Heinz Rotzoll - Restructuring of an automotive supplier as Interim CFO

Project title	Automotive supplier in crisis – restructuring to continue business operations –
Company	Group of companies from the automotive supply industry
Industry	International manufacturer of machined vehicle parts and engine components for the automotive and automotive supply industry. 3 production plants in Germany and abroad. Headquarters in Germany, parent company in India.
Revenues	EUR 170m
Number of employees	About 1.100 employees
Own area of responsibility
Budget	Budget of commercial area
Number of employees	Approx. 40 employees, 5 of them in direct reporting line
Background for the assignment	Development and implementation of a restructuring and reorganization concept to ensure the continuation of the company’s activities (“going concern”)
Situation within the company	“History of losses”, earnings and liquidity crisis, situation threatening the company’s existence Change of shareholders: takeover by Indian shareholders from private equity Interim replacement of the CFO and COO roles Increasing pressure to act as the crisis progresses towards insolvency maturity Decreasing timeframe for root cause analysis and implementation of fast-acting measures
Customer	Indian shareholders
Autonomous role	Interim CFO
Assignment	Interim management of the commercial division (CFO) Ensuring the continuation of business activities (“going concern”) by improving the company’s net assets, financial position and results of operations Development and implementation of a restructuring and reorganization concept, including Realignment of the operating business in close cooperation with the Interim COO Restructuring of the commercial areas Improving the earnings situation by combating operating losses that threaten the company’s existence Sustainable improvement in cash flows from operating activities Digitization of information and business processes
Measures	Management of the specialist departments Finance & Accounting, Controlling, Procurement, IT and Legal Management of 5 direct reports, approx. 40 employees in Germany and abroad Reporting line to the Group COO Preparation of consolidated financial statements Organization, preparation, audit and disclosure of the consolidated financial statements (“going concern” premise) Improving the earnings situation by combating operating losses that threaten the company’s existence Development and implementation of a project income statement on an EBITDA basis Automation of monthly reporting Identification of “onerous contracts” Introduction of post-calculations, comparison of Baseline/CAPEX with current performance Development and implementation of countermeasures Implementation of routines to track this “philosophy” Realignment of the operating business Balance of interests and social plan: Restructuring of central divisions, reduction of indirect employees Relocation of wage-intensive production processes to Romania (relocation of functions) Advice on refinancing and leasing transactions Conducting contract negotiations with customers and suppliers Restructuring of the commercial divisions Creation of a restructuring plan for strategic repositioning Coaching specialists and managers in dealing with upcoming changes Improvement of the organizational structure according to the lean management philosophy Job descriptions with clear allocation of tasks and responsibilities Reduction of approx. 30% of jobs while maintaining motivation and ongoing operations Improvement of workflows and processes resulting in significant cost reductions Consolidation of the Finance & Accounting/Controlling departments in one location Strengthening team spirit and a sense of togetherness Implementation of Group requirements Post-Merger Integration (e.g. accounting guidelines, Code of Conduct) Improvement of the IT system landscape Further implementation of SAP R/3 in the areas of Operations-Logistics (LO)/Finance (FI/CO): MM: Materials Management PP: Production Planning and Control LE: Logistics Execution WM: Warehouse Management FI: Financial Accounting CO: Controlling EC: Enterprise Controlling Binding requirement to use SAP exclusively Utilization of basic functionalities, no Excel, no further special programming permitted Creation of cost transparency, renegotiation of IT service contracts, realization of cost reductions Provision of decision-useful information and KPIs, e.g. production and delivery schedules from SAP Implementation of a document management system Digitization of information and business processes Implementation of the digital document management system (DMS) D3 from d.velop (Enterprise Content Management System) Digital processing of incoming invoices and management of contracts Integration into the existing ERP and quality management environment
Achieved results/outcomes	Securing the restructuring from the commercial side Improving cost structures, restructuring the operating business and commercial areas Creating transparency and providing decision-useful information Optimization of the SAP system landscape in the plants Improving the earnings situation by implementing a project income statement on an EBITDA basis Reducing losses, restoring the profitability of individual projects, terminating onerous contracts where necessary Implementation of document management system, integration into ERP and quality management (QM) environment
Special feature of the project	Culture of Indian customer and contact persons Tense working atmosphere due to the outlined crisis within the company

Special features with regards to the style of leadership:

I paid attention to the particularities of Indian culture.

“Cultural change”, dealing with Indian customers and contact persons
e.g. indirect communication, less commitment to pre-planned deadlines and appointments, “sacred cows”
Maintaining a fundamentally positive image of people

I dealt professionally with the extremely tense working atmosphere.

Dealing constructively with stress and conflicts
Effective and trusting employee appraisals
Refraining from apportioning blame in numerous decision-making and conflict situations
Constructive clarification and decision-making

I restored “real” cooperation within the company.

Breaking down “silo thinking”, thinking in terms of departments, divisions, “armchairs”
Raising awareness of the existence and possible consequences of the “common problem” to be solved
Clarification that the task can only be solved together
Not allowing permanent apportioning of blame
“Looking forward” to the future instead of “looking back” to the past

I eliminated the crisis of trust and introduced a culture of trust.

Abolished the prevailing culture of mistrust, permanent justification, controlling and monitoring
Conflicts between the respective interest groups defused and unity restored among managers
Promotion of personal responsibility, e.g. by ensuring that decisions were made again
Improving employees’ willingness to perform through targeted approaches, e.g. coaching specialists and managers with regards to upcoming changes
Trust as a central management principle because it retains good employees, protects intrinsic motivation and makes the difference as a management tool

I set up and managed interdisciplinary project teams.

Recognizing and using relevant strengths of employees; matching talents and tasks
Selecting the best employees for the task regardless of their organizational position in the company
Triggering multiplier effects within the company by forming interdisciplinary and cross-divisional project teams
Creating and utilizing the momentum that agile project teams ignite throughout the company (“momentum”)

I significantly improved the framework conditions for success.

Reviewing and improving the organizational structure from a lean management perspective, e.g. job descriptions, clear assignment of tasks and responsibilities
Ensuring that specified operational structures are consistently adhered to or do not fall apart
Introduction of an IT-supported project income statement; automation of monthly reporting, relieving controlling of routine work
Elimination of IT-related problems, optimization of the SAP system landscape in the plants, creation of transparency, reduction of complexity, training
Financing provided for equipment investments to secure production capacities (machines, systems, processing centers (CAPEX))

I used meetings as an effective management tool.

Limiting the number of meetings to what is necessary, “jour fixe meetings”
Improving cooperation in the teams, creating a sense of “we”
Preparation of meetings; e.g. preparation and coordination of the agenda
Tight meeting management; achieving a high quality of problem solving, a truly sustainable consensus, creating the opportunity to openly express dissent
Follow-up of meetings; minutes of results, no agenda item without action, monitoring of implementation through consistent follow-up

I approached the problems with a positive and constructive attitude.

Not focusing solely on problems, but also recognizing opportunities that can arise from a seemingly hopeless situation (positive thinking)
The investigation into the origin of the losses took place under extreme time pressure and in a tense working environment
This was only possible because I trusted involved and affected individuals and gave them confidence in their own abilities and the solvability of the task
Counteracting subliminal conflict through constructive participation in psycho-social processes resulting from the changes; providing project acceptance
Ability to draw enough “inner strength” from a few successes to last the entire day and to transfer this inner strength to others