A new CEO had been appointed to this large global telecommunications company. The company had been successful but was always very product-centric. However, the competitive landscape was changing as the company’s main customers were consolidating and gaining power in market share. These customers no longer wanted to purchase stand-alone products, but wanted a customized and unique group of products that worked seamlessly together. Furthermore, since the power structure was in the regions, a sales person 5 levels down was calling on one of the company’s top 3 global customers and she had little or no power to marshal the resources needed to satisfy that customer’s demands.
Add a dedicated and highly professional sales and marketing organization that is more customer-centric. Specifically this means creating powerful customer teams, one for each large customer. Appoint talented general managers, who are more than just sales people, to head the new teams and give them budget power and resources. Through the customer teams, develop unique product lines and create specific solutions designed to satisfy customer demands. And finally, install the infrastructure to back it all up. This includes linking the customer teams with the product lines through joint planning processes and common accounting and information systems.
300 engineers moved from the R&D and product groups onto several major customer teams. The company’s global market share of total products and services sold was up by 39% in the following year.
The CEO of this large global electronics company contacted us for help in organizing the top leadership group to better manage the business portfolio, as well as provide for succession planning. The top leadership group functioned much like an internal board of directors, as is common in many Germanic companies. Furthermore, in this country, the board members are personally liable for missteps. The key question to be solved was what was the best division of responsibilities among the board members?
We presented an array of different options along with the pros and cons of each. We gave detailed examples of how and why particular companies had organized under each of the given options. This was eye-opening for the board and CEO since they had set forth a more limited set of options. Their solutions were, as is often the case with internal groups, based on the specific people currently in the organization.
Following the discussions, the board chose to report all the businesses grouped into 3 global sectors to the CEO, while the board members became responsible for the numerous cross-business issues, such as innovation, regional coordination and global business development opportunities. From 2006 to 2007, income from operations increased by 54 percent and gross margins rose nearly 5 percent to 34.2 percent.
A diversified global financial services company contacted us to help them define the top-level structure as well as create roles for talent development and future succession planning. The company was structured around geographies, primarily the United States and an international division that encompassed the rest of the world.
Reduce the geographic barriers by setting up two global businesses, one for B2B and the other B2C. Under each global business, report into it a number of self-standing but related business units that will help to develop general management talent and provide a pipeline for succession planning.
The company achieved better global growth and coordination. They also provided much better and more timely service to their large global commercial customers as well as to international consumers. Despite weakness in the US economy, the company’s revenues from foreign transactions increased by 14%.