building that allows us to easily integrate those digital assets, but more importantly to utilize the data, whether it be pushing that intelligence to ‘the edge,’ and managing data at the edge, or will we have to combine multiple streams of data and then create new outcomes.? Along those lines, as we work on converging Johnson Controls and Tyco digital capabilities, and how to develop capabilities around storage and cleansing of data, and creating new applications, we truly believe that because of that infrastructure, no matter what vertical market or customer we’re serving, we’ll be able to have the infrastructure to be able to meet their needs and deliver on their capabilities.

“We’ve been investing in our digital capabilities and converging those capabilities from a platform standpoint. We’ve also been deploying resources around artificial intelligence and machine learning, and then managing that data to be aligned to work with our customers. That reinvestment has been significant since the merger three years ago,” Oliver continued.

“We also realize that the industry is under disruption. Disruption usually starts at the top. And as Rod said, many of our engagements have been with end-user customers: understanding their missions, what they’re trying to achieve. Then, how do we take our product leadership and digital assets, our experience in managing data, and do it in a secure fashion and ultimately create outcomes. That’s the journey we’ve been on.

“When you get disruption from the top, sharing the vision and then ultimately becoming a partner with our customers to be able to deliver on their mission is where we’ve been successful.” 

Joe Oliveri said a portion of recent Johnson Controls investments were dedicated to renovating Johnson Controls Rooftop Center of Excellence in Norman, OK.

“We’ve invested a significant amount of money in our Rooftop Center of Excellence, which was awarded an Industry Week ‘Best Plant Award’ in 2019. We’ve opened a new training center there and have made significant investments in our customer platform, with our state-of-the-art Navigator platform.  We’ve invested in process, people and technology. The facility is a must-see.” 

Watch for more from this discussion in our final show review in print and online.