Internal carve-out as transformation
First and foremost, of course, tackling issues, some of them unpleasant, that were “left undone” in good times. The majority of the requests we currently receive are aimed at providing management with hands-on support in optimizing working capital management, leveraging process efficiencies, streamlining organizational structures, optimizing asset structures, rethinking sales strategies and leveraging untapped revenue potential.
If this “homework” has been done, but the company’s situation is still not improving in the foreseeable future, the portfolio must be put to the test. Are there activities that can or perhaps must be divested to minimize losses or/and significantly improve liquidity? As difficult as it may seem at first glance to part with long-established business activities, this should also be seen as an opportunity for reorientation and possibly the development of new business areas.
Having grown up in an automotive supplier family myself, it’s incredibly hard for me to see that the automotive industry will continue to be the focus here. Not only the mechanical supplier industry remains under massive pressure, but also innovative product providers, e.g. in infotainment, up to and including the OEMs themselves, are facing increasingly fierce competition.
Another typical German industry is also currently in trouble: the chemical sector. Some major players are currently undergoing painful restructuring programs or are even in sales negotiations. Broadly speaking, other sectors of “industrial manufacturing,” from furniture and household appliances to mechanical engineering, also need to take comprehensive action quickly.
First, by setting the right focus from the beginning. Before individual problems are addressed, an overall picture must be established quickly but reliably. Because it makes only limited sense, for example, to spend months negotiating to improve payment terms if the underlying product groups are foreseeably going to remain unprofitable. Or to undertake costly restructuring in business areas that, from a strategic long-term perspective, will have no future in their own company. With our “Acceler8or” program, we ensure that management knows in three to four weeks which challenges need to be addressed and in what order.
Secondly, by providing the management with only a small but highly senior and experienced number of consultants. Colleagues who have themselves held management positions in the automotive industry, chemical industry or industrial manufacturing. And third, in that we take a functionally holistic view of the problems. Improving sales is not only necessarily the task of the sales department. Without the help of Operations, HR, Finance, and of course IT, even the best salesperson is often powerless.
About Curt-Oliver Luchtenberg
Head of Transformation in the DACH region and Partner Strategy & Operations at Eight Advisory Germany. He heads the Cologne office and has more than 20 years of experience in strategy, transformation and restructuring consulting. His specialties include portfolio and growth strategies, planning and execution of integrations & carve-outs, as well as performance and working capital improvement.
Prior to joining Eight Advisory in 2022, he spent over eight years as Sector Lead Industrial Manufacturing within Deal Advisory at KPMG and nearly seven years in the Operational Transaction Services Practice at EY. Prior to that, he worked as a consultant in the strategy team of Mitchell Madison Group and in the restructuring team of Roland Berger.