Case Study

Grundfos (B): “Solved in a better way”

8 pages
June 2023
Reference: IMD-7-2375

Without much family discussion, PDJ put majority ownership of Grundfos into the Poul Due Jensen Foundation in 1975. His family would receive a 15% stake in the company. This ownership stake was important, since by Danish law, the company could be sold if family ownership fell below 10%. The 8-member foundation board would oversee the company’s long-term strategy and apply its Grundfos dividends to philanthropic pursuits – water, research and social inclusion. The Due Jensen family held 4 seats; the remaining board members were chosen for their expertise. Day-to-day operations at Grundfos lay with its corporate board. PDJ died soon after this, and Niels became CEO of Grundfos. He focused on innovation, technical excellence and new product development. In 2012 Danish law changed its governance approach. The foundation board expanded to 12 members to accommodate 4 employee representatives, and the family’s voting block fell from one-half to one-third. After 2nd generation Niels retired as CEO in 2003, three non-family CEOs held the role. Niels’ son, Poul, was chosen as CEO in 2020. Grundfos had become the world leader in water pump technology, with a large workforce, a presence in 59 countries and significant revenues. Increasingly, the company leveraged the life-saving impact of its products, and its humanitarian efforts were widely recognized. Over time, family members seeking liquidity sold shares to the foundation, bringing the family’s ownership stake in Grundfos to under 10% and raising the possibility of a sale. Individual stakes now ranged from 0.15% to 3.96%. The 4th generation of this small family had fewer interactions with Grundfos than previous generations. There were internships, special projects and participation in company events, but no pressure to work there. Grundfos has grown beyond what many may consider a family business and ownership is mainly with the foundation. But its focus on building a healthy and sustainable business is still rooted in its founder’s values.

Learning Objective
  • Does this change the nature of the business? Is it still a family business?
  • Pros and cons of bringing a family member back into the leadership of the business.
  • Discussion of the future role of the family as ownership further diminishes
Keywords
Family Business, Sustainability, Foundation, Ownership, Succession, Award, Clean Water, Sanitation, Climate Action
Settings
Europe, Denmark
Grundfos, Services, Water Supply and Sanitary Services
Foundation until today
Type
Field Research
Copyright
© 2023
Available Languages
English
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This case study is part of a series
  • Grundfos (A): “Be, think, innovate”
  • Grundfos (B): “Solved in a better way”
Selected for the 2024 Schlesinger Global Family Enterprise Case Competition
This case study is part of a series
  • Grundfos (A): “Be, think, innovate”
  • Grundfos (B): “Solved in a better way”
Discover our latest research
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Grundfos (A): “Be, think, innovate”
By Peter Vogel and Colleen Lief
Case reference: IMD-7-2374 ©2023
Summary
Poul Due Jensen (PDJ), the son of a Danish workhouse manager, had seen first-hand how harsh life can be. He understood early on that he needed to s...
Selected for the 2024 Schlesinger Global Family Enterprise Case Competition
Reference IMD-7-2374
Copyright ©2023
Copyright owner IMD Copyright
Organization Grundfos
Industry Services, Water Supply and Sanitary Services
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications

Grundfos (B): “Solved in a better way”
By Peter Vogel and Colleen Lief
Case reference: IMD-7-2375 ©2023
Summary
Without much family discussion, PDJ put majority ownership of Grundfos into the Poul Due Jensen Foundation in 1975. His family would receive a 15% ...
Selected for the 2024 Schlesinger Global Family Enterprise Case Competition
Reference IMD-7-2375
Copyright ©2023
Copyright owner IMD Copyright
Organization Grundfos
Industry Services, Water Supply and Sanitary Services
Available Languages English
Contact

Research Information & Knowledge Hub for additional information on IMD publications