A Czech ICT service provider with representation in Switzerland had acquired a medium-sized Swiss telecommunications company. After the merger, major economic, personnel and cultural challenges quickly became apparent. The situation became so critical that the company hired the current interim manager as CEO to successfully manage the complex post-merger integration in the ICT company.
Unfriendly takeover leads to high fluctuation rate
The management and some executives of the Swiss telecommunications company experienced the sale to the new owner as an unfriendly takeover, so to speak. However, the management at the Czech buyer's Swiss site was also barely involved in the negotiations about the merger. This caused great unrest in both companies. Finally, there were increasing signs that several members of the management of both companies would be leaving. The attitude of the managers quickly spread to the workforce, particularly in the acquired company - and led to a high fluctuation rate.
Transparency offensive significantly reduces fluctuation rate
The outflow of managers and staff was significantly higher than the fluctuation rate calculated for the merger. It was so high that the new company was on the verge of collapse. The interim manager's first and most pressing challenge was therefore to stabilize the situation. The most important means of achieving this was transparency. In several events and letters, the interim manager informed the entire workforce about the current situation. At the same time, he explained the Czech owners' plan to strengthen the new company by exploiting synergies and to grow significantly by acquiring additional companies. In one-to-one meetings, the interim manager was able to convince managers and critical employees to work together to make the post-merger integration of the companies a success. This contributed significantly to reducing the fluctuation rate by 25 percentage points from 40 to 15 percent.
Financial analysis reveals weaknesses: unprofitable business unit closed
Parallel to the information offensive, the interim manager identified weaknesses in a financial analysis that were severely impacting the SME's results. In consultation with the new owners, he closed a business unit and also arranged for the company to withdraw from a low-profit customer project.
New joint management created as a basis for sustainable growth
The interim manager was aware from the outset that the post-merger integration of the companies required a comprehensive transformation, as the two units were too different in terms of content and organization. For example, the Swiss SME, which consisted mainly of engineers, and the Czech offshoot, which consisted mainly of fitters, had very different corporate cultures - in addition to the language. In addition, the Czech subsidiary in Switzerland had grown with a major customer project and was still organized as a project. The Swiss SME, on the other hand, had a complete company organization. The two structures were not compatible.
In order to lay the foundations for the successful transformation, the interim manager first initiated the establishment of a new joint management team. Representatives from both companies are now represented in the management of the company. At the same time, the interim manager added a representative from the French-speaking part of Switzerland to the management team. He also succeeded in recruiting an HR manager who promoted the transformation as a member of the management team.
New management culture and corporate strategy developed in workshops
In order to ensure the long-term prospects of the new company, the interim manager drove forward the development of a shared corporate culture. Accompanied by an external company, the managers worked out a common understanding of the management and communication culture in workshops. Building on this, they developed a long-term strategy together with the respective teams in a series of workshops. The new strategy aims to efficiently combine the strengths of the former two companies and thus position the newly formed company for larger national projects.
Projected EBIT exceeded by 40 percent in the first year
When the CEO took up his position, the company set a new budget for the current year. With a clear focus on profitable projects, a massive reduction in the staff turnover rate and a new high level of motivation among the workforce, the team led by the current interim manager managed to exceed the budget for the current year by 40 percent.
