COO and General Manager

Transcription

1 Case Study COO and General Manager Tele Columbus GmbH & Co. KG Interim brief Customer: Tele Columbus GmbH Interim manager: Karl Kornwolf, 41 Time frame: 21 months (March 2007 to December 2008) Location: Hanover and Berlin Function: COO and General Manager Size of the company: 500 employees, around Euro 300 m in annual sales The assignment After merging three cable network operator SMEs into one company in 2007, a new corporate strategy had to be found. The focus of the strategic program was on designing and implementing a sales-improvement project, the objective of which was to generate a significant increase in EBITDA while at the same time securing the core business with B2B customers. About Tele Columbus Tele Columbus Group arose out of the merger of regional cable network operators and has a history that reaches back to 1972 the year in which cable TV was launched in Germany. Long known only to corporate clients as a technical infrastructure operator, the consumer market now sees Tele Columbus as an attractive full-service telecommunications partner for television, telephone and Internet. With around three million households in its clientele, Tele Columbus Group is today one of Germany s major cable network operators. Interview with Karl Kornwolf Portrait. Karl Kornwolf (41), interim manager since 2006, has extensive expertise in the operative management and restructuring of technically-oriented sales organizations. He has been in charge of numerous highly successful strategy-development projects in the communication industry. As an interim manager Karl Kornwolf was a member of the management of Tele Columbus Group from February to December 2008, as Chief Operating Officer (COO) and as General Manager of the Group s sales company. Since 2007 the management and investors have charged him with developing the Group s corporate strategy in his capacity as Vice President Business Development, as well as other major corporate development projects. From 2005 to 2006 Karl Kornwolf was responsible for global sales with key customers at BenQ Corporation, and prior to that he managed reorganization projects for Siemens AG. He began his career in 1997 at CSC Ploenzke AG. Mr. Kornwolf, which functions and responsibilities did you have as an interim manager at Tele Columbus?«In the almost two years I spent at Tele Columbus I was responsible for three mandates. The management and investors initially employed me in the position of Vice President Business Development in early My task here was to develop the corporate strategy and execute an implementation project that included evaluating the network infrastructure, helping set up key account man- agement and introducing operative sales controlling. After that I was put in charge of the Group s sales company, where I was entrusted with designing and implementing a sales growth project. This was by far the most ambitious of my assignments here. Finally in my capacity as Chief Operating Officer (COO) I was in charge of all the technical divisions of the cable network provider, the information technology and process and data management. This included the key tasks of realigning and building up the infrastructure in Berlin. 1

2 What objectives were you set?«when I joined Tele Columbus, the company had just started in its current form and was in the midst of a restructuring phase. Once the strategic work and the restructuring were finished, the sales project was the focus, with the goal of achieving a major improvement in the EBITDA within two years. My objective was to considerably raise the company s value without endangering the customer and contractual base. The company wanted me to make sure that the investments made in infrastructure in the previous years were reflected in a new pricing structure in line with the market. In particular the sales operations with business customers had to become much more effective. That means that the corporate strategy and the plan for its implementation that you developed were based on hard facts?«yes. I worked with an absolute result and success orientation. The objective was a predetermined EBITDA increase per year. There was also a requirement to achieve a defined P&L effect in each business year. That is also the reason why I quickly took on responsibility for the business side of operations as general manager, after my first position as Vice President in Business Development with a focus on strategy development. I needed access to all resources and the freedom to act operatively. That was one of the main success factors in my efforts to achieve the set goals and a clear commitment from me to the client, its staff and customers. The investors in Tele Columbus set you some very ambitious goals. Do you think that interim managers are typically faced with such challenging demands?«of course, on this project the company s biggest value driver was my responsibility. If you look at the 100 biggest German companies there is virtually none that can boast such an earnings increase within the space of just one year. In that respect the bar was set quite high. But, with what I had learned as an interim manager, especially in the field of sales, I was very optimistic that it would be possible to achieve the goals with the right concept. And I already knew the customer and financial structures of Tele Columbus very well from the strategy development project. As the general manager responsible for operations I was able to activate the right levers quickly. What was the situation in the company when you started your project?«in most companies, projects don t run one after the other, but at the same time. This was also the case at Tele Columbus. Parallel to the sales improvement project, the restructuring had to be completed, a new program platform installed and a transmitter adjustment made. All this led to a need for much more communication with our customers and considerable technical resources. The acquisition of another cable network operator, the carve-out of networks after the sale of a number of regional companies and the consolidation of our IT systems, which had already been launched, were also tasks we had to deal with during this time. It was an enormous management challenge for all of us, and my colleagues did a magnificent job. The preparations for the sales improvement project began in the sales teams in November 2007, with the actual implementation commencing in April 2008 after the business plan was completed. The precondition was that the core business cable network sales with B2B customers would not be marred by the price changes, because agreements with validity periods of ten to twelve years and good long-term customer relationships ensure stable, sustainable sales income and are thus an extremely valuable asset for the company. How many customers does the company have and how did you approach them?«this question was crucial in our considerations. What is the customer structure and what contracts do we have? Knowing these fundamental facts is an essen- Portrait. Markus Schmid (43) has been Chief Executive Officer (CEO) and President of Tele Columbus Group since May 2008, responsible for the overall company management and the staff divisions Media Politics and New Business, Technology and IP, Legal and Communication. In addition, he has also been CEO and chairman of Prima- Com AG since April 2008, a cable company affiliated to Tele Columbus Group. Since 2007 he has been responsible for building up a B2C organization in his capacity as member of the management of Tele Columbus GmbH. Prior to that Markus Schmid was Sales and Marketing CEO at Premiere AG and on the board of Premiere Austria. 2

3 The Tele Columbus products: television, Internet, telephone tial prerequisite to successfully running a company. From my intense strategy-development work, I already knew the network and customer structures exactly. Tele Columbus has around two million end customers in direct contractual relationships and through around 20,000 B2B customers of varying size. It was clear to me from the outset that we had to speak and negotiate with the key customers personally. The management ran the most important negotiations itself. The smaller B2B customers and our end customers were addressed in several waves of typical mass processing through our call centers and mailing campaigns. How did you assert the new prices?«we quickly found out that we couldn t approach our customers in segments and successively by region as we had initially thought would be the case. We had to inform all of them about the price hike at the same time. We had to act quickly and meticulously, because it goes without saying that a process of this kind attracts a lot of attention from organizations in the housing industry and consumer associations. The justification for the new conditions was of great importance. Alongside basic contractual conditions that enabled a price increase in principle, we were also in the situation that we had offered many services and made Interview with Markus Schmid Why did you decide to call on the services of an interim manager?«i was faced with the task of converting an infrastructure-oriented network operator with traditional structures into a service brand that successfully addresses end customers. This realignment couldn t be achieved in the planned time span with the internal management and expertise alone. Given the situation and the large number of change projects with limited time frames, interim management was the fastest, and indeed the only way to ensure that we would achieve what we set out to do. What demands did you place on the interim manager? «It was of great importance to find just the right person for the realignment of Tele Columbus. We were looking for a manager who could quickly drive forward the corporate strategy and company development with his management experience in the field of restructuring, in particular in the IT and telecom sector. But change processes also require flexibility, which is why we were also able to use the manager on other subsequent high-priority projects: the realization of our sales improvement project and the realignment and build-up of our network infrastructure in Berlin. 3

4 many investments in the previous years without asking market prices for them. Indeed, some of what we did we didn t charge for at all, and this despite the fact that Tele Columbus compares well with the competition with regard to the quality of its services. What is more, taking the other road of price dumping would ultimately lead to poorer service for the consumer and thus, in the long term, to major losses of customers. Despite the ambitious goals, I think we did a good job of not asserting the price increase as much as working out constructive compromises with the clientele. How did customers and the general public react to the price hike and how were you able to deal with the conflicts?«any conflicts that arose generally had totally different causes than the price rise. Most of the customers understood the reasons that I described. It was, of course, regrettable that some customers voiced some dissatisfaction, and some bad press and difficult discussions with the associations were unavoidable. But because our customer relationships are very stable thanks to the many years in which they have been built up and consolidated on the back of excellent cooperation and many excellent solutions, there was no major resistance. The implementation was accompanied by some criticism that was certainly understandable from an emotional point of view, but all in all it was characterized not by conflicts, especially on the part of the B2B customers, but by intensive discussion. What was the biggest risk in the project?«first of all we had to get the sales staff on board the project. They were worried about their good customer relationships. But we presented them with a good concept, our reasoning for the increase made sense, and we repeatedly pointed out that in cases of doubt we would choose the path of negotiation. By far the biggest risk, however, lay in reaching the more than two million end customers and around 20,000 B2B customers in little more than three months. From a logistical point of view this was a mammoth task, but essential if we were to generate a significant earnings improvement within the space of just one year. We had to install a new churn-prevention process, considerably improve the customer recovery procedures, and add new workflows to the systems. For this project and a small number of other customer-related measures we trained 120 new external staff in addition to the 150 agents we already had working in our call centers, and provided them with workstations within just a few weeks. Each Key Accounter was given a precise time schedule and detailed contractual data for visiting and informing the customers. The biggest challenge was managing that effectively without having the luxury of being able to make any major mistakes. There were many decisions that could only have success or total failure as their possible outcomes, so we rightfully had an enormous amount of respect for this task. What are the characteristics that distinguish an interim manager?«one central quality of interim managers is their pronounced result orientation their ability to actually achieve something. It s not about running projects, but about taking them to a successful conclusion within very tight time frames. In our specific case, the personal management culture that an interim manager can bring to the table was also important. In the realignment, which also always means a change of culture, the employees need managers to be role models that embody the new style and culture. The know-how and experience that interim managers bring into a company, and that they leave there even after they have left, are of course yet another aspect. Would you turn to Atreus Interim Management again if faced with a similar situation?«how satisfied we were can already be seen in the fact that three Atreus managers, who were initially only called upon for a limited period of time, have now taken on permanent management positions in our company. So of course I would definitely recommend Atreus to others, and I am very happy with our excellent partnership. 4

5 The gateway to the world of digital television. With the digital receiver and SmartCard, TeleColumbus customers can enjoy their digital TV programs in outstanding picture and sound quality. How did you organize the project work in the team?«our core team comprised internal managers, interim managers and various advisors. We had meetings almost every day, some of which went on till late at night. In addition, small teams were built up around the regional heads in the sales regions, with each team member having a clearly defined job to do. There were status meetings within the core teams every week to ensure that everything was prepared exactly. My core team, the Key Accounters and the regional heads also met every week to coordinate the operative sales work. The meetings with the customers were discussed with each Key Account Manager, the tactic for the negotiations planned and the effect on earnings that would be achieved calculated on the basis of real sales figures. This twofold controlling with standardized, closely knit reporting and analysis formats over an extended period of time were further key prerequisites for the success of the project. This was the only way the management could concentrate on the most important negotiations and reach the necessary compromises. The gateway to the world of digital television. With the digital receiver and SmartCard, TeleColumbus customers can enjoy their digital TV programs in outstanding picture and sound quality. segments. But the greatest success for me personally was the excellent and close collaboration with the sales team after their initial concerns about the project; that we managed to inject the conviction and the power to implement it into the company. Together we have achieved something that nobody thought possible, and that we can all be proud of. How did you measure the success of your project?«we succeeded in largely fulfilling the investors very ambitious EBITDA objectives. As I said, we were helped here by strict controlling, but there are other basic factors that are also of great importance. For example, did we lose customers? Not many. We remained well above our own expectations in this respect in both customer Atreus GmbH Landshuter Allee Munich (Germany) Phone: +49 (0) Fax: +49 (0) nagel@atreus.de 5

6 We create success Atreus GmbH Munich (Germany) Landshuter Allee 10 Phone: +49 (0) Fax: +49 (0) Bad Homburg Frankfurt am Main (Germany) Ferdinandstraße 6 Phone: +49 (0) Fax: +49 (0) contact@atreus.de