When organizational issues threaten performance
A global technology leader’s operations in Europe, the Middle East, and Africa (EMEA) were facing significant competitive and market challenges. Profits were drying up and revenues had been slipping for nearly a decade—and those were just the most-visible signs of several widespread organizational issues. Only a small minority of the organization’s business units were profitable. Duplication of effort plagued decentralized support functions, processes varied from one location to another, and multiple IT systems and networks made it all but impossible to produce consistent data and run efficient operations. Performance management was ineffective, and even though the EMEA business had divested many assets in recent years, it had not adapted its organizational structure to keep pace with its new requirements and target size.
The organization clearly had to undergo significant change—but it couldn’t manage a transformation of such scale on its own. Global management engaged AlixPartners to help develop and manage a program that would deliver €100 million in annual profit improvement and also position the organization to return to growth.
A stronger foundation sets the stage for recovery
The program we developed spanned the entire EMEA region and touched every one of the organization’s operations and functions. Our plan called for reorganizing the business by country clusters and customer segments to streamline operations and eliminate duplication. It also called for centralized support functions, a more realistic allocation of resources, and a reduction in management layers. We also identified savings opportunities in direct and indirect procurement and recommended that the EMEA organization divest noncore assets. And we optimized the organization’s go-to-market approach. Then we developed budgets and financial targets designed to improve margins and cash flow, sharpen the focus on customers, boost operating units’ performance, and rebuild the core business.
When it really matters
The program we developed has laid the foundation for a return to sustainable growth. This EMEA organization has made strategic investments in selected business units, sharpened its sales channel strategy, and added more solutions to its mix of products and services. It met its goal for improving profits annually by implementing the sequence of actions we mapped out, including improved procurement and supply chain management, reduction of management layers and spans of control, and decreases in overhead costs. The company has emerged from its turnaround as a profitable organization with centralized support functions and a more effective structure designed to promote revenue growth.