Staying on the Line

Magnus Ekerot has always been blessed with what he describes as an entrepreneurial streak. While his career path has led him in a number of different directions, the one thing that has remained constant throughout has been a zest for transformation.

It’s a characteristic that has proven its worth during his time in a number of C-level positions, as he built profitable, rapid-growth companies. It’s also one that drove him to take on the position of CEO at telecommunications firm Gigaset in January 2023.

“I believed at that time, and I still believe, that Gigaset has the opportunity to make a transformation technology-wise and culture-wise,” says Ekerot, who also holds a PhD in Strategic Management from Germany’s Ludwig-Maximilians-Universität München.

“Somewhere along the line, I found that I believed that this could be a hidden gem.”

“We need to change our way of working, from being a large company that sells traditional products and has a traditional way of thinking to a mid-size entrepreneurial, fast-moving company.”

At the outset, he identified three key areas of focus. The first was a shift of mindset.

“We need to change our way of working, from being a large company that sells traditional products and has a traditional way of thinking to a mid-size, entrepreneurial fast-moving company,” Ekerot explains.

“We need to transfer from being a product-centric company to a customer-centric company.”

The second area of focus was to sharpen its products and solutions. “We have a lot of different products and we have a lot of different solutions. But we need to add a much higher value in our products, and I believe we can do that.”

Streamlining Gigaset’s market model was the third key area, with Ekerot keen to steer it away from its current complexity toward a more aligned go-to-market strategy.

Shifting Sands

The German-based company was founded in 1941 to produce telephones. It is now the largest vendor of analog and Digital Enhanced Cordless Telecommunications (DECT) telephones in Europe and is in the top three worldwide.

“We’ve got around 50 percent of the market share in Europe,” Ekerot says. “But over time we have also evolved into other things.”

This includes the ‘professional’ category, which he explains refers to organizations that appreciate the benefits of a DECT installation. “I certainly have one, but many other customers have them as well,” he says.

“There are also organizations who do not want to work with smartphones or that can’t work with smartphones, and there Gigaset is very well positioned.”

“We’ve got around 50 percent of the market share in Europe.”

At the same time, the company has also built up expertise in the area of smartphones. “We’re actually the only European manufacturer of smartphones in the world that does so in Germany,” Ekerot says.

“We’re selling to consumers but also looking more into the B2B segment with those smartphones, as they are an excellent fit and logical addition to our existing portfolio.”

Another area Gigaset is concentrating its efforts in is the smart home. “These are the product solutions that you have in your home for security, safety, for being able to monitor and manage your heating and ventilation and so on,” he explains.

A New Approach

While this diversity gives Gigaset a presence in a number of markets, Ekerot believes more focus is necessary. “We are a little bit too spread out,” he admits.

“We looked at what our competencies are and we have really chiseled that out. We need to build on those competencies going forward.”

He sees this fresh approach taking Gigaset in a new direction. “We need to undertake a journey, which we have already started, to create much more value for the company. Obviously, as we are a stock listed company, this also reads as shareholder value,” he says.

“That value for the user of our product should be seen in the quality, in the security, in the fact our products answer to the needs and wants of our customers.”

“That value for the user of our product should be seen in the quality, in the security, in the fact our products answer to the needs and wants of our customers.”

It’s a three-phase journey that begins with the current ‘focusing phase’, which Ekerot explains is about assessing where the company is now and where it wants to go.

“The second phase, when we transfer into that, is sustainable differentiation both on technology and on customer attractiveness,” he continues. “That speaks into the product and solutions.”

Once sufficient levels of growth have been achieved, Gigaset will be ready to shift into the third phase.

“This is when we will see considerable growth. It will come as we are able to monitor the go-to market strategies and be able to choose and focus on the right things, at the right time and with the right products.”

Deep Thinking

In terms of setting targets, Ekerot stresses that growth must be sustainable. “To do that, it’s double-digit growth per year in the market,” he says. “A rapid growth company should be somewhere around 15–20 percent. I think that’s where we need to aim to be.”

As the company sets out on its new journey, he expects that growth may be a little lower. “What we need to create is a higher value, that’s the EBITDA. However, before rapid growth and improved EBITDA can be achieved, the company’s transformation must be completed,” he says.

“A change in culture and mindset has profound implications and will affect the entire company, consequently leading to its complete transformation.”

The focus, therefore, has to be first on which products to pursue and whether they can attract the right customers and deliver the right value, he explains.

A big part of that will be proving the company has longevity as the world shifts away from products that it specializes in, such as DECT phones, in favor of more modern solutions.

“We need to really ensure that people understand the purpose of this and to get people with us on this journey so they trust that we’re able to adapt and that we’re making changes,” Ekerot reflects.

“We have to be ruthless, but not rude, in our pursuit of focus.”

“What we need to be careful about is to not throw out the baby with the bath water. We need to be able to secure and understand that, as growth dips, we can mitigate decline with other things.”

While this will primarily be to take on the professional segment and the smartphone for the B2B segment, there are other possibilities on the horizon. Geographical expansion is one such opportunity, with Gigaset right now strongly centered in Western Europe.

Creating products that Gigaset can service, manage and support will help to extend the lifetime of its products – a win–win for both the company and its customers, according to Ekerot.

“Gigaset has always been an innovative company. But it’s a little like learning to skate. You need to let go of the sideboards a little bit. What we need to do is focus developments in areas that will also yield more potential in the future,” he says.

“We have to be ruthless, but not rude, in our pursuit of focus. If something just doesn’t fly, then take it on the chin and do something else. Drive it much harder. That’s something that I want to do.”