Transitional Growth

Executive summary

Transitional Growth

Transitional Growth changes your level difference with respect to your values, your resources and your mission and transport you in the heart of your vision. At the Eve of the 3rd Millennium, Companies have to concentrate on profits, move the needle from red to black, be ready for the restart with new ideas and seductive products. And this not only to ensure their survival on the market but also to imagine a florid future and be ready to respond to the call for growth that will replace the stall of the global crises. Mr Chinaglia has demonstrated a brilliant business acumen that allows him to analysis the totality of a Company and understand its strong points and its dysfunctional areas, find sustainable solutions and immediately apply them to have a drastic impact on growth. Cooperation and partnership are amongst the key words with which Mr Chinaglia plans and shows the necessary changes to reach final success.

Business development can be carried on through two parallel though different train tracks. In the first case we need to potentiate the reference markets through actions that are aiming at acquiring new targets of consumers and /or clients, modify the distribution methods or the present resources. In the second case, we have to work on the development of new and unexplored markets with actions that are determined by the analysis of the territory and the competitors, of demand and offer. According to Mr Chinaglia, when we talk about growth we need to enlarge the horizon of our own vision, because there are strategies that, if well inserted in the analyzed context, bring positive consequences on more front’s : optimize supply chain can generate an enlargement of the market of unexplored countries, a business partnership is the key through which many scenarios can open up in new nuances and infinite growth opportunities.

Amongst the many experiences of Mr Chinaglia that we can quote, we can remember the one in Linde where business development has brought an increase of 100% in revenues in three years, moving from a negative EBITDA to a positive one. In LHTD Mr Chinaglia has also modified the organization by creating a new sales model made of nine independent geographical areas, in which sales and aftersales cooperated in a very tight way, having the same regional responsibilities. At the same time we cannot forget the success that OM had in Italy where Mr Chinaglia has translated negative results into positive (from -14 Mio euros to +7 Mio euro in EBITDA in five years).Turnover doubled and production costs have reduced dramatically thanks to a strategic choice of partnership with China.

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Service Methodology

Every project must start with the will to listen and understand deeply the Company vision, its dream, without preconceptions and constraints. Once aspirations and intents are clear, we can proceed with the analysis on the existent, taking a snap shot of the detailed of processes, relations, successes, difficulties, markets and competition. Starting from here, we can imagine all possible scenarios fit to reach the level of growth we want. The solid experience matured in years and the constant updating with respect to markets and their peculiar characteristics guarantee the creation of concrete and applicable solutions, based on real needs, on the readiness to invest and the necessity of a return of investment. Given my complete skills and brilliant business acumen I am able to objectively understand and interpret complex situations and produce a strategy compatible with the objective and in line with the ideas of the Company.

The methodology of my service is bases on partnership with the Company and its Board of Directors. If we identify together the key profiles of the changing process, normally amongst the first line managers, we can proceed without generating tensions, actually creating a fertile under layer that can allow us to reach a spontaneous and sincere engagement from Human Resources. The Growth Team will support me during the preliminaries and will guarantee to the growth project a total adherence to the Company values and the maintenance of the untouchable pillars representing the name and its brands. Reaching the objectives will be ensured by a detailed monthly planning that will clearly define all steps, their impact and the expected results in the medium and long term, the inter-functional correlations and the repercussions at the level of image, reputation and revenues. In case of structural reorganizations, I design with the Company their new dimension and the new scenarios, I support the Human Resources function in the unpleasant task of getting rid of unnecessary staff/personnel.

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Service Options

Companies can elect whether they just require Appleton Greene for advice and support with the Bronze Client Service, for research and performance analysis with the Silver Client Service, for facilitating departmental workshops with the Gold Client Service, or for complete process planning, development, implementation, management and review, with the Platinum Client Service. Ultimately, there is a service to suit every situation and every budget and clients can elect to either upgrade or downgrade from one service to another as and when required, providing complete flexibility in order to ensure that the right level of support is available over a sustainable period of time, enabling the organization to compensate for any prescriptive or emergent changes relating to: Customer Service; E-business; Finance; Globalization; Human Resources; Information Technology; Legal; Management; Marketing; or Production.

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Service Mission

I aim to transfer all my knowledge to the Company, through an accurate and detailed analysis of their aspirations, objective, needs, priorities and aiming at welding a partnership based on transparency and condivision, I can imagine growth path’s characterized by a courageous will that doubts and changes existing processes to adopt innovative solutions, adapted to answer to the changing needs of complex situations in a transaction phase and in structured international environments. Considering that every big change in life takes place through people’s engagement and commitment, I drive growth thanks to the commitment of HR in the process of evolution that can affect various departments.

I operate in respect to the values of the Company and strive to emphasize the areas of strength and work only on dysfunctional factors, that guarantees a continuity in business and the sustainability of any project. What I guarantee to the Company is the certainty to be able to go on autonomously, with knowledge of the processes and the competences towards the medium and long term objectives, reinforced by a slim and dynamic structure. Hitting with passion and determination the common objective, I work side by side the change promoters by sustaining and spurring them until we can reach not only a business success but also an increase in motivation and dedication, unique indicators of personal affirmation and efficient and effective cooperation between teams.

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Service objectives

The following list represents the Key Service Objectives (KSO) for the Appleton Greene Transitional Growth service.

1. Change Management
   In order to grow we must change, change in a moment of big ferment, like in this particular historical and economical time is a must. For many years a Darwin thought has been a big part of my philosophy of life and business: it is not the strongest species to survive, but the one that is the most adaptable. Too rigid structures, sales model unfit for new markets, slow response, excessive procurement and distribution costs that do not permit to survive in a complex, ever changing and constantly in transition context. A structural, distributing or organizational change has to bring the Company to a more flexible and elastic in front of the demands of the market that are always different and modified by the quickest impulses of this liquid society. For this reason I take the Company by the hand through a revision that can have a perimeter as large as the need of this change. An offer that does not match the markets fuels a challenge made of innovation, inventions and rejuvenation. The excessive slowness in responding will determine the need of questioning and restructure the whole chain of procurement, production and distribution. It will touch eventually also marketing and sales, will face global themes and will give substantial answers based on innovation, the replicas of winning models and the adoption of new instruments. The need to cover always bigger areas without going bankrupt because of unbearable costs will determine other changes: distribution model, local partnership, roles empowerment and people‘s growth in the fields. These are only examples of possible changes, born out of the spur towards modern formulas, evolve the Company vision and live thanks to the realization of structured strategic plans well defined in time; they involve people, recognizing them a determinant role for the success of the plan, conquer step by step relevant target, spread motivation and enthusiasm. Change to grow means to add up, never to take away. There are six sequential passages with which I take Companies out of their dysfunctional comfort zone towards a new zone of profitable and safe action: Change definition, Scenario planning, Organizational structure, Employee involvement, Change deployment & review.
2. Business Development
   To grow in constantly changing and complex environments cannot just be considered pure destiny. The factors to keep in mind are various and difficult to understand and separate. Only an international experience and an operational exposure in multinational Companies allows you to have a strategy that can became a winning tactics in the field. Starting from a matrix analysis of the present situation, I develop a tight cooperation with the Company aiming at to analyse all the possible scenarios. The strategic approach varies according to whether we need to develop a business in a geographic area where we are already present or we have to start afresh. If already present, the analysis weigh the penetration level, the quality of the territory coverage, the type of present model and correlated aspects whether successful or not. If we have to face the development of unknown geographies, the market will be the first source of information, then the analysis of competition and demand, the definition of Value proposition and the drafting of the business plan. The type of channel to use (direct or indirect) will be one of the difficult questions to be answered, pros and cons for each one, depending on each case; we need to take into consideration also a third channel, the Key Account one. One of the fundamental discriminant factor to take into consideration is to see whether we refer to new products and / or existing ones.
3. Mergers & Acquisition
   Sometimes growth goes through strategic mergers and / or acquisitions that can send the Company shares to the moon or directly to hell. So to handle with care, we have learned to be extremely conscious with these kinds of operations because giants like HP and Compaq can make a major mistake and create a disaster. The creation of an Acquisition/Merge Team is one of the most delicate choices and is at the beginning of the whole process. It is a group of people chosen on the bases of how much they are able to support me by giving me precious internal information that I need to lead the Due Diligence Team. At first I need representative of every function so that together we will be able to analyse the general picture and the details that follow. Then having made all the due considerations on the bases of the Due Diligence, we will write a programme regarding either the merger or the acquisition process and we start the first internal communication campaign, aiming at realigning and programs. The first actions will have as a focus the internal climate of the Company, in particular the acquired company where the change process must be supported by actions, the objective of which is to consolidate the cooperation between the companies, pick up the contact points and facilitate the creation of a network that will function also from an interpersonal relations point of view. Supported by a favourite climate, the program towards the outside and the markets can start, following a roll out based on the capacity of a precise internal reply, the accessibility of resources and the return on the investment. In any operation of merger and acquisition my objective has been that of generating positive environments where the subject “us” is pivoting in the creation of a new reality.
4. Re-engineering
   Many are the reasons for which a Company may have the need of start a process of re-engineering, whether it comes from a request liked to the financial or fiscal asset or whether it is a case of merger and acquisition, or there is an ongoing process of structural change or the starting of new procedures. In any of these cases the approach that we have to follow is strongly objective, extremely practical and destined to re-start to inject vital energies in the Company. Very often the complexity of contex and the uncertainty of the scenarios impose to the Company structure to transform and to adapt. The perimeter of impact of a re-engineering process varies accordingly to the need that we have to satisfy: it could touch only a part or extend to the whole. Firstly I decide to coordinate a detailed analysis of any department and/or function, inter-functionality, efficient barriers and points of discontinuity, pointing out repeated processes, expandable roles and reduce able ones. The answers we obtain from this analysis must be harmonized, verified critically in a way that enables us to see the bud of the rebirth, in the respect of the potentiality of the resources, giving importance to the centers of excellence and the talents of the individuals. The conclusions that we draw must have an absolute pertinence with the values and mission of the Company, nevertheless ensuring the reaching of the separate targets of growth. The re-engineering proposition will be analysed in partnership with the Management and the Trade Unions or the BOD. The planning of the roll out and the training will be carried out with the support of the HR Department, and joints will be constantly monitored and revised till a complete re-start towards a maximum production capacity.
5. Start-ups
   The start-up of a new business cannot be left to Fate, we cannot hope that having a good product or a great motivation success will be assured. The new companies have to face every decision being aware of the real opportunities and the present risks. In fact any start up represents a certain margin of risk, thus it is wise to evaluate attentively the dander factors and the real success probabilities. The risk analysis and the relation between cost and benefits, require serious technical and operative instruments. Planning and programming are the first two indispensable factors, while the tool is that of the Business Plan. A business Plan embeds a fundamental role in the life of the Company. This document summarizes, describes and justifies the strategies set up for the growth of the Company and defines its modality of realization. The document of economic programming aims at: informing in a transparent and clear way, orientating the Management choices, foreseeing the future development of the entrepreneurial project, evaluating carefully the risk factors. A Company is successful only if its founders have studied carefully the market, evaluated the competition, conducted a detailed analysis and planned with care the different phases of the launch and put in place of the project, calculating the necessary resources and possible profits. A Business Plan must also emphasize Key Resources and Value Propositions, indispensable for information and for the project well-being. It is fundamental to recognize the key resources so that we can protect them, evaluate them well and reduce the risk of losing them. To clarify the Value Proposition is also important to face the market at any time. Together with this, the magical ingredients for a successful star up are the presence of a strong leadership recognized by the team, a concentration of competences in that particular sector, high elasticity e lateral thinking, and last but not least, the ability of solving problems, mediate conflicts and renegotiate objectives.

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Achievements

Ikea SpA

Responsible for back office operational services. Monthly reporting, budgeting and controlling of IT, Logistics, Procurement, HR, Management Service Contracts, 3rd Party Consultants i.e. Insurance. HR management including recruitment, retention and dismissal, plus Trade Union negotiation. Cost Budget $US 100 m. Direct reports 15. In Ikea start-up of HQ and first 4 stores in Italy: implementation of the correct processes and overhead costs down from 19% to 8%.

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Olivetti SpA

P&L responsibility for the Office Automation Business in the EMEA region (7 subsidiaries) including IDS and OEM’s (International Direct Sales & Original Equipment Maker). Co-ordination and management of all Marketing & Sales activities within the division. Division reorganization from loss making (losing €10m) to profitability. Improved business performance through sales expansion and cost cutting. Turnover €300 m, FTE’s 300, Direct reports 10. Within 12 months was promoted from General Manager for Direct International Sales to Vice President of Sales and EMEA Director. In Olivetti he restored business profitability in 2 years; merged different country markets; opened new subsidiaries in emerging markets and closing some in WE and implementation of a strict cost cutting program in the Division.

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OM SpA

Board Chairman for the portfolio of subsidiaries representing the German, French, Spanish, English and Chinese companies. Divisional P&L responsibility, subsequently promoted to General Manager with P&L responsibility for all OM Brand. Turnover €400 m, FTE’s 1,300, Direct reports 9. OM turn over grew from 180 m to 390 m euros while EBITDA from -14m to + 7m euros: led and implemented Six Sigma to the manufacturing facilities in Italy and China; incorporated and established a China distribution system and a sales network; enhance presence and sales channels in MENA and East Europe and South America and restructured product portfolio to better match the needs of emerging market.

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LHTD Ltd

As Managing Director, responsible to carry out a business turnaround for the heavy trucks division. Cost optimization of the China operations though integration. Cost optimization of UK R & D to exploit potential in the EU & USA market. Direct reporting to the Board of Directors of the Kion Group. Turnover €200 m, FTE’s 400, Direct reports 7. LHTD UK: increased revenues from 96 to 210 million pounds and shifted EBITDA margin from negative to positive in 3 years; increased productivity from 45% to 65%; inventory optimization with WIP at – 15% and fixed costs at 5%; integration of supply chain, production and design; implementation of four different kind of Forklift trucks and expansion of the Chinese factory and APAC business.

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Salice Ltd

Established the Asian business model (legal and operational) to conduct business in Hong Kong, South East Asia, China and India focusing on the China market. Selection and screening of distribution agents. Implementation of performance targets. SAliceDirect reporting line to the owner and CEO of the business. Turnover $50, FTE’s 35, agents in 10 countries, 3 office3, own plant in China South with 100 employees. Direct reports 10. In Hong Kong start-up of an operational and commercial company: creation of the Asian sales force and opened a China-based manufacturing facility.

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More detailed achievements, references and testimonials are confidentially available to clients upon request.

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Industries

This service is primarily available to the following industry sectors:

Automotive

The industry is more than 100 years old. It started in Germany and France, and came of age in the U.S. in the era of mass production. Vehicle volumes, efficiency, safety, features and choice have grown steadily throughout the industry’s history. It is so synonymous with 20th century industrial development, and so intertwined with its twin marvels, mass production and mass consumption, that it has been called the “industry of industries.” The automotive industry is a major industrial and economic force worldwide. It makes 60 million cars and trucks a year, and they are responsible for almost half the world’s consumption of oil. The industry employs 4 million people directly, and many more indirectly. Despite the fact that many large companies have problems with overcapacity and low profitability, the automotive industry retains very strong influence and importance. The industry also provides well-paying jobs with good benefits, has heavy linkages with supplier industries (which gives it an oversized role in economic development), and has a strong political influence.

All is not well in the automotive world. Worldwide, average margins have fallen from 20% in the 1920s to 5% now, with many companies losing money. This poor profitability performance is reflected in the industry’s market capitalization: despite its huge revenues and employment, the automotive industry accounts for only 1.6% of the stock market in Europe, and 0.6% in the U.S. There is a big contrast between the industry’s lackluster financial success and its oversized social role, share of employment and political influence. The overall performance of the industry can be traced to overcapacity and mature markets in developed countries. In the U.S., Europe and Japan, which account for 80% of world sales, growth has been stalling for many years. The natural response to slowing growth and increasing productivity is to reduce capacity. However, existing plants are very painful to scrap: mass production confers a strong cost advantage, which has traditionally encouraged very large and expensive plants. The result is excess capacity worldwide. Even continuing consolidation in the industry is not resulting in capacity reduction.

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Telecommunication

The world economy has experienced an enormous growth in telecommunication sector during the past 50 years. Yet the gap between the richest and the poorest countries has increased. There have been several attempts to explain the increased differences. Proponents of the endogenous growth theory claim that a technological revolution has created a new growth paradigm. Following the information technology revolution seen in the industrialised world in the 90s, information and communication technology has often been launched as a possible remedy for the slow or decelerating growth developing countries have faced. We need to explore the relationship between telecommunications development and economic growth by performing an econometrical analysis. By estimating a simultaneous equation model where telecommunication infrastructure investments are indigenised into the aggregated economy and country specific fixed effects are included, simultaneous causality and spurious correlation are recognised.

Analysis indicate that there is a significant correlation between telecommunication and GDP growth. Overall, there seems to be larger growth effects from telecommunication development in developing countries than in developed countries, a result that contradicts earlier findings and the notion of network externalities. The report suggests that the indirect effects, i.e. the gain in productivity that other sectors experience as a result of development in the telecommunication sector, are more significant in developing countries, and this might explain the large growth effects found in these countries. The demand, supply and production equations in the simultaneous equation estimation have the same tendencies throughout the analysis, with only small variations. That is comforting. I also ran the system for the early nineties and late nineties separately, and the trends were the same independent of time. Even though there are differences between the single and simultaneous equation estimations, the tendencies are the same: There are some growth effects from telecommunications, and these effects are highest in developing countries.

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Manufacturing

Manufacturing remains a critical force in both advanced and developing economies. But the sector has changed, bringing new opportunities and challenges to business leaders and policy makers. The global manufacturing sector has undergone a tumultuous decade: large developing economies leaped into the first tier of manufacturing nations, a severe recession choked off demand, and manufacturing employment fell at an accelerated rate in advanced economies. Still, manufacturing remains critically important to both the developing and the advanced world. In the former, it continues to provide a pathway from subsistence agriculture to rising incomes and living standards. In the latter, it remains a vital source of innovation and competitiveness, making outsized contributions to research and development, exports, and productivity growth. But the manufacturing sector has changed—bringing both opportunities and challenges—and neither business leaders nor policy makers can rely on old responses in the new manufacturing environment. Manufacturing’s role is changing. The way it contributes to the economy shifts as nations mature: in today’s a