The interim manager was commissioned by the new owners of a manufacturing company in the dental industry to professionally set up and strengthen the commercial area and to regularly provide reliable statements on the course of business. The new owners demanded transparency in order to be able to assess the development of the company's profitability and the corresponding financing requirements. At the same time, the previous managing director was to be relieved of his responsibilities so that he could devote himself (even) more to sales issues. Finally, a permanently employed successor was to be found who would be responsible for the commercial area as head or managing director.
Initial situation: commercial tasks were only carried out on the side
The clients had taken over the company from the founders. The founders were still on board. However, they lacked the professionalism to manage the company, particularly in the financial area.
The management was divided into two areas: technology/production and sales/marketing/administration. The latter area was managed by a proven sales expert who was responsible for financial issues "on the side". The finance department was correspondingly weak. There was no commercial manager, only an accountant. Controlling was also practically non-existent, and there was no dedicated and meaningful monthly reporting. Furthermore, the company was dependent on cash inflows from the new shareholder, but was unable to provide precise forecasts as to when and how much funding would be required.
Prioritization of projects initiated and tracked by the management
In the analysis, it quickly became clear that the focus of the management was almost exclusively on technical aspects. Commercial issues such as stock ranges, contribution margins, calculations, stock valuations and cash management were not considered or only given secondary consideration. Furthermore, the boundaries between areas of responsibility were unclear. Many employees had several tasks and no clearly defined area of responsibility. There was no exchange of information at management level on current tasks in the specialist departments.
In order to remedy these shortcomings, the interim manager reorganized the weekly management meetings. At the meetings, it was decided which priorities the two managing directors wanted to set and according to which agenda these should be worked through. The interim manager accompanied and documented the meetings (minutes).
Monthly reporting designed and introduction of an ERP system relaunched
In the next step, the interim manager developed the framework for regular monthly reporting to the management, which also served as information for the shareholders and the house banks. As the company was not yet using an ERP system for consistent, standardized data processing at this time, the different data first had to be checked for plausibility and reconciled.
The interim manager reactivated a project to introduce a new ERP system that was lying dormant at the time. He appointed a new project manager, concluded a new contract with the (previous) service provider and developed a project plan. The aim was to map the data from all of the company's business transactions in a closed system, which would then enable the data to be processed as automatically as possible in a transparent, forward-looking reporting system.
Foundations for weekly rolling 12-month liquidity planning developed
Another task was to further develop the operational controlling system. Previously, only data had been compiled without further evaluation. The interim manager therefore developed KPIs that allowed for significantly improved statements on business development and also depicted these in the reporting.
In order to determine the amount of financial resources required for the business, the interim manager developed a weekly rolling 12-month liquidity plan that incorporated all known business transactions, including open debtor and creditor items, open orders, planned investments and payroll accounting. By comparing this with some of the previous year's figures and business plans, a short-term (2 weeks) and medium-term (12 weeks) picture of the financial requirements with planned/actual deviations was created.
Standards in HR reviewed and professionalized
As there were no standards in HR either, the interim manager implemented a job description system, among other things, which forced employees to clearly describe their tasks and agree them with their superiors in writing. This made it possible to fill new positions in a structured and transparent manner. At the same time, salary structures and existing employment contracts were reviewed and, where possible, standardized and adapted.
Restructuring creates transparency and increases employee satisfaction
The standards introduced for reporting, controlling and cash management were met with great approval from employees and shareholders. The commercial area was organized and structured, giving the shareholders a high level of security and transparency in the figures. The managing director previously responsible was relieved of his duties as desired and was able to focus on sales issues.
Employee satisfaction was improved through tools such as regular management and employee information meetings.
The standards achieved led to the decision to hire a commercial manager to continue these issues.
In addition to continuing the measures already introduced (reporting, cash management, standardized processes), the biggest commercial challenges will be to bring the ERP project to a successful conclusion and to further refine controlling.
