Interview: Jaakko Eskola, President & CEO, Wärtsilä

In his fourth year at the helm, Eskola has positioned Wärtsilä as a global leader in smart technologies and sustainable solutions for the marine and energy markets.

Jaakko Eskola, President & CEO, Wärtsilä
Jaakko Eskola, President & CEO, Wärtsilä

Published Dec 13, 2019 6:43 PM by Tony Munoz

(Article originally published in May/June 2019 edition.)

Tell us about yourself. What attracted you to the maritime industry?

I’m an engineer but have never done any engineering. After university I worked for fourteen years in banking before joining Wärtsilä, first on the power side, then running the marine business for 10 years, and now being CEO for three and a half years. In terms of the maritime industry, Wärtsilä was really a dream come true as I am a sailor and boats and the sea are very close to my life.

How many employees and offices are there worldwide?

Today there are approximately 19,000 employees in 200 offices in more than 80 countries. Wärtsilä products and services cover more than two-thirds of the world’s fleet and we have delivered power technology to almost 180 countries. In addition, we have joint ventures in China and Korea that specialize in building engines or propellers. The company also manufactures and assembles sulfur scrubbers for commercial vessels, which is one way to meet the requirements of IMO 2020. Our most recent business ventures are centered around software and data-analytics to enrich our traditional offerings.

You led a major restructuring of the company at the end of last year. What was its purpose and how did it go?

It’s been very successful. Wärtsilä was divided into three divisions before the reorganization took place. Marine Solutions basically sold only new products. Energy Solutions sold power plants, and the Service Division provided lifecycle solutions for both Marine and Energy. But the customers in those two sectors have completely different lifecycle needs, so we built a new organization where lifecycle services are deeply embedded into both the Marine and Energy Divisions to better serve their respective constituencies.

It was an idea we had considered for years, and now we have finally done it and our customers are very pleased. We hear very positive comments. We focus differently now because we’re not simply selling engines or propellers but really looking at our customers’ lifecycle needs – at their total cost of ownership – and demonstrating the value of using Wärtsilä solutions and applications.

Is that what being “customer-centric” is all about?

Yes. “The customer comes first” has always been the most important focus in Wärtsilä, and the concept must continually be reinforced. It’s about providing value and not just selling. Our business success is dependent upon understanding our customers’ business and even their customers’ business and needs. “Customer-centric” means providing value to our customers through lifecycle solutions which enhance performance.

Which division is larger – Marine or Energy?

Marine. It has a much larger portfolio of products including engines, propellers, environmental technology, as well as electrical, navigation and automation systems. Energy is focused on engine-based power plants and energy management systems. At the same time, we are structured so that all the manufacturing units, like engine factories, are actually part of the Marine Division. So when Energy needs an engine for a customer, they first buy it from Marine.

One of your stated goals is a 100 percent-renewables energy future. How do you plan to get there?

We believe renewables are the future of energy, and we have been active in power generation and backup systems for both wind and solar. As an example, last year Wärtsilä delivered a 15 MW solar PV (photo-voltaic) hybrid power plant – the largest in the world – to Essakane Solar SAS in Burkina Faso. It operates in conjunction with a 55 MW Wärtsilä thermal power plant. The solar PV plant and the engine power plant are synchronized, thus forming the largest engine-solar PV hybrid power plant in Africa. The plant supports the Essakane gold mine, which can now reduce its fuel consumption by six million liters per year and its annual CO2 emissions by 19,000 tons.

Sustainable societies and smart technologies have been the company mantra recently. How does this impact your approach to business?

It’s important to remember that everybody is doing it already today. We’re all committed to sustainability, environmental efficiency, safety and better performance. At Wärtsilä, it’s our goal to bring sustainability to everything we do with our customers, suppliers and partners. We learn from them, and they learn from us. That’s why we’ve become a smart technology company – so we can find solutions for our customers. We’re constantly innovating to find something new and better. For example, a big question today is the wave of environmental regulations sweeping the maritime industry. We want to be there to provide market-leading solutions and to develop them together with our customers.

Last September at SMM you challenged the industry with an initiative called “An Oceanic Awakening.” What is that all about?

We call for the marine and energy industries to work more closely together for an efficient, digitally connected and ecologically sound planet. It’s an open invitation to secure clean oceans for the future. We aim specifically at stakeholders in large maritime centers and congested ports. Our goal is to foster better port-to-port fuel efficiency, reduced congestion in high-traffic areas and the introduction of real-time communication between stakeholders.

When you look at the different businesses and technologies used in ocean transportation, many of the players are not collaborating or talking to each other. This leads to a lot of waste and inefficiency, and as a result everybody suffers, including the planet. A simple example is when a cargo ship transits from Port A to Port B. It may go too fast without thinking about how early it might get there or about waiting times at the port. and the port often doesn’t know exactly when ships are arriving or leaving. This pollutes both the ocean and the air and adds to operating costs.

We want to raise these issues so people understand that no one company on its own can solve them. We must all work together. If we don’t fix these problems in a collaborative manner, the outcome will be disastrous.

The goal is a fully integrated, smart ecosystem. To enable this, we established the SEA20 forum to connect twenty of the most influential marine cities by 2020 into a network that will support the adoption of best practices, embrace digitalization and legislate environmentally friendly, sustainable and smarter ways of doing business across our oceans.

Wow, sounds incredibly ambitious!

Yes, and there are more regions and cities every day that are seeing the benefits of working together for the benefit of all. Because of global warming and other issues, we are firmly committed to the IMO 2050 agenda on reducing greenhouse gases, and this is the right moment to be collaborating. We need to start using data to understand and analyze the challenges. At Wärtsilä we have huge amounts of data on running engines, optimizing ship routing and so on. Ports and cities have the same. We have the right technologies and computing power. We just need to get business leaders to engage this data-driven new way to run things.

We also want to provide solutions to our customers, so they can achieve their targets effectively. That’s how we want to collaborate. For example, here in Finland we are building a new technology hub where we invite all maritime or energy players to develop new ideas with us on how to achieve a more sustainable world. We’ve received a lot of interesting contacts and have connected with many of them, and we were thrilled to see our customers and suppliers participating along with academics, cities and others.

This is the way it should be. Everyone gets together around the issues and gets to co-create and innovate to solve them. It’s a huge challenge. It’s not going to be solved overnight.

Wärtsilä recently acquired Transas as well as well as a number of other well-known businesses. What’s the strategy behind these moves?

We looked at our existing capabilities and how we could improve them. Then we looked at different strategies and possibilities. For us, it was not so much about adding new engine or propulsion technologies as it was about strengthening the data-enabled side of the business. That’s why the latest acquisitions are all “software houses.” We’re buying software competence, data analysts, coders, people who can transform companies by looking at data in a different way. We want people who can bring that kind of competence on board a vessel so the vessel operates in the most efficient and safe way.

What kind of manager are you?

I believe in teamwork and have a great management team. I hire people who are smarter than me and let them do their thing. Meanwhile, I spend my time meeting with customers, employees and investors. Those three constituencies are extremely important to me.

What’s your vision for Wärtsilä?

Our goal is to enable sustainable societies with smart technology. So in Finland we’re building the new technology hub and partnering with all the players to create complete ecosystems. In Singapore we’re working with the port authority and others to establish a smart maritime society with a focus on cyber security, which is very important for safe operations in an increasingly connected world. Meanwhile, we engage with customers around the world to best serve them over the long run.

I’m an engineer. I like technology. But the technology has to be smart and has to be implemented in a smart way. We’ve created a company that promotes innovation and enables all of our 19,000 people to create ideas that can be locked into the system and developed further. The technology and data stay there, in the system, so everybody can access it. That makes for a great company and great employees.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.