An American group of companies from the consumer goods market had acquired a competitor and its brand in Europe. Immediately after the takeover, the acquired company was integrated into the group's European core company.
7 years after the takeover, the interim manager was commissioned as Interim Chief Restructuring Officer (Interim CRO) to efficiently realign the European sales structure on the basis of the medium-term corporate strategy. The company's objective was to grow faster than the market every year. The sales contribution to this was to come from the following measures:
- Growth through a realignment of distribution management (defining the role of wholesalers, activating the direct customer business)
- Geographic growth, particularly in Eastern Europe
- Growth in new channels (eCommerce/private label/special makeups and customer capsules)
The restructuring was to take place without increasing the headcount. Ideally, personnel costs should even be saved relative to sales.
Analysis by the interim CRO reveals major weaknesses in the sales channels
After the takeover, the European company took over the management of the sales organization of the acquisition. Otherwise, the sales organization remained untouched and served the EMEA market with around 70 employees across 3 hierarchy levels. Two brands with similar products but different positioning in five regions were each sold to the same customers via two sales organizations.
The company mainly used a three-tier distribution system and sold directly to more than 400 wholesalers (1st tier) and, to a lesser extent, to around 50 larger retail customers (2nd tier). The vast majority of the remaining customers (approx. 15,000 resellers) in the 3rd sales level bought from wholesalers and were selectively advised by the company's sales force organization.
The interim CRO first analyzed all the key KPIs in the company. He also examined the entire sales process - from the launch of new products and the promotional policy of the distribution expansion initiatives to the consulting engagement with indirect customers. In doing so, he uncovered a number of weaknesses.
- The purely regional orientation and strong focus on wholesale had led to an ever-increasing dependence on wholesalers. In addition, wholesalers were getting involved in production themselves: they were launching their own brands against the company's brands.
- Larger retail customers, who were perfectly capable of placing order sizes like wholesalers, were neglected and stocked up with competitors who were more flexible in their distribution policy.
- The company's sales department had developed into an administrative and advisory organization. The competence to develop new business had largely been lost.
Before the realignment, the interim manager sought out the opinions of the employees and the market assessment of the main wholesalers and direct customers. Everyone involved quickly became aware of the need to reinvent the organization. All the more so against the backdrop of rapidly changing market conditions.
The interim manager put together a project team for a "Fit for the future" initiative from the top performers in sales. Together with the project team, he worked on the following topics
- Customer Relationship Management (CRM)
- Leadership and employee management
- Monthly sales initiatives
- Reporting & tracking
- Information systems
Restructuring of the sales organization gradually completed
The project team and the interim manager agreed on a large number of individual steps that were used to gradually complete the restructuring of the sales organization.
- For each customer segment, contact types, frequency, communication topics and sales targets as well as meaningful support packages were defined and implemented as a routine in the annual sales planning process.
- On the basis of "Miller Heimann Strategic Selling", the interim manager and the digital marketing team introduced a CRM system under Salesforce, which as an organizational tool significantly increases the transparency of sales success. A significant side effect was to enable efficient sales reporting and tracking.
- By setting up a workflow integrated into SalesForce, the interim manager also simplified the approval process for customer-specific promotions (special price requests) resulting from daily customer visits. Among other things, this tool forms the basis for the monthly target achievement meetings between the respective sales employees and their team leaders.
- All customer visits, results and customer information as well as the follow-up of opportunities are now documented in a structured manner and are therefore also available to the marketing and trade marketing departments for target group-oriented promotions.
- On the initiative of the interim manager, the company purchased Microsoft Power-Bi as a system for business intelligence. In this system, data can be linked with other internal data from the ERP system and analyzed.
Reliable basis for determining sales requirements
The database and the definition of a sensible contact frequency formed the basis for determining the theoretical need for sales services. This was initially well below the actual situation.
In a further step, the interim manager agreed further criteria for the personnel reorganization with the regional vice presidents. To realize geographic growth in new markets and new channels, the interim manager determined the probable personnel requirements based on empirical values. With the support of the Human Resources department, the interim manager then drew up job descriptions for all levels with a clear definition of responsibilities and the necessary professional and personal skills.
Sales streamlined by 10 employees following internal job advertisements
On this basis, all sales employees were assigned to the respective sales channels according to their skills and personal inclinations through an internal job advertisement process. The needs and capacity analysis was generously taken into account on the basis of the growth budgets for the next 2 years. On this basis, the sales organization was streamlined by a further 10 employees.
In order to achieve greater focus and commitment to the medium-term sales targets, the interim manager converted the sales organization from a regional multi-channel single-brand organization to a European single-channel multi-brand organization.
Number of sales channels and vice presidents significantly reduced
The historically grown geographical organization no longer matched the market conditions. Many wholesalers and major retail customers now had subsidiaries abroad, and the company's regional organization was causing more confusion than benefits in terms of sales activities and was generating considerable coordination effort. The interim manager therefore restructured the organization according to sales channels and across all organizational levels.
One channel was responsible for the existing distributor business and geographical growth in Eastern Europe. The other sales channel assumed responsibility for the further development of the direct customer segment, eCommerce and the private label business.
Both sales channels are managed by a Vice President. The sales organization was therefore streamlined from 5 Vice Presidents to 2.
In the further course, the interim manager reassessed the original business plan for the next 5 years together with the 1st and 2nd management levels. Detailed growth targets were derived from the reliable figures. The corresponding KPIs were defined on a monthly basis. Target achievement is measured transparently using SalesForce.
Best result for the company in Europe after restructuring
Due to clearly described workflows, the use of digital tools and short decision-making processes, the sales department is now able to act much faster on the market. The company achieved the best corporate result in Europe in the first year following the changeover in sales. The Wholesale division met expectations exactly. The direct customer segment, including eCommerce and Private Label, even performed significantly better than expected. The geographical expansion in Eastern Europe fell slightly short of expectations. Here, the concept needs to be further refined, particularly on the logistics side.
Almost incidentally, a strong, goal-oriented team spirit developed in the sales organization during the project. The team discovered a desire for change - with a mentality that seeks out challenges instead of avoiding them.
