enterprise restructuring view of an entrepreneur

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Enterprise Restructuring

View of an Entrepreneur

AIM 2011 Skopje, Sept 25, 2011

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Enterprise Restructuring

What is it? (general perception)

lay offs

downsizing

cost cutting

no (or shrinking) markets

financial crisis

outdated products………

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Enterprise Restructuring

What is it?

bad (only?)

What to do?

Avoid it (and fire the boss!)

???

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Enterprise Restructuring

What is „enterprise restructuring“?

= change of structure

what for?

why?

due to ……..

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Enterprise Restructuring

No new productsNo new processesNo new customers, No new marketsNo new partnersBad overall economy…….

new productsnew processesnew customersnew marketsnew partnersgood overall economy……….

due to ……..

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Enterprise Restructuring

What to do?

Timely entrepreneurial action(s)

4 short cases:

- SULZER-- LEM-- u-blox-- Hilti

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

SULZER then ……

• largest Swiss machine builder (33000 people, 5bn$)

• traditional; more than 150 years old

• global; factories in more than 15 countries

• high techn. skills in mechanics, fluid dynamics, materials (often technology leader)

• Key capabilitiy in mech. manufacturing (often centralized)

• „high product quality“ but (too) expensive • 28 product divions, very different markets

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

SULZER SULZER Corporation Corporation Net Profit per Share Preceeding PeriodNet Profit per Share Preceeding Period

MCHF

-25

0

25

50

75

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1-11-50

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

2010 2015 2020

to extrapolate

5-year Plan

Vision

to retropolate

Degree of Change

Vision

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Elaboration of the SULZER-Strategy by the Executive Management Team

Exec Mgmt Team

Strategy Committee

Strategy Structure

Key Issues Direction Organization

3 days 3 days 3 ½ days1. Retreat 2. Retreat 3. Retreat

1 day 1 day 1 day

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Sulzer fokussiert 1988 - 1998

‘88

‘90

‘92

‘94

‘96

‘98

Sulzer MedicaSulzer

Orthopädie

Sulzer IndustrieSulzerRoteq

SulzerWT

SulzerTextil

SulzerInfra

akquiriert

desinvestiert

Produkteinheiten

SulzerCP

SULZER focussing (11 years)

acquired

divested

Strat. Business Units

01

03

05

07

09

11

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

competent

understandable

with self confidence

innovative

learning

on timeSustainable

Business

Success

accountable

Corporate Culture: Basis for lasting Success

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Preceeding Period

-11-50

-25

0

25

50

75

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1

Considered Period

0-50

-25

0

25

50

75

+1 +2 +3 +4 +5 +6+7+8 +9+10 +11

SULZER Corporation Net Profit per Share (in CHF)

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

LEM – Partenaire pour l’industrie, l’électrotechnique et la distribution d’électricité

De la capture et

la visualisation

des signaux, à leur

analyse pour

aboutir à la

décision

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

LEM – Partenaire pour l’industrie, l’électrotechnique et la distribution d’électricité

Founded / Start-up 1972 New Strategy 2002- technology adapter (not developer), mainly in Geneva (CH)- strictly focussed on b2b markets (components), global (APA,NAM,EU)- main manufacturing in China (as of 2005), rest in Geneva & Japan

Sales Growth 2002 – 2009: from 100 mio to 200 mio CHF Profit Growth : from 5 mio to 24 mio CHF netPeople from 600 to 1100

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

u – blox

Your position is our focus

Our Vision

We create instant positioning technologies and services that lead you to each and every corner of the globe. GPS Chips, GPS Modules and GPS – Services

combined with wireless communication

Applications• Automotive …….. • Mobile Terminals • Infrastructure• Cameras

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

u – blox

Your position is our focus

Start up / Business Plan in 1999

New Strategy in 2002 & 2010

- technology adapter (not developer) mainly in Thalwil (CH)

- niche markets globally (APA, NAM, EU)

- fabless (no own manufacturing)

- include communication (as of 2010)

Sales Growth 2002 – 2010 from 1 mio to 140 mio CHF

Profit Growth from neg. to 18 mio CHF

People from 10 to 200

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

12291

Entrepreneurial Value Creation: HILTI

… strives for enthusiastic customers ……… wants to be recognized as a value creator for its customers…

… active in the building / construction sector …….

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Potential for Potential for improvement:improvement:

20%20%

TechnicallyTechnicallystraight forward, little straight forward, little competitioncompetition measure and

set marks28%

drill 17%

fill 10%

fix 10%

assemble 14%

finish 21%

Technically Technically demanding, demanding, fierce competition fierce competition

Potential for Potential for Improvement: Improvement:

4 %4 %

Innovations: How to get there? The Lead User Approach (by HILTI)

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich21

Strategic management process

I. Strategic Objectivesand Preparation

VI. Performance Management

II. Situation Analysisand Diagnosis

III. Strategic Options

VI. Strategy Identification

V. StrategyImplementation

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich22

Sustainable profitable growth

R Y G

G

Create enthusiastic customers

Act environmentally responsibleAct socially responsible

Growth Differentiation Productivity

Increased reach with MCS

Effective marketing

Worldwide growth

Develop new business

RYG Hold price premiums

Differentiated products

Differentiated services

Brand management

Direct customer relations/segmentation

Accelerate COGS reduction

Turnaround MR productivity

Improve PPM process efficiency

Improve SC productivity

Improve support productivity

People development

Continue culture journey

Develop from within

Attract and integrate great peopleGRY

RY

GRY

RYG

R Y G R Y

GR Y

GR YR Y G GR Y

GR Y

RYG

GRY

RYG

GRY

GRY

GRY

YGR

RYG

GRY

YGR

YGR

GRY

Balanced Scorecard – an example

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich23

Strategicperformance

Time

high

large

small

AnticipatoryReactive

Crisis

Source: [1] Nick Fry and Peter Killing, “Strategic Analysis and Action”, Fourth Edition, Prentice Hall Canada, 2000.

The change curve Entrepreneurial Implications

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich

Leader

vision

intuition

conviction

determination

courage

Do the right things

Manager+

objectives

allocation

knowledge

perseverance

organisation

Do things right

+ Communicator

Make them known

The Entrepreneur

Prof. Fritz Fahrni, PhDTechnology Management and Entrepreneurship

Former CEO SULZER Corp.

Swiss FederalInstitute of TechnologyZurich