With a Ph.D. in photonics from EPFL, Yann Tissot, CEO and founder of L.E.S.S. SA, gained additional knowledge in systems management and entrepreneurship at the University of Oxford and Babson College in Boston while working at high-tech companies for four years. Yann is a former competitive swimmer and he returned to the Lausanne campus on an innovation grant for continuing his research, where he came up with the idea to adapt signal amplification techniques to lighting.
Although the coronavirus continues to make headlines, dominating politics and company agendas alike, the new normal is starting to take shape. EY has asked many thought leaders and decision-makers to take stock and share their ideas on the next steps. Yann Tissot, CEO and founder of L.E.S.S., discusses the fragility of our ecosystems and the importance of sticking together during a crisis.
Yann, what is a normal day like for you nowadays?
Today's typical day consists of a lot of customer calls via Zoom, and Teams, which allows us to maintain relationships and reassure our customers. It is more a series of long-distance meetings than the business trips I was used to before the crisis.
Can you tell us about the overall environment right now?
We see a strong polarization among our automotive customers. On the one hand, some large customers already well-established in the market are adopting a conservative strategy by massively cutting innovation budgets. On the other hand, new actors have emerged by turning the crisis into an opportunity and looking for innovation to enter the market. Concerning our first market, the equipment market, we have had to face harsh budget freezes and it is very difficult to plan the recovery of this segment in the short term. Nevertheless, there are still promising opportunities, which we will seize.
So, it is a form of evolution?
It was a very abrupt evolution at the start of the crisis and now it is beginning to ease off slightly. People have got used to the situation and they are gradually starting to plan for the medium term again. It is still a very floating thing, but again, there are still ways to work constructively with our current and future clients.
Are there any areas of your business where you have returned to some normalcy?
No, it will take some time. We made the most of this period to diversify ourselves in our first market, by bringing out new products that are no longer exclusive to the watchmaking industry, but which are also suitable for Pharma and MedTech, for example. But I think that for our long-standing customers it will take several years to return to the pre-Covid conditions.
We made the most of this period to diversify ourselves
They say that there are opportunities in every crisis, do you agree?
Some things have indeed accelerated, mainly in the automotive industry: although some actors have been overly conservative in terms of innovation, almost all stakeholders are adopting a strategy of over-electrification that has accelerated rapidly with the crisis. Yes, there are opportunities, but it is still a crisis! However, within a crisis there are always ways to navigate.
How did you keep your teams and employees informed and motivated?
We have put a strong focus on industrialization and R&D activities, and we have maintained the planned investments in both of these departments, which is reassuring for everyone on the medium and long-term strategy of the company. We made the choice not to reduce the workforce and we managed to put effective Covid measure in place measures (masks, distance) much earlier than recommended, in order to maximize the opportunity to come to work, so that the amount of work at home was limited.
Did you take steps to maintain employee morale?
It is very difficult because we have a team that mixes young and older employees. They used to get together during regular social events, where people could enjoy a social activity but also communicate some of their fears or questions informally. We kept a consistent program in the industrialization, with precise milestones. But there was not much we could do about the lack of social contact except allow people to come to work, to meet colleagues, management, and not stay locked up at home.
If you had a time machine, what message would you send back to yourself before the pandemic started?
"Remember that shit happens!” (laughs). I think that once again, the global crisis is difficult to get through, but entrepreneurs who are builders at heart and who started from scratch are used to dealing with this kind of crisis on a daily basis. You just have to remember that nothing can ever be taken for granted. The crisis is a good reminder of that.
Entrepreneurs who are builders at heart and who started from scratch are used to dealing with this kind of crisis.
A few questions about the business: how would you sum up this new normal in your two industries, inspection and automotive?
In inspection lighting, the equipment market is subject to certain cycles, and, in times of crisis, it is natural to spread out the re-equipment cycle by wearing out the current infrastructure. We have seized the opportunity to launch new products aimed at different markets, mainly pharma. However, the pharmaceutical industry is not only in Switzerland but worldwide; the new normality will limit the number of physical contacts and there will be many more intermediate and regular meetings online. However, I remain convinced that to start a deal and close it, you have to be able to meet people. In the automotive industry, we have cars equipped with proven technology that capitalize on the investment in previous infrastructures, and on the other hand, the threat of newcomers in the electric sector, coming from Asia or elsewhere, that strongly reactivate the innovation in the market. The automotive industry is willing to transform itself, which is extremely positive for us. We have more opportunities, and our customer base is much more fragmented, with smaller but more dynamic and innovative customers.
Are these customers forced to change or do they have the will to do so?
Clearly, they are forced, with the new CO2 standards and the arrival of Chinese actors. They would not have changed on their own, or they would have taken more time to make this transformation. On the other hand, the new actors sometimes have a greater willingness to take risks and gain market share. For the automotive market, I do not think there will be room for everyone.
Have you had to change your long-term strategy as a result?
No. It seems that more doors have opened for innovation. We see that the arguments of weight savings and a differentiating design are starting to bear fruit: customers are forced to reduce energy consumption, weight – all good news for us. We have a more opportunistic strategy, for perhaps smaller but more agile actors, with volumes that are a little lower but that add up to a larger number of customers.
It seems that more doors have opened for innovation.
What are your short-, medium- and long-term goals?
We have a roadmap that remains very clear despite the crisis. We have continued to recruit; we have maintained our investments. We do not know when it will start again, but we will be ready.
How do you manage the uncertainty?
I used to be an elite athlete. When you practice four, five hours a day for one or two key events a year and you get injured a few days before these events, you need to have resilience and have a clear vision so that you can bounce back and build yourself up again... these are universal skills that also apply to business. With the crisis, many more people are coming to us because they trust in our reputation know the credibility and have taken the time to validate the strengths of our technology. This is very good news for us. And I remain convinced of our strategy of diversifying our customers, rather than focusing on one or two industrial giants.
Have you or the business taken on any specific responsibilities in managing this crisis, or undertaken anything to give back to society?
Unlike some of our counterparts, who reduced their workforce, we found that it was important to be able to bring people together around management using a very strong leadership. In 2020, we even expanded the team. It was crucial to send a strong message: you can count on your job, we are not going to take advantage of the crisis to restructure, to increase our margins, or anything else. Last year, nobody got a bonus. This requires the person steering the boat to take a very strong position so that they can navigate the storm, but I consciously took on this role, which isn’t necessarily easy to do in terms of the various shareholders or financial stakeholders. After this crisis, we will continue to pursue our company goals: supplying products with a streamlined design that allows for weight reduction and energy savings. Financially, we have had the opportunity to benefit from loans backed by the Technology Fund. In our main market, we have continued relying on our Swiss suppliers to boost Swiss Made products, at the risk of diminishing our margins.
It was crucial to send a strong message: you can count on your job, we are not going to take advantage of the crisis to restructure.
Have the expectations of shareholders and stakeholders changed?
Pass! (laughs) In the beginning, some people did not understand the extent of the crisis, but as soon as it became widespread and went on, they instead praised the good management of the cash flow and the company, despite the reduction of the revenue stream. Ultimately, you cannot please everyone, some shareholders will be happy, others will not.
Did they pressure you in terms of the way you have managed the crisis, in the way you have stayed the course despite it all?
The pressure is relatively normal... these are things that can be discussed, are acknowledged, but in the end, the shareholders still trust in the management.
In terms of sustainable development, did you define objectives for the company? Have they changed, have you been able to achieve them?
No, they have not changed. It is mainly the product itself that is focused on sustainable development. Internally, we had already decided a long time ago, even if it was a little more expensive, to build an industrial company in the heart of a city, because people can use public transport, go quickly to the café, to the restaurant, without having to drive 50 km. This choice is reaffirmed, we do not plan to move to find cheaper premises.
With your products, you also contribute to your customers' sustainability goals...
Exactly. We are adding value for our customers, and saving on energy and weight, and they appreciate that.
A more philosophical question: is resilience innate or can it be acquired?
I believe that if your life has always been easy, it is very difficult to find resilience. Take the example of an athlete: when you have an injury, you must take a step back and rebuild yourself, start again from scratch. I think it is the experience of life that will give the entrepreneur the very specific energy to be resilient. The pandemic was a surprise for everyone, but for me, it ultimately just became one more in a long line of challenges.
Any final words?
We all hope that things will get better. This is not the first crisis, there will be others. We cannot control everything. This is a shake-up that reminds us that life and the environment are fragile. This crisis is just the first warning of what the future could hold.
Yann Tissot's three tips for dealing with the "new normal":
- Control what you can and navigate through the things you can't control.
- Strengthen the teams around management
- Diversify your customer base and opportunities