“The important thing here is that managers not only need continuity, but also openness to innovation and change. At the same time, they must stand on a foundation of values and principles that is stable. Without this foundation, the entire risk management system remains ineffective.” – interview with Heimo Scheuch, CEO at wienerberger.
Winter: On our HORIZON – “Risk Thought ” Fast Forward” platform, we take a close look at the systemic influences of ecological, geopolitical, technological, and social change on a company’s risk landscape. How do these risk changers affect wienerberger and where do you see the main risks during future transformation?
Scheuch: At wienerberger we have established a proactive risk management system. Instead of avoiding challenges, we actively recognise them and work on them continuously. For this reason, I no longer see these risk changers as acute risks for us. It is my entrepreneurial responsibility to protect myself in these areas within the bounds of what’s possible.
For example, we keep geopolitical risks manageable by operating almost exclusively in North America and Europe. Our exposure to large supply chains is limited and we avoid geopolitically unstable regions in developing countries. We have reacted quickly and pragmatically, especially when faced with geopolitical challenges, such as Russia. Our company is not known for holding on to issues like these for long.
In the social sphere, various problems could arise, such as strikes or social unrest – there’s a variety of possible scenarios. I am confident that our employee participation policy helps to ensure that our employees are seen as an integral part of the company. Through this sustainable policy that also takes into account the concerns of employees, we hope to achieve a stable organisation that can calmly ride any social unrest.
Winter: At the recent Capital Markets Day 2023 in Belgium, you presented impressive facts about your integrated IT infrastructure across the group, i.e. 60% digital order intake and 55% digitally connected production lines in 2023. Does digitalisation also mean new risks for wienerberger?
Scheuch: We are a frontrunner in many technological areas; with over 200 factories, we have dealt intensively with the topic of digitalisation and Industry 4.0. Our focus is on continuous development by actively shaping the industry and taking our key suppliers with us.
Companies that maintain simple IT structures and protect them with appropriate security measures can guarantee a certain level of protection. However, many companies are rushing into the new era of digitalisation unprepared, underestimating the interfaces and risks that could jeopardise their business models. It is generally recognised that 100% protection cannot be achieved. It is therefore becoming increasingly important to regularly train employees, customers, and stakeholders to minimise the risks – an ever-evolving topic that we will continue to address.
Personally, I see digitalisation more as an opportunity than a risk. Even if artificial intelligence and the like play an important role, we still need human intelligence.
Winter: Over the last ten years, wienerberger has completely realigned its strategy and developed into a full-service provider of innovative, sustainable, and digital solutions for energy-efficient new construction, renovation as well as water and energy management. What are the risks of such a transformation?
Scheuch: It is essential that we continue to develop as a company, promote innovation processes and move away from purely mass-produced, interchangeable products. The pursuit of innovation should be anchored deeper in the system, away from pure product orientation and the idea that mass production and standardisation are the only goals.
Our consultancy work, particularly in the application of our products, ensures increased quality on construction sites. This enables us to ensure that our products are installed correctly and do not harbour any risks, both during installation and during subsequent use. It is crucial to obtain solutions from trustworthy sources – this is my main concern.
By providing solutions and ensuring that they are applied correctly, we significantly reduce risk. The more transparent and clear the company is to the customer, the better it is for risk management. Our biggest challenge is to make our products more user-friendly and easier to use. If we are successful in these different areas, we are in fact eliminating risks. That is our goal.
Winter: Decarbonisation, circular economy, and biodiversity: wienerberger has defined a clear strategy in its Sustainability Program 2026. The goal is to cut 2020’s carbon emissions from primary energy sources and raw materials as well as from electricity consumption and generation by 25% by 2026. What is your strategy in the energy-intensive field of brick production?
Scheuch: Currently, the majority of energy worldwide comes from fossil sources such as coal, oil and, above all, gas. For wienerberger, it is crucial to take a closer look at the energy sector: where can I get my energy sources from? What alternatives are available? And how can I optimise this process?
We must prepare ourselves for sustainable access to energy resources, whether through self-supply or external sources. Different energy sources will be used in different countries – biogas in some, electricity in others, and natural gas in others. Our adaptability in terms of energy supply will therefore have to be very flexible to do justice to the different resources.
Winter: Another pillar of your Sustainability Program is circular economy…
Scheuch: When it comes to recycling, there is currently a trend towards downcycling, whereby materials are converted into lower-quality forms. However, it is important to pay more attention to equivalent or even value-enhancing recycling (upcycling). Particularly around plastics, it is now possible to upgrade materials with a certain amount of energy. Increased support for upcycling at a public level, be it at European or national level, would be extremely helpful for the future.
Legislation is required here, whether at local, regional, national, or European level. There are often calls for increased recycling, but the actual regulations and implementation are so restrictive that appropriate realisation is made difficult due to high product requirements. There is a discrepancy here between the requirements and the actual possibilities, which urgently needs to be overcome.
Winter: In your latest press release you state you are confident of delivering a very solid performance in the 2023 business year. Do you consider wienerberger resilient to the challenges ahead?
Scheuch: Yes, but I can’t sit back now. The issues are not only becoming more complex, but also more dynamic. We must adapt extremely quickly to constant change. In today’s business world, it is crucial not to judge companies solely on their quarterly results. A company’s management can appear to be brilliant by delivering an impressive performance over two years. However, the true strength or weakness only becomes apparent when we can navigate a company through different economic phases. That is what resilience is all about.
A striking example of this was our situation in 2008: the biggest mistake many people made was to ignore the looming crisis and overestimate their own potential. It is a well-known phenomenon that success leads to self-confidence and companies can develop a certain operational blindness. This is precisely what led us into ill-considered overinvestment and excessive capacity expansions. We were caught up in the belief that the crisis would only be short-lived and that we could immediately get back to full speed afterwards.
Winter: In 2022 wienerberger achieved record results and outperformed its markets by following its value-accretive growth strategy. This is an impressive development compared to 2008. What has changed?
Scheuch: It’s fascinating to realise that companies have to constantly reinvent themselves amid various crises – but, that’s the wonderful thing about it. This ability to reinvent is a huge strength, which is why I argue that people are far more important today. The future of risk management will have to pay close attention to recognising the risk in the human factor, especially in business management. The more competent, experienced, responsible, and future-orientated the management is, the lower these risks will be.
It is crucial to develop a corporate culture that will last for the next 20-30 years. Take a look at today’s training and development, the changing values, shows the need to build future leaders within the organisation. Values are often underestimated.
The important thing here is that managers not only need continuity, but also openness to innovation and change. At the same time, they must stand on a foundation of values and principles that is stable. Without this foundation, the entire risk management system remains ineffective.
This makes it clear that people are crucial to recognising opportunities and risks together and forging a path into the future.
Entrepreneurship means risk and that’s the beauty of it!
About Heimo Scheuch
Heimo Scheuch joined wienerberger in 1996 and has held various management positions. He was appointed COO in 2001 and then CEO in 2009. His skills include intercultural management based on extensive cultural experience in several countries, extensive leadership qualifications and work experience in matrix and line organisations, and more than ten years of experience in stakeholder management at the European level in various industry associations. In addition to his role at wienerberger, he is Chairman of the Supervisory Board of Wiener Börse AG, President of the Association of Issuers on the Vienna Stock Exchange as well as holding a number of other positions.
About wienerberger
wienerberger is a leading international provider of innovative, ecological solutions for the entire building envelope, in the fields of new buildings and renovations, as well as infrastructure in water and energy management.
Since 1819, we have improved people’s lives with our more than 19,000 employees. Our products and solutions make energy-efficient, healthy, climate-friendly, and affordable living possible worldwide. We are #1 in brick production worldwide and in clay roof tile production in Europe, with over 200 production sites in 27 countries. Additionally, we are the leading providers of pipe systems and surface pavings in Europe.
Heimo Scheuch
CEO Wienerberger AG
Georg Winter
CEO GrECo Group
T +43 664 962 39 06
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