How did an owner-managed medium-sized company achieve a successful turnaround through a cultural change?
When a turnaround not only averts a current crisis, but also creates sustainable competitive advantages, true executive expertise is revealed. Sebastian Noack made the turnaround at a manufacturer in the metal and plastics industry possible – and gave the company new appeal as an employer with attractive future prospects.
What was the initial situation of the company as a medium-sized, family-owned manufacturer?
A medium-sized brand company from the processing steel and plastics industry with around 50 employees and a turnover of 15 million euros was facing an existential crisis. Decades of successful management by the founder had left the company stuck in old patterns. Without any real product innovations or a clear sales and corporate strategy, it reacted to the declining economy with a ruinous price war – but without halting the downward trend. The result: further declines in sales, loss of customers, withdrawal from foreign markets and a tense atmosphere among the workforce. Financial reserves were exhausted and the company’s banks urgently called for restructuring, while employees suffered from fear of the future and demotivation.
The turnaround pursued four main objectives:
- Avoiding the threat of insolvency and regaining the trust of house banks.
- Motivation and building trust among employees, customers and suppliers.
- Repositioning with sustainable competitive advantages for long-term competitiveness
- Structural adjustments to create crisis resilience.
What measures have been introduced for cultural transformation?
In order to successfully implement the necessary measures, the trust and commitment of the workforce had to be secured!
A sustainable cultural change became the basic prerequisite for all further restructuring measures:
- Addressing the fears and challenges of the workforce
- Regaining trust through transparency, fairness & error culture
- The longest-serving employee and trusted member of staff was integrated as change manager
This made it possible to implement the restructuring measures
- Addressing clear responsibilities and binding measures, exemplified by all managers.
- Introduction of a pragmatic controlling system to identify loss-makers in processes and products.
- Rapid reduction of storage costs and identified loss ringers
- Introduction of a rolling forecast and measurable target systems for all levels for efficient (self-)management, including prioritization of cash management.
Conclusion: Transparency towards the workforce, setting a credible example, involving them and showing them how they can help shape the company created a team spirit that enabled rapid improvement despite all the cost-cutting measures and adversities.
How did a new, differentiating competitive strength emerge?
A comprehensive analysis of the company’s positioning and brand message revealed the urgent need for repositioning:
- Objective reflection and an honest assessment of the company’s current position were achieved through external access as a consultant and new managing director.
- Stakeholder surveys and market and competitor analyses formed the basis.
- In a brand workshop with all departments and customers (including lost ones), emotions and controversial discussions led to purposeful results and shared values, resulting in a clear brand message
The result:
- It is not the product, but the competence, commitment and reliability of the employees that differentiate the company from the competition and retain customers. Lost customers usually migrate when these characteristics are lost through fluctuation.
- A clear claim and a new communication strategy that focuses on the employee and turns them into a decisive competitive advantage, conveys this strength to the outside world.
- A meaningful employer branding is created for the first time
What concrete results were achieved?
The successful turnaround is visible both culturally and economically:
- Positive financial results were achieved within a few months.
- The house banks supported the next steps and held out the prospect of further investment financing – a vote of confidence.
- The new brand message strengthened the self-image and motivation of employees.
- A healthy pricing policy became possible and lost business could be regained.
- The employees proactively took on more personal responsibility – with a measurable increase in results.
- A new, strategic investor joined the company, securing the site for the long term.
FAQFrequently asked questions about corporate restructuring in the construction supply industry
How can a corporate culture contribute to the restructuring of a company?
A modern corporate culture creates the necessary basis for securing the trust, motivation and personal responsibility of the workforce through transparency and thus overcoming critical situations together. In this case, he helped to reduce internal resistance and actively involve the workforce in the change process – a key factor for a sustainable turnaround.
What role does a new brand identity play in a restructuring?
A differentiating brand identity strengthens the company’s position in the market and acts as employer branding internally. It bundles corporate values and realigns communication and strategy – in this case study, it was based on competence, commitment and reliability.
It is also a key factor for talent management
What typical mistakes should be avoided during restructuring?
The urgent measures demanded by time constraints and financial constraints are often ordered top-down as having no alternative, leading to a feeling of incapacitation and humiliation among the workforce. Uncertainty fosters fear and paralyzes the motivation and focus required for efficient and pragmatic action.
Employees at all levels often recognize undesirable developments and only trust management if it can also reflect self-critically and set an example for change.
Who was responsible for the company restructuring?
Sebastian Noack – an expert in business development, transformation and change management – was responsible for the restructuring. In his role as temporary managing director, he managed all restructuring, repositioning and cultural development measures.
Noack not only contributed his many years of professional and analytical skills from the HVAC industry and the international project business. His success is largely based on his deep understanding of HR & change management, communication and empathy in dealing with people, for which his experience from over 16 years in the international hotel industry was of great benefit to him. His approach: clarity, structure and a focus on people. As an experienced interim manager, he united strategy and change management – a combination that was decisive in this restructuring.
