Turnaround of a Sales Company
Stefan Lind reversed the trend at HTC and kick-started growth. As part of the solution he hired two Executive Interim Managers who were tasked with turning around the sales companies in Germany and the US respectively.
”I have learned to over recruit in order to achieve success”
The right Interim Manager can quickly identify the crux of the matter and, using his or her experience instil the confidence in the organisation required for it to focus on the future. He or she must also be able to think strategically and at the same time be willing to roll up one’ sleeves and get the job done themselves, Stefan Lind asserts, ex CEO of HTC.
HTC Floor Systems manufactures and sells i.a. grinding machines, vacuum cleaners, and maintenance systems for all types of hard flooring. The turnaround of the group amounts to more than SEK 500 million across two business areas with global market leadership. HTC “created the industry” 25 years ago and experienced an incredible development up until the financial crisis. When the company in early summer 2013 was acquired by private equity firm Polaris profitability was fair but there was no growth. The priorities and direction of the company was unclear. Important competencies had been lost and both managers and employees were at risk of being squeezed between the previously hierarchical entrepreneurial culture and new strategies. The trend had to be reversed. New management, among which a new CEO, Stefan Lind, was hired. Two Executive Interim Managers were also tasked with sorting out the sales companies in Germany and in the US.
EXPERIENCE EMPOWERED THE EXECUTION
It was really quite urgent. The owner Polaris had high expectations for growth in a short time span. There were problems beneath the surface with multiple seats of fire and a partly weak management team. The sales company in Germany constituted a particular emergency; it had veered off in the wrong direction and a shutdown was a feasible alternative.
- There was a need for a person on the ground who were going to be able to make an analysis of the requirements. Nor was there sufficient time to carry out a traditional recruitment process, in a country I was not familiar with, says Stefan Lind, the recently recruited CEO at the time.
RAPID TURNAROUND IN GERMANY BY A “PROTECTED” INTERIM
The solution was to hire an Executive Interim Manager. Within two weeks three suitable candidates were presented to the company. In less than two months following the initial contact Christer Brovinius had taken up office in Germany. Already during summer, he had initiated the analysis. By August the board approved his proposal. The assignment was primarily to design a new strategy. Was it possible to salvage the unit or would we have to wind it down? How could we regain momentum and find enjoyment in the sales efforts?
The situation turned out to be desperate and we chose to “protect” Christer. He was given free reins to focus and was expected to achieve a clear trend break in Germany within a year. We opted to separate his assignment and avoid burdening him with other group-wide initiatives.
A STRONG TEAM ACHIEVED A TURNAROUND IN GERMANY
There was nothing wrong with the products, but an earlier decision to relocate the office in Germany reduced accessibility and service for loyal customers. Relocating back to the original location made it possible to rehire competencies lost in the move. The dialogue with customers could be re-established – and result in suitable offers, service and accessibility.
- Christer put together a strong team with a feeling of affinity who delivered extraordinary growth. Customers also appreciated the change. A positive result was produced by mainly incumbent sales staff.
REVERSE THE SALES TREND AND CREATION OF TRUST IN THE US
On the most important market, the US, the need was rather a traditional sales turnaround. Previous bad recruitment resulted in the loss of key personnel, the main customer had left and others had started having doubts; would HTC have to exit the US market? – The assignment was to re-establish trust and reverse the declining sales. Having seen the rapid results in Germany it was relatively easy to convince the board to hire yet another Executive Interim Manager. Jan Nordlander’s rapid market analysis through a high degree of presence at customers’ resulted in a reorganisation and improvement in quality of the sales force, and the establishment of sales affiliate in Philadelphia. The several years long decline in sales was reversed. After nine months the trend break had stabilised followed by double digit growth rates.
NEW CULTURE, SHARED VALUES
HTC was a group of hardy and loyal fellow-workers, but there was no common vision of the need for change or sense of urgency, and no impact assessment had been made. To achieve lasting change, processes and structure were needed. Management required broadening with new functions, and the teams with mixed competencies.
- If you are to step on it, the direction must be clear, with a framework which has secured support in the organisation so that everyone is able to contribute. I started off by involving management in a vision and strategy in order to establish a clear direction, complimented by a performance culture with a clear focus. We needed a cultural boost of participation for the entire organisation!
Together we outlined a new vision, strategy and values, and a clear decision structure was laid out. Based on these targets, every area was tasked with their own action planning, so that it became clear what the priorities were and what needed to be done.
- We wanted to make use of the entrepreneurial culture and attempted to build on those elements that worked. In general, the employees were proud and committed, but more accustomed to acting upon orders from others than taking own initiative. I believe in decentralised responsibility with clear KPIs and individual follow-up. By involving the employees, their level of commitment increased dramatically.
EXPERIENCE CREATES SECURITY AND POWER TO EXECUTE
Creating strategy and a platform is one thing. Execution requires skill, time, endurance and toil! In order to navigate, it facilitates if you have implemented change successfully in the past and know what actually happens in the process.
- It is much easier if the staff likes the person. A person who has the ability to create the sense of a winning team and is good at establishing new relationships, and create trust – “trust in me and the future” – will more easily win the staff over for his or her cause. Knowledge of the particular industry and business model was already inherent in the organisation. The experienced interim brought security and power to execute.
I have learned to over recruit in order to achieve success. I hired Interim Managers who in many areas were more skilled than myself. They quickly found functioning models for i.a. frequent reporting back. With two highly competent and experienced persons on board, I felt completely secure and could focus on the future, and to certain extent also use them as a sounding board. Thus, execution was accelerated.
COMMITTED OWNERS - PART OF THE SUCCESS
- In order to succeed we did not just need good people, but also an attractive product range. We had the right board and a strong and clear owner – Polaris – who contributed with exceptional level of trust in us. They have persistently invested in product development and digitalisation for the long term, so that we can create a stronger platform for the future. Today HTC offers high value solutions, a development from traditional product sales.
THE IMPORTANCE OF A GOOD RELATIONSHIP WITH THE INTERIM SUPPLIER
- Nordic Interim provided me with several good alternative solutions in a short while. But they have also been flexible advisors. Together we twisted and turned things around until we identified the right solution, making it easier for me to present the issues to the board of directors. Our good relationship has helped me to think, setting the objectives for the assignment, and how I should take it further.
These are the situations, according to Stefan Lind, when it is suitable to bring in an Interim Manager:
- Should you need extra muscle to increase the power to execute or to handle an emergency
- If you want to try out a new measure or are uncertain of whether to have a certain function or how it should be organised
- If you need someone really skilled and experienced within a certain area who can help you to understand what to do
- If you don’t just want good advice but also someone taking personal responsibility for the execution
- If you need over delivery in terms of competency or numbers
- When you are in need of a specialist competency
- If you are in a hurry or there is major uncertainty