From Cerius Executives’ international partner firm in Italy: Supporting SMEs (Small and Medium-sized Enterprises) and PSMs (Pocket Size Multinationals) in getting control of acquired companies abroad

Partner: Temporary Management & Capital Advisors

Location: Italy

Client:  An international SME (Small Medium Enterprise) that manufactures equipment for gas treatment and production.

Interim Position: Chief Executive Officer of Italian operation

Timeframe:  6 months

Situation

The client, a small international company involved in the manufacture of equipment for the production and treatment of gas, had recently purchased another small company in Italy and was bringing it into the corporate structure.

The client’s Corporate Headquarters, located in France, decided to have a French CEO to run the business for a few months, before making a local choice.

The three potential internal candidates, who were current directors, were deemed not up to the task.

The competition among the three directors generated significant hostility and added to a poor work environment, with each of them explicitly not willing to accept the other two as the future CEO.

The incoming interim CEO would face some major challenges:

• The need to be recognized as the Italian CEO, fully representing the HQ by the three current directors with the risk to lose them
• Maintain the same level of activity and key people retained
• After the acquisition, the Italian unit lost market share that needed to be gained back
• Re-orient and guide the development process

The Interim Solution

The solution to these issues moved quickly.  Four excellent candidates have been submitted to the client in just four days. After a series of interviews with the Corporate team, one of the candidates was selected and started within one week’s time.  The candidate was not interested in staying as a permanent hire.

Specific goals of the assignment:

Improve the Manufacturing process and product quality

• Optimize the manufacturing process
• Some people not right in many posts: train/replace?
• Supply chain needed to be optimized
• High level of inventory
• Evaluation of make/buy alternatives
• Need to integrate the corporation’s new product range

Bring the unit back to profitability

• Reduce high overhead
• Review the organization chart
• Analysis of manufacturing costs
• Supply chain and purchasing needed to be tuned

Results

Due to the quick arrival of a quality interim CEO, the improvement process began quickly and made considerable progress in a short time.

A “Performance Improvement Program” (PIP) for the Italian business unit was quickly developed and implemented by the interim CEO.

• CEO took responsibility for achieving the financial and non-financial targets of the PIP
• Frequent reporting of PIP to Steering Committee at HQ
• Coordination and implementation of measures of the PIP in alignment with HQ programs
• Preparation of decision templates for the Steering Committee in case of major structural or process improvements within the Program

The Interim CEO was able to successfully solve the internal conflicts among the three directors. Before the end of the assignment, the search for a permanent CEO was started.