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A Creative Approach to Leadership Assessments

By Davide Anerdi, Senior Consultant
Region: Italy

Sector focus: Automotive

WHEN A GERMAN AUTOMOTIVE MANUFACTURER NEEDED TO PIVOT AWAY FROM ONE SEGMENT OF THEIR BUSINESS IN ITALY, THEY REACHED OUT TO US FOR HELP IN CHOOSING THE BEST COURSE OF ACTION.
IN SUCH A COMPLEX INDUSTRY AS AUTOMOTIVE MANUFACTURING, EACH BUSINESS DECISION HAS SOCIAL, POLITICAL, AND ECONOMIC CONSEQUENCES, SO I HELPED THE CLIENT DEVELOP A COURSE OF ACTION THAT WOULD MAXIMIZE POSITIVE OUTCOMES IN EACH AREA.
THE AUTOMOTIVE MANUFACTURER REACHED OUT WHEN THEY REALIZED THAT SOME PARTS OF THEIR BUSINESS NEEDED TO BE MADE REDUNDANT DUE TO CHANGING MARKET, TECHNOLOGY, AND MANUFACTURING PRACTICES. IN PARTICULAR, THEY DECIDED TO DIVEST SPECIFIC MANUFACTURING SITES, SELECTED EQUIPMENT AND A HUGE PORTION OF THEIR WORKFORCE. TO MOVE FORWARD, THEY NEEDED ASSISTANCE ANALYZING EACH OF THOSE THREE ASSETS AND DECIDING WHICH COULD BE TRANSFERRED OR REALLOCATED.
MY TEAM AND I BEGAN BY INTERVIEWING CORPORATE LEADERSHIP. THEN, WE CONDUCTED A STRUCTURED ANALYSIS OF THE ENTIRE ORGANIZATION. ONCE WE HAD A PICTURE OF THE CURRENT STATE OF THE BUSINESS, WE EVALUATED DIFFERENT OUTCOMES BASED ON THEIR SOCIAL, POLITICAL, AND ECONOMIC CONSEQUENCES.
WHEREAS OTHER AUTOMOTIVE MANUFACTURERS TYPICALLY SHUT DOWN OPERATIONS WHEN THEY ARE NO LONGER PROFITABLE, MY TEAM AND I WORKED TO FIND OTHER POTENTIAL SOLUTIONS. THAT INCLUDED IDENTIFYING POSSIBLE INVESTORS AND ASSISTING IN DUE DILIGENCE AND NEGOTIATIONS.
AT EACH STEP OF THE PROCESS, WE MET WITH THE CLIENT’S LEADERSHIP TEAM TO REVIEW OUR ANALYSIS AND SUGGESTIONS. WE ALSO RAN PROGRAMS WITH THE CLIENT’S MANAGEMENT TEAM TO MAKE SURE THE STRATEGY CAME ORGANICALLY FROM THEIR CULTURE AND VALUES.
THE CLIENT WAS ABLE TO LEVERAGE OUR ANALYSIS TO REALLOCATE SPECIFIC PARTS OF ITS BUSINESS TO AN OUTSIDE INVESTOR. THIS INVESTOR WAS CHOSEN FROM A SHORTLIST BASED ON ITS GROWTH PLANS, THE POTENTIAL FOR FINANCIAL SOLIDITY, BUSINESS PLAN, AND—MOST IMPORTANTLY—A FIRM COMMITMENT TO HIRING THE EXISTING 266 WORKERS.
NOT ONLY DID THIS KEEP PEOPLE EMPLOYED, BUT IT ALSO KEPT MY CLIENT IN GOOD STANDING WITH LABOR UNIONS AT THE ITALIAN AND EUROPEAN LEVELS. IN ADDITION, THE INVESTMENT ALLOWED MY CLIENT TO EXIT THE MARKET MORE QUICKLY WITHOUT TRIGGERING DE-INDUSTRIALIZATION CONSEQUENCES. EVEN THE MEDIA COVERED THE SITUATION AS A POSITIVE CHANGE.

As business practices evolve, organizations must make difficult decisions about assets and labor. My client stayed positive throughout and followed the data with rational thinking to find creative solutions. Rather than shutting down operations and making 266 employees redundant, they found an investor who could capitalize on trained labor and existing equipment. That way, the client could exit from the part of their business that was no longer profitable without putting people or capital out of work. At the end of the day, a potentially negative situation turned out to be a win-win for everyone involved.

Davide Anerdi, Consultant
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