Swedish manufacturing company in crisis – interim CEO drives successful turnaround

In the middle of the magical Swedish summer, I want to share a case study to entertain you during your morning coffee.

I find case studies a great way to gain insights and inspiration on how to solve problems, how to lead a team during a transition, andwhat works and what doesn't.

This case study is about a well-known Swedish company with foreign owners. The company bled money and the financiers were forcing a change of the CEO. The owners decided to engage an interim CEO while finding the permanent solution.

Background

The company is a well-known Swedish company, part of a small group with foreign owners. The company was almost bankrupt, motivation in the organization was lacking, but the loyalty was high.

Assignment and Challenge

An interim CEO was appointed for 6-8 months to create a turnaround strategy and begin implementation of measures that wold ensure the continued operation.

What did the interim CEO do?

• The business was mapped through conversations with employees to quickly create an overview of the situation
• Simple improvements based on the organization’s proposals were implemented with immediate effect and with a focus on improvements in cash flow
• An in-depth analysis to diagnose was carried out and an action plan with an economic forecast was developed leading to:
• Clear goals and strategies were defined
• KPIs, cost estimates and a clear organization was established
• Internal processes and context after staff cuts were streamlined
• Internal competencies were developed
• Clear distribution strategy and customer segmentation, and increased sales and market focus were established
• People in charge of product and customer profitability and for product range control were appointed
• Integration and synergies within the Group were strengthened
• Focus were put on working capital to optimize cash flow

The conclusion showed that regardless of the result of the improvement work, the business needed a capital injection. The owners, therefore, decided to divest parts of the company.

The Result

• Large parts of the change work were carried out as planned, in parallel with finding a financial solution
• A new ownership structure was established
• The company is now run according to the same plan with new owners, changed organization, new ways of working and an upgraded way of doing business
• A turnaround has been partly undertaken. The next step will be to take on the revenue side
• The company now works with profitability responsibility, plans and common goals where all employees have defined their own priorities to achieve profitability. Much work remains to be done but the company is on the right track

Reflections of the interim CEO

“As an interim, you have several clients and it is important to identify and communicate what has value for the various stakeholders: the client, new investors and the business itself in the form of customers, suppliers and employees.

You never know where that happens in an interim mission, the conditions can change completely. Perhaps the mission statement is not based on a correct understanding of the challenge – clarity must first be created. As interim CEO for a turnaround, you shift up a gear to quickly find solutions, create results and deliver value. You can rest after the assignment has ended!”