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LED Technology: A Shining Example of Transformation

by Natascha Zeljko

LED technology has long since disrupted the lighting industry. Dr Sandra von Möller, managing director of BÄRO, on the special challenges facing this industry and the qualities that entrepreneurs need to reinvent themselves time and again

Let’s shed some light on the matter: Bäro manufactures lighting systems, mainly for the retail sector. Could you give a few examples?

We develop and produce lights, create lighting concepts, do the technical planning, and take care of the installation of the lights. In short, we offer our customers complete lighting solutions worldwide. Our main focus is in the food retail market. For that we work with special light colors that are designed for specific areas of application such as fresh food, for example, which optimally accentuates the inherent colors of these products as well as their freshness and quality. We focus on energy efficiency so that we can achieve optimum lighting even with low wattages.

The business model has changed dramatically as a result of LED technology. Longer shelf life is good for the customer, but for you it means that part of the business is lost. How do you compensate for that?

The switch to LED was the big innovation for us; a disruptive technological change that completely changed the whole industry. What has increasingly disappeared since then is the so-called catch-up business. When our sales force used to go to the customer, they also sold light sources at the same time. That’s no longer the case with LEDs. The LED is firmly installed in the luminaire and must be for effective thermal management to ensure its service life. At the same time, we have opened up new business areas and are now increasingly pushing into the non-food and private interior sectors. This would not have been possible in the past with discharge lamps, because they take ten minutes to start up again after being switched off and on again.

In addition, we have also put a lot of emphasis on design in recent years and have meanwhile won several awards; in 2017, for example, the German Design Award and the Red Dot Award, and we have also been nominated for the Luminaire of the Year 2019 and again for the German Design Award. In addition, LED-based lighting solutions can be used with sensors and lighting control systems to program scenarios that vary the appearance of an object or surface depending on the time of day or frequency, for example. By the way, this helps us both in our classic segment as well – the demands on design have risen significantly in recent years. When you look at the way supermarkets are now equipped, it’s impressive: real food temples have emerged.

“The demands on design have risen significantly in recent years. When you look at the way supermarkets are now equipped, it’s impressive: real food temples have emerged”

How much has this changed your company from the inside out, also in terms of employees and processes?

We used to have relatively long innovation cycles. Once developed, a luminaire could be sold for a good ten years or longer. This changed dramatically with the switch to LED. The cycle is now much shorter – there are constant improvements as far as LED chips and drivers are concerned. As a result, the employee structure has changed; for example, we have significantly increased the quality and quantity of our R&D department.

Our sales department also had to be set up differently, with completely different knowledge, because our products are now much more complex and technically demanding. For us as an established company with a 52-year history, this was a turning point. People had to decide whether they wanted to go with us or not. Many wanted to, some didn’t. The generation change also helped us a little: employees retired, at the same time. That’s how we rejuvenated ourselves.

How strong is the competitive pressure?

It’s enormous. Through online trading, many suppliers from outside the industry are now forcing their way into our core business, i.e. food retailing. And we are a medium-sized company that partly competes with large corporations. It’s not always easy. Price pressure is fierce, especially from China. For us, however, there is a clear distinguishing feature: we sell German engineering art. Our luminaires are manufactured in Germany, the most important luminaire components come from Germany or Europe. Although we also typically purchase LED chips from Asia, we often rework them here in Germany. In short: our products are ‘Made in Germany’. Or at least ‘Made in Europe’.

To what extent has digitalization fundamentally changed your business?

In every respect; it starts with the product, continues with our customers, but also includes employees and internal processes. Just one example: it was only a few years ago that we were still working with paper, filling out order slips, carrying them through the departments and then entering them into the system in a cumbersome and slow manner. Unthinkable today. Now, of course, everything has been digitized. And digitalization also has an influence on our personnel structure. Although there are still hierarchies and a classic organization chart, we are increasingly thinking in terms of processes.

How do you reinvent yourself as a company? Where do you get your ideas or inspiration from?

We focus strongly on diversity, on diverse teams. It already starts with the fact that my husband and I run the company together. We are very different and lead accordingly also differently, therefore we must often pull ourselves together. I bring many impulses with me through my voluntary commitment to the Chamber of Industry and Commerce (IHK), as vice president and chairwoman of the Working Group on Diversity and the Legal Affairs Committee. We are also involved in relevant associations and specialist committees.

Above all, we work a lot with universities and have joint research projects. This is very important in order to stay up to date technologically and to see what is possible – and many things are possible. To capture data or motion profiles or to integrate cameras, for example. The question here is also: what does the customer want or what could he want in the future, what makes sense, and what is ethically justifiable? And we are often at trade fairs, as exhibitors, but of course we also look around: what do the others do? What are the trends in technology and design?

What’s the biggest challenge?

The biggest challenge is certainly human resources, finding and retaining talent. This applies to almost all companies, because you are in international competition. In addition, today you have to constantly question your business model. I see the greatest danger in another company coming with a disruptive innovation. This doesn’t even have to be technically incredibly sophisticated, but a business model that suddenly takes away the added value. You just have to be extremely sensitive, think, and think ahead. What else can you possibly offer, what could possibly result from the business?

“The biggest challenge is certainly human resources, finding and retaining talent”

 You are a lawyer. For you, the subject of light and lighting technology is comparatively new. You have familiarized yourself with a completely new field. What do you like about it?

I like the challenge. As a young lawyer, I have already familiarized myself with a completely new field for me, international tax law, and then worked as a specialist lawyer for tax law in a large international law firm, where I dealt with tax issues such as IPOs and M&A transactions. But actually it was always my dream to have my own company. After my husband bought BÄRO 14 years ago, it was my chance to join in. What still excites me is the broad spectrum and abundance of tasks and topics. To be responsible for all areas, from development to production, from sales to installation and maintenance. Light is also a wonderful product – emotional and inspiring. 

What are the most important projects for the future?

We want to remain a technology leader. For this we need a motivated and qualified team. That’s why we offer training, further education, more flexible working hours, and measures to reconcile family and career. We also focus on sustainability – from energy efficiency to avoiding plastic packaging and assuming social responsibility. And we must remain dynamic so that we are not suddenly overwhelmed by another company. I recently read that the average service life of German companies is around 10 years. In order to survive in the long term, you have to reinvent yourself again and again and get your employees excited about future issues. What is becoming more important for our company is global business. We already have six subsidiaries abroad and sell in 34 countries. We want to significantly strengthen this over the next few years.

“If diversity is not lived from the top, but only parked with a diversity officer, you will hardly be successful in the future”

How far in advance can you even plan? Or to put it another way: how flexible do you have to stay?

In my opinion, concrete planning is only possible for the next one to two years. Incidentally, I am convinced that the company will have changed completely in ten years, without me being able to say today in which direction. Of course, you have to work out strategies, but they are only correct from the current perspective. You can’t cling to a concept at any price if the market demands maximum flexibility. But what you can say with certainty: if you don’t take innovation, digitization, sustainability and diversity seriously, you will fail. And if diversity is not lived from the top, but only parked with a diversity officer, you will hardly be successful in the future.

BÄRO is hiring: For details click here