3 questions to smart minds

Internal carve-out as transformation

For this 3 questions to Curt-Oliver Luchtenberg

Eight Advi­sory in Cologne
Photo: Curt-Oliver Luchtenberg
12. July 2023

There has been a massive increase in the number of crises that are putting pres­sure on indi­vi­dual sectors or rather our entire economy. In addi­tion to tradi­tio­nal perfor­mance and working capi­tal acti­vi­ties, corpo­ra­tes today must also consider selec­tively selling (as yet) unpro­fi­ta­ble busi­ness acti­vi­ties or taking joint venture part­ners on board. Which indus­tries in parti­cu­lar need to change here? 

For this 3 ques­ti­ons to Curt-Oliver Luch­ten­berg, Head of Trans­for­ma­tion Consul­ting with a focus on Stra­tegy & Opera­ti­ons at Eight Advi­sory in Colo­gne, Germany

1. What opti­ons for respon­ding do corpo­ra­tes have that have been caught up in the crisis in the context of multi­ple global upheavals?

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.

2. Are there any indus­tries that are parti­cu­larly affec­ted by this? Indus­tries where this is piling up?

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.

3. As a consul­tant, how do you ensure that you are not just produ­cing more work for compa­nies in this alre­ady tense time, but that you are helping quickly and comprehensively?

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.

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