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Welcome to The Executive Exchange, a premier podcast series for on-the-go senior executives. Each episode features short, impactful podcasts where industry leaders share key insights and experiences from the water industry.
[00:00:00] Piers Clark: Welcome to the Exec Exchange, 15 minute podcast in which a leader from the water sector shares a story to inspire, inform, and educate other water sector leaders from around the globe.
[00:00:10] Piers Clark: My name is Piers Clark and my guest today is Kim Skibsted, the Chief Executive Officer at the Grundfos Foundation.
[00:00:18] Piers Clark: Kim, it is wonderful to be with you.
[00:00:20] Kim Skibsted: Thanks, Piers.
[00:00:22] Piers Clark: Today we're gonna talk about Project Flow and what that is and why it's so important to the water sector. But before we get into that, we always like to learn a little bit about our podcasters.
[00:00:34] Piers Clark: So, can you give me the potted history of your background and how you got to be Chief Executive of the Grundfos Foundation?
[00:00:41] Kim Skibsted: Well, I have a kind of an odd background because I'm educated within arts in Scandinavian literature, but I work for a very engineer heavy organization. Before joining the foundation, I was a very young member of the Danish Parliament for one and a half year for the Social Democratic party. It was too bureaucratic, too many rituals so I left and joined the private sector. I was in Grundfos for 10 years as the head of communications, public affairs, and societal engagement, and before that I was working for a retailer called Jysk. And before joining that, I was a consultant in the public relations and public affairs business.
[00:01:21] Piers Clark: When you started telling that story, I was going to go, oh my God. We've got someone who's got an arts background leading a water sector. There's a whole conversation to be had there then you throw in that you're a politician with that background.
[00:01:32] Piers Clark: I think that makes you unique on two fronts.
[00:01:35] Piers Clark: Now, let's talk about the Grundfos Foundation. Grundfos Foundation is the owner of the Grundfos Corporation, the world's largest pump manufacturer.
[00:01:44] Piers Clark: Let just unpick the difference between the Grundfos Foundation and the Grundfos Company and how it got to where it got to. Could you tell that story please?
[00:01:53] Kim Skibsted: The Grundfos Corporation was started during the Second World War by a very entrepreneurial blacksmith in Denmark. His name was Poul Due Jensen. He had a dream to become an engineer, but couldn't afford it. His idea during Second World War was to start a sewing machine company.
[00:02:11] Kim Skibsted: But one day, a local farmer came up to him and said, "You are very good at machines. Could you maybe make a pump so I could water my crops?" And then he made a pump. And it was very efficient, and the farmer was very pleased with this pump. And now he wanted to make pumps, and that's where Grundfos really started. Later on he bought some land just beside the house, built a small factory and started mass producing pumps, especially for agricultural purposes.
[00:02:39] Kim Skibsted: And then ever since the business grew and in 19 75, he handed over the ownership of Grundfos. He created a corporate foundation called the Poul Due Jensen Foundation.
[00:02:52] Kim Skibsted: So, he handed over the ownership to the Foundation and then also to the family, so they were secure in the future. In 1977, Poul Due Jensen dies and his son Niels Due Jensen takes over. Later on because Grundfos was so successful, the profit that Grundfos makes every year was decided by the Foundation to be put half of it in Grundfos and half to the Foundation. And the Foundation's role is very clear, to protect and develop Grundfos as well. We could do that directly, but we could also do it indirectly with our philanthropy activities.
[00:03:27] Kim Skibsted: In 20 18, I took over as the CEO of the Foundation. And today we are among the most wealthiest corporate foundations in Denmark. Still owning Grundfos, also owning partly some of the water technology companies we see in the area of water business, especially when we work together with universities.
[00:03:47] Piers Clark: Wonderful. You've talked about scale, but you haven't given any numbers there. Can you give me some numbers in terms of turnover or number of staff?
[00:03:56] Kim Skibsted: The Grundfos Group has a turnover of about 35 billion Danish Krone every year and 22,000 people globally.
[00:04:04] Kim Skibsted: The Foundation, as I mentioned, we have a wealth that is now, in shares and bonds outside of Grundfos, it's around 12 billion Danish Krone that we invest
[00:04:14] Piers Clark: And I've just quickly checked, the 35 billion Danish Krone equates to about 4 billion sterling or 5 billion US dollars .
[00:04:24] Kim Skibsted: And then the Foundation has been deliberately not growing when it comes to staff, because we'd like to be a small, agile and efficient Foundation. We'd like to keep it quite slim because our role is, as I mentioned, to project and develop Grundfos.
[00:04:41] Kim Skibsted: And then we do philanthropy and last year I think we handed out 343 million Danish Krone to research and science to water and development and to social inclusion all around the world.
[00:04:54] Piers Clark: Perfect. All right, well, the topic we wanna talk about is Project Flow. So, let's start with what is Project Flow?
[00:05:02] Kim Skibsted: I'll just go back a bit and tell you the story about how it started. I've been traveling and I've seen a lot in Africa and Asia. I've seen terrible things in the refugee settlements around the world, especially when it comes to the access of water and the cost of water.
[00:05:18] Kim Skibsted: I once went to the Za'atari camp for refugees in Jordan and they were telling me that the biggest cost they had in this settlement was water. Every year they had to change the pumps because it was not working.
[00:05:32] Kim Skibsted: And Denmark being a country that is very good on water and energy efficiency, I thought maybe instead of just putting money into the big UN pot, and we are obliged to do that, but maybe we could come up with some of the solutions that we are very good at especially with water.
[00:05:48] Kim Skibsted: The Americans were setting up local radio stations in the camp. The Germans were making hospitals. And then I asked the head of the delegation, what are we doing from Denmark? We could do the water. But that's not how it works, they said, and I couldn't understand why.
[00:06:02] Kim Skibsted: And then I've been in refugee settlements in Africa seeing exactly the same thing, and every time I'm always asking, how about the water, is that an issue? And that's always the issue. That's the biggest issue.
[00:06:12] Piers Clark: And it's water both in terms of supply, and I'm guessing sanitation as well.
[00:06:18] Kim Skibsted: Exactly. You have to have access to clean water, otherwise you cannot get you reasonable life and you cannot get sanitation, hygiene, et cetera.
[00:06:27] Kim Skibsted: We did some projects with the American-based NGO called Water Mission in a big refugee camp in Nyarugusu Western Tanzania, where we also put the local villages on the grid. So, you didn't create this conflict between the refugee settlement and the local population. So we did that together with Water Mission and we succeeded based on also solarized water pumps.
[00:06:50] Kim Skibsted: That was kind of an eyeopener for me being there for the first time because I saw what happened to the children and the people. They didn't drink dirty water. They were not sick anymore. So, you create this positive dynamic when there's clean water.
[00:07:03] Piers Clark: Yeah. You get the water and sanitation right and the whole community can lift up. Suddenly children are going to school, suddenly they've got the energy level. Suddenly
[00:07:11] Piers Clark: businesses can start.
[00:07:12] Kim Skibsted: Everything becomes much easier. So the idea of making sure that there's clean, fresh water every day, that you do not fight about because there's plenty of water for all, what if we could do that?
[00:07:24] Kim Skibsted: And one day a person called me from the UNHCR office in Geneva and working with the UNHCR was not something we were doing. We saw them in some of our projects, but we didn't have them as a partner. She called me and said, " I know you are probably not going to want to talk to me because you probably heard we are very expensive. If you do grants to UNHCR, the overhead is quite big on administration."
[00:07:50] Kim Skibsted: I said, yes, that is correct. We'd like to get our money out there on the ground directly in the projects. And then she told me the admin cost will be around 6% the overhead, compared to around 50. And then I said, now I'm listening.
[00:08:04] Kim Skibsted: And then she presented the Project Flow where it's a kind of an evolving fund. If you put in solar powered water systems, you can save money on diesel generators that pumps dirty water out of a river and you can also save money on trucking water. Trucking water is immensely expensive.
[00:08:23] Kim Skibsted: And those savings will go into the next camp where we put new solarized pumps up and we can save these expenses for trucking water and diesel generators.
[00:08:32] Piers Clark: So just to be clear, you kick the project off with some technology and then the savings that that generates, you are rolling forward, reinvesting, and it becomes this cascade of recycled savings and technology rolling forward.
[00:08:46] Kim Skibsted: Exactly. And every area has its special circumstances, so you have to versionize it every time. But the idea, I like that very much. And I told her, if UNHCR is going to do this, you can count on us because this is what we've been looking for, because the UNHCR should be the one heading the water supply in all UN operations.
[00:09:06] Piers Clark: Yeah. It shouldn't be a corporation. It needs to be a trusted, respected body that's independent.
[00:09:12] Piers Clark: So when did all this conversation happen?
[00:09:14] Kim Skibsted: I think it's five or six years ago when we started that. I said let's set something up and then we started the Project Flow. And today, there's 26 systems running in six countries.
[00:09:25] Kim Skibsted: The thing is with the UN, they have to ask all their country managers in each country , whether they're into it or not. We have a different approach. We'd like just the UNHCR to say let's go with this and then we'll provide the technology. That's the beauty of the private sector because as I told the UNHCR and they said exactly the same. If we can show the world that people in surroundings, especially in refugee settlements, they don't have any people talking their cause. There's no one defending them. No one wants them. We are fearing everyone, especially in Europe, that will be knocking on our doors one day. So politicians in Europe are reluctant to do something about, they don't want to see them, they should be kept where they are. But somehow we don't make it worthwhile living there.
[00:10:10] Kim Skibsted: As you know, the politicians in Denmark want to shut down the borders. We cannot handle or absorb refugees and migrants in our small country, but we can do a lot where they are and create the circumstances so that they can create their own lives closer to their homeland.
[00:10:25] Kim Skibsted: So my idea was, let's take this, and show the world, even though it's difficult, but if we can make sure that there's water access for the most vulnerable people in the world, we can do it anywhere.
[00:10:37] Piers Clark: Excellent. Okay, so 26 projects across six different countries working closely in partnership with the UNHCR.
[00:10:43] Piers Clark: What is it you know now that you wish you'd known six years ago that might have made it even more impactful? Is there anything that you've gone, oh God, why did we not see this problem?
[00:10:54] Kim Skibsted: To be honest, being a former politician and now in the private sector, in the private sector we could do a lot but we need also the politicians to go along. That's where the foreign ministry in Denmark and also in other European countries has been very constructive in working together with us.
[00:11:09] Kim Skibsted: But the thing is, we need to have the dialogue with the local authorities, of course and also make sure that the country that are housing these people are willing to make sure that we can create the access for water as we want to.
[00:11:23] Kim Skibsted: And that has been a bit problematic because there's so many interests and also so many questions to our motives behind doing this because what does 300,000 in an refugee camp to you? But it's really a part of our DNA as well because we want to do it. That's why we started the company back in the days to provide water to the people in need.
[00:11:44] Kim Skibsted: It's doable. And to convince camp management, local political leaders, sometimes governments, that this is a good thing to do because it creates so much positive energy in the refugee settlement, but also in the region, the province or the country, that we have to be a bit more patient in organizing this and also have the dialogue in a timely fashion has been a challenge for us.
[00:12:10] Kim Skibsted: We are very clear when it comes to the UN that UN needs to make sure that the local authorities and the political leaders can see the idea that doing this is a good thing. Otherwise, they'll probably prevent it.
[00:12:23] Kim Skibsted: So, it's really being a bit more patient and waiting for the political systems to find the platform so we can do it.
[00:12:29] Piers Clark: Excellent. So what's next? How does this move to the next level?
[00:12:34] Kim Skibsted: We've asked UNHCR to talk to others than us. We'd like to still be on board and we are still funding the Project Flow. We see this as one of the best projects we've ever funded because it gives so much meaning. There's so much idea and so much vision in it.
[00:12:49] Kim Skibsted: We want to scale it more and that's why I've been spending a lot of my time talking to foundations all around the world about this project, and get more funders on board so we could do a Project Flow Version 2 where we could put more money into it so we could do it in other areas than the six countries, maybe in 16 countries. The idea was to reach around 10 million by 2030. What if we could reach a hundred million by 2030 with funding from others? And I'm talking to foundations in the US, foundations in the Middle East, foundations in Asia that are very positive on funding together with us.
[00:13:26] Kim Skibsted: It is not decided yet but I feel there's a big and positive energy about doing this together with the UN system. And also because UNHCR, they see this also as one of their biggest successes where the money really went to the ground and helped a lot of people.
[00:13:42] Piers Clark: Brilliant. Well, we're running out of time, I'm afraid, and we'd like to finish with a bit of a personal question. I'd like you to go back 20, 30, 40 years to when you were a young man, an art student, working out whether you were going to change the world through politics. What advice would you give that young man if you could go back and speak to him now?
[00:14:02] Kim Skibsted: Follow your dreams and make sure to find the right place in the world where you can execute on those dreams. And if you have a firm belief that you can do something together with others, helping other people in the world, keep on doing that and do not be blinded by privileges or status or controversy.
[00:14:22] Kim Skibsted: There's a role for everyone and if you work for a private company, make sure that their values are intact and aligned with yours, then you would do tremendous things.
[00:14:32] Piers Clark: You have been listening to the Exec Exchange with me, Piers Clark, and my guest today has been Kim Skibsted, the Chief Executive of the Grundfos Foundation, and we've been talking about Project Flow.
[00:14:44] Piers Clark: Thank you to our sponsors and I hope you can join us next time. Until then, keep asking questions, keep sharing, and keep safe.