A market-leading service provider for cleanroom measurement in German-speaking countries had been taken over by a multinational US company. The post-merger integration was accompanied by a significant drop in profitability. One year after the takeover (2017), the interim manager was tasked with stabilizing the company and restoring profitability.
Cultural change after US takeover promotes fluctuation and brain drain
After a short training period, the interim manager identified several causes for the collapse of the previously successful company. The branches in Germany, Austria and Switzerland, which had previously operated largely independently, were finding it very difficult to cope with the strict requirements of the multinational parent company. Managers and knowledge carriers left the company - and the overall fluctuation rate also increased. Further problems arose from large stock levels and insufficient sales activity.
Transparent communication creates the basis for a change in mood
In order to stop the fluctuation and break down the resistance to the new parent company, the interim manager visited the six branches - two each in Germany, Austria and Switzerland. In discussions with managers and employees, it became clear that both sides considered the challenges for the company to be great. And also that the employees were very interested in helping to find solutions, but had not felt that they had been listened to. The interim manager's offers of talks were taken as an initial signal for a cultural change in management. The interim manager built on this by providing regular updates as the mandate progressed - and involving those involved in finding solutions as early as possible. In this way, it was possible to slow down fluctuation and limit the loss of knowledge.
High inventories sold and write-downs avoided
One of the objectives of the US company that was taken over was to better position its own products in the D-A-CH market. At the same time, the acquired company had a very substantial stock of very similar products. This stock had a negative impact on returns. At the same time, selling off the stock should not cannibalize the new products - and cause as little depreciation as possible. To solve this challenge, the interim manager worked with the sales teams to identify customers in markets outside the D-A-CH region in which the parent company was not yet active. By selling in these markets, the company achieved a mid-six-figure profit instead of having to write off a high six-figure amount.
Reorganization of the national companies promotes growth and earnings
An in-depth cost and return analysis by the interim manager came to the conclusion that it would be worthwhile to separate the German market from Switzerland and Austria and run it as an independent unit. This proposal was based on the realization that a German unit could focus on the strong semiconductor and automotive markets there. The units in Switzerland and Austria should therefore primarily serve the strong pharmaceutical industry and production of medical products in these countries. Together with the managers of the national companies, the interim manager developed corresponding concepts, which were accepted by the US company and implemented within two and a half years with very good results.
Sales initiatives developed for new and existing customers
Clean room measurements in production facilities are a very complex service. Customers come from a wide range of industries, such as life sciences, automotive, semiconductors and food. And each of these customers has to comply with a wide range of industry standards and norms: ISO 14644, USP 797, EU GMP, EC 852/853-2004 are some of them. The acquired company had a great deal of expertise in this area. In order to make better use of this potential, the interim manager and the sales teams developed a concept for increased new customer acquisition with free tests and analyses. This offer was very well received - and generated considerable additional turnover through the sale of services and products. A sales initiative with a targeted approach to existing customers made a further contribution to improving production capacity utilization and creating growth.
Crisis overcome: Company delivers returns of up to 8 percent
After just under two years, the interim manager was able to hand over the management of the company to the new management team. The division of the national companies has proven its worth: The national companies deliver returns of between 6 and 8 percent. The US company's products are now well established on the market and enjoy the trust of customers.
