Shaping Imtech for UK Growth

Executive Summary

This project started with a loose affiliation of regional legacy companies and ended with a single £600M category-leading UK Engineering Services group with 3800 staff. Described here is Imtech UK’s journey to this position, and the role Curzon played in helping the leadership and management teams get there.

Project Shape delivered a unifying strategy built on broad engagement across management, and the comprehensive operating model redesign and organisational restructure needed for execution. It completed in November 2013, and in its eighteen month duration Imtech’s UK turnover grew by 25%. In Project Shape and ensuing Curzon assignments, our client valued being “worked together with” rather than “consulted to”, and an approach which blended cultural sensitivity with challenge, change expertise, and pragmatism.

Project and approach

The challenge

Imtech’s UK interests had grown rapidly by acquisition, registering 2011 turnover of £420m with 3.7% EBIT. Their Dutch parent, Imtech NV, was determined to build a strong position within Engineering Services. The acquired companies provided mechanical and electrical design, installation and maintenance services to the construction industry. Imtech had also diversified around core Engineering Services, adding Waste, Water and Energy sectors and specialist units delivering control systems for nuclear plants, airport lighting and technical facilities management outsourcing.

In total there were seven legacy companies with different cultures generating twelve separate P&Ls. As a UK company Imtech existed on paper but not in practice. The parent company wanted to keep the acquired companies running semi-autonomously, but this was beginning to cause problems. In January 2012, the incoming CEO Paul Kavanagh described the challenge to Nigel Waterson, Curzon Partner:

“I’ve had a carpenter in again for the third time…to extend the Boardroom table!”

All seven companies were squeezed around the table, each with MD and FD in attendance. This sign of lack of integration pointed up the opportunities:

•  Largely regional businesses with localised client bases; all competing in the London market – sometimes against each other
•  No co-ordinated approach to major clients operating UK-wide
•  Lacked common view of sales opportunities and resource allocation
•  Geographic overlapping of offices and staff
•  Different approaches to delivering the same types of service, causing wide variations in performance

Paul was determined this must change.

The solution and objectives

The solution was to shape the company strategy and structure to an operating model and governance that would boost growth. The overarching objective was and remains: to grow profitably to £950M turnover in the next five years. Project Shape launched in June 2012 and, after its conclusion in November 2013, the Imtech-Curzon partnership evolved with follow-through assignments in 2014 (see below)

Phase 3 – Operating Model Detailed Design & Organisation Restructure

This phase was about delivering the micro operating model design, the associated organisational restructure, making go/no-go decisions and starting to implement change. Curzon managed the Phase 3 programme:

• Supporting the process of aligning leadership to the path forward
• Facilitating agreement on strategy and 2015 ambition
• Facilitating organisational design decisions and implementation plans
• Shape the work of the new market analysis teams
• Sizing cost reduction opportunities, including Shared Services
• Designing the key components of People Strategy
• Defining the next phase’s Implementation and Change Roadmap

Phase 4 Sales Approach

The operating model redesign was an opportunity to align the multiple legacy parts of the business, and to optimise how Business Development is co-ordinated. So in early 2013 Curzon and Imtech worked together to improve sales focus and effectiveness, to deliver a combined Engineering Services result of +£250m for the year. This meant:

•  Each Engineering Services MD understand the new Business Development approach to apply across Imtech for clients, projects and sectors, and preparing plans in-line to realise his/her targets
•  A clear method of working and accountabilities in the Business Development process
•  A clearly defined incentivisation model
•  Agreeing the structure and content of a Business Development dashboard andmaking it operational
•  Safeguarding baseline Business As Usual sales performance

Closeout – The ‘Moving On’ Day

As in any operating model change, clear communication is crucial. There had been a programme of senior management briefings to staff through 2012 and 2013, culminating in the ‘Moving On’ day in December 2013 – a mobilisation event that engaged ninety managers. A “blue book” was prepared in the months before to summarise the strategy Imtech had embarked on, and connect it to the objectives of the business streams and functions.

Curzon worked with Imtech MDs to develop the communications content, the event flow, and to rehearse their participation. Weeks of preparation resulted in a highly successful mobilisation event. Operational managers were engaged and coached in how to articulate Imtech’s strategy and objectives. In a company with c4000 staff spread around the UK this event proved very effective in anchoring the operating model changes and equipping managers to plan and communicate the required transformation.

After Project Shape

Curzon continued to partner Imtech through 2014, applying specialist strategy and business operations expertise to:

• Reduce Working Capital – achieved a €13m reduction in WIP and debtors in three months
• Refresh the five year strategy of the Waste, Water & Energy business unit – resulted in realignment of sales effort towards priority and emerging sectors
• Create a granular 2015 business plan and assess opportunities in the indirect cost base (started November 2014)

How the process was managed and difficulties were tackled

The CEO worked directly on Project Shape’s design with Nigel Waterson. Nigel was joined by Ava Butler, an Organisational Development consultant. Ava’s forte is working with Boards on operating model design and implementation; she has authored books on Board dynamics and facilitation.

Both Imtech and Curzon added staff to the project as required. At peak, five consultants and twenty Imtech staff were involved full time. The small Curzon team acted as trusted advisors to leadership and guided a large joint team comprising the Imtech MDs, central function managers and their direct reports. This meant a lot of the transformation workload was shouldered by Imtech staff, which drove the ownership and buy-in necessary for the project’s success.

When difficulties arose they were dealt with inside individual work streams. Stream meetings would close with a review of benefits and concerns, with point actions agreed in forum to directly address concerns. Sometimes difficulties triggered the need for broader involvement and a workshop specifically targeted at the problem. In other cases escalation to the Board or CEO was required. Forward planning and clear expectation setting kept the number of unforeseen problems to a minimum.

The approach taken by Curzon and how their skills supported the project

Nigel’s formative years at Gemini Consulting taught him how large transformation projects should be managed. Having worked with Professor Chan Kim of Insead on post- merger integration in Philips, he knew how a fair process and large-scale engagement in workshops could accelerate understanding and change adoption.

The initial process to derive the UK strategy drew together all existing strategy perspectives from Imtech’s top forty senior managers, and injected them into a two day strategy formulation and alignment workshop. This explored value chains for the businesses and fed insights into a “Venkat” competitive matrix for service capabilities. The process was designed by Professor N Venkatramen and is an excellent way to facilitate strategy discussion and agreement.

This work led directly into more analysis of high potential areas, with a joint team approach.

Ava Butler closely managed the third phase. This involved a substantial restructure to create three regional Engineering Services business streams and the consolidation of the technical maintenance functions under one business stream. Ava’s prior experience of corporate restructuring programmes at Board level in many sectors inspired confidence in Paul and his managers.

To evaluate the Shared Services opportunity we brought in Will Beck, a consultant with long experience in engineering companies including a project that saved £200m+ from ICI’s procurement. He found that, although there were substantial back offices in a number of the businesses, the scale of benefit was not large enough to justify the effort. Avoiding nugatory work on shared services was seen as a positive outcome by Imtech.

Likewise the Sales Approach work drew on James Black’s experience to rationalise approach between the businesses. James has a long track record in sales and marketing optimisation, including senior roles in Gemini Consulting and PA Consulting. His forthright style was a good match for the task of drawing senior sales people and MDs together.

The client/consultant relationship, including how the consultants positively challenged the client’s thinking

This was characterised by:

•  A shared approach to project governance – Paul had clarity on many pointsthat needed to change but was always open to ideas and refining the design through discussion with Nigel and Ava
•  Trust – the large-scale Venkat engagement at the outset was an act of faith for Paul and his team. No one in the business had experienced a project of this breadth and intensity, and there was a wariness of consultancies. Though risky, they accepted Curzon’s counsel and embraced the project’s high-profile start
•  Powerful communications – Curzon introduced the Blue Book, a small A5 document which captured Imtech’s vision, mission, strategy, values and business stream plans. We previously created a very popular Blue Book for Veolia Water in their transformation to compete in the deregulated market. Paul liked the concept and we produced the Imtech Blue Book titled ‘Our Strategy’. Today it’s in the hands of every Imtech manager with its content cascaded to all staff
•  High impact mobilisation – the Moving On day was an innovative event designed and facilitated by Curzon. It drew on Nigel’s previous experience of running action-orientated mobilisation events, using a ‘trade show’ structure to focus attention on how each business area would execute strategy. Plenary opening and closing sessions, where Paul and others spoke with conviction on Imtech’s future, were impactful.

Outcomes

The extent to which project objectives were met

When Project Shape concluded, the ninety managers at the Moving On session were in no doubt the business had changed. The legacy businesses had been rebranded, there was a small Group Board with a clear role and agenda, and the Engineering and Technical Facilities Management teams had new governance structures. There was also regular collaborative sales planning and a structure for Key Account management. Sales teams were targeting new markets as defined by the strategy. Underpinning this was a comprehensive People plan to target recruitment and appointments to key senior roles were underway.

Challenges that arose and how they were they overcome

Time spent discussing and refining plans was never wasted time

•  Striking a balance between the re-branding drive and possible damage caused by name change – this was particularly relevant with the Inviron brand. It became clear that a longer timeframe was required for change in some of the businesses. Overcoming this demanded clear communication on timing and rationale for the change
•  Dealing fairly with the human consequences of restructure – in some cases prominent members of management changed role or departed the business. The fairness and openness of the inclusive process that Ava ran with close HR liaison ensured this was managed with care

Lessons learnt

•  Time spent discussing and refining plans was never wasted time
•  Give people time to reflect on the consequences of change and time to absorb it
•  Language is important – different legacy business used the same words differently
•  Seek out change agents and let them bring others along
•  The business leader showing integrity at every step is catalytic in the changeMeasurable resultsAt the Moving On meeting Paul showed an independent rankings table published in September 2013 (below). It ranked Imtech as the top performing Mechanical/Electrical contractor, up from second to first spot versus the previous year and growing 25% in revenue terms year on year.

Achieving these results whilst undergoing fundamental restructure was a testament to the Imtech team and, for our part, Curzon.

Qualitative results

Curzon helped Imtech brand itself and operate in the market as a cohesive company, not a loose affiliation of legacy businesses. Imtech is now well positioned to win and retain larger projects, and be a company of choice for talented graduates. Today you will find it holding a strong place in existing markets and confidently building presence in new markets.

Client testimonial

“We tended to avoid consultancies and ran a tough selection process before choosing Curzon, making sure we got the consultants with the right expertise to work with us. It paid off. Nigel and Ava combined sensitivity to our culture with challenge to our strategy thinking and an expert approach to operating model design and organisational change and implementation. Without Curzon we wouldn’t have articulated the strategy as coherently or achieved as broad engagement across the management team. While bringing their approaches to bear, Curzon ensured we owned it at all times. I would recommend Curzon to peers with similar challenges”

Paul Kavanagh – Chief Executive Officer, Imtech Technical Services Ltd

___________________________

NOTE:

If you would like to receive e-mail notification when I post additional blogs on the topic of organizational development, please sign up through this link.   http://eepurl.com/KILan  You may unsubscribe at any time.

You will find my book Mission Critical Meetings: 81 Practical Facilitation Techniques on Amazon. Your feedback and reviews are most welcome.

http://www.amazon.com/Mission-Critical-Meetings-Facilitation-Techniques/dp/1627870377/ref=sr_1_2?s=books&ie=UTF8&qid=1408719109&sr=1-2&keywords=Mission+Critical+Meetings