Transformation under pressure from profit targets and competition
An international industrial group with a turnover of EUR 400 million and 3,300 employees needed to be realigned both operationally and structurally.
Losses, eroded competitiveness and a failed attempt at restructuring were compounded by overcapacity, falling prices and a structural earnings shortfall.
Under considerable time pressure, the supervisory board demanded a robust vision, clear priorities and a decisive turnaround.
“Stop the bleeding!” Pressure to deliver results & structural shortcomings
“Stop the bleeding”: External pressures were quantified, the true state of earnings was made transparent, and revenue targets were adjusted to a level that is sustainable under tougher market conditions.
All restructuring levers – costs, workforce, procurement, engineering and international business and production structures – were aligned with a target of 5 per cent EBIT, with specific targets and timelines.
Consistent & fast – “Perfection is slow motion”
Maximum speed whilst safeguarding customer performance: the critical transformation phase should not exceed twelve months. Given the necessary staff adjustments, an organisation cannot sustain this for any longer.
An integrated transformation agenda combined stabilisation, closing the earnings gap and sustainable competitiveness.
Key focus areas: global engineering and operations footprint (Germany/Poland/Mexico/China), procurement, design-to-cost, SG&A, engineering, governance, reorganisation and profitable growth.
Clear governance aligned leadership and sites, accelerated decision-making and ensured short-term contributions to earnings as well as medium-term impact.
Establishing responsibility for implementation, clear communication
Immediate measures, reorganisation and the appointment of new personnel to key positions ensured that all packages of measures were implemented within four to six months, with the full commitment of senior management.
After eight months, half of the 30 per cent headcount reduction had been achieved and over 90 per cent of it had been secured; the final target was reached after twelve to 14 months.
