Strategy interview with Steffen Bersch, CEO of SSI SCHÄFER Group
Locking up the top management team in a quiet room, developing the strategy and then imposing it was yesterday. If you want to lead a company into the future in a cooperative manner, you have to develop the strategic guidelines from within the company, involve as many people as possible and also give young talent the chance to contribute. But this also means that the management team must be able to withstand speaking "brutal" truths.
Market and competition analysis, identifying and evaluating megatrends, conducting and evaluating interviews, seeking exchange with scientific organizations - there is a lot of work behind a strategy process. So you need a whole group of people who enjoy taking on these tasks, critically examining the results and voicing their own interpretation so that they can then be transferred into the strategy.
In this strategy interview, Christian Underwood and Steffen Bersch, CEO of the SSI SCHÄFER Group, talk about how to use a cooperative leadership style and a lot of co-creation to develop a group strategy that secures the future viability of the organization, promotes innovation and exchange, and also makes a sustainable contribution to the world. Find out how all this can succeed, what role language plays and what obstacles need to be overcome in the new episode: "Hope is not a strategy."
Detailed episode description:
Company information
SSI SCHAEFER is the world's leading supplier of products and systems for internal material flow, so-called intralogistics. The family-owned company was founded in 1937, is today a true global player and is one of the hidden champions in Germany. The SSI SCHAEFER Group, headquartered in Neunkirchen, North Rhine-Westphalia, employs around 10,000 people in around 70 operating companies and at seven production sites worldwide.
Introduction Podcast to get to know Christian Underwood and Steffen Bersch
A year ago, Christian Underwood and Steffen Bersch got to know each other in Corona times and worked together virtually as part of the strategy development of the SSI SCHAEFER Group. That's why Christian is even more pleased today to talk in person about the new paths Mr. Bersch has taken at SSI SCHAEFER over the past two years, how the development and implementation of the new strategy has progressed, and what learnings there may have been over time.
CEO Steffen Bersch - Personal information
Mr. Bersch holds a degree in food technology. He has worked for the machine manufacturer GEA for 20 years in various positions. The last four years of this time he worked on the group's executive board. Furthermore, he sits on the board of trustees of the Fraunhofer Institute for Mechatronics Design Technology, as well as on several supervisory boards. For two years now, he has been responsible for the fortunes of the entire SSI SCHÄFER Group as CEO.
The role of intralogistics
Intralogistics is not a familiar term to many. They the logistical material and goods flows that take place within a company premises and ensure that goods and merchandise are provided as quickly as possible after an order has been placed. The systems from SSI SCHAEFER thus play a major role: Robots, conveyor systems and a great deal of automation ensure an efficient flow...
Increasing importance and trends
Since the beginning of the pandemic, brick-and-mortar retail has become less important due to closures. Consumers needed alternative solutions, so more goods were purchased over the Internet.
At the same time, consumers' demands and expectations have risen. Consumers do not want their orders to be delivered in two or three days, but rather the very next day. Ideally, they would like to order at 10 a.m. and the goods should arrive as early as 3 p.m. - preferably also exactly at 3 p.m. and not an hour later. Furthermore, the orders should be trackable in real time.
Although this trend was developing long before the pandemic, it was significantly accelerated by Corona. In addition to speed, individualization is also playing a greater role. Products are to be specially branded, consumers want very special services and individual solutions. A final important aspect is also the issue of sustainability. Orders should be particularly sustainable and attention should be paid to the carbon footprint. These are the main challenges SSI SCHAEFER has to deal with in this very dynamic market of intralogistics.
Co-creation in the strategy process
Steffen Bersch initiated the strategy process three months after starting at SSI SCHÄFER.
Essentially, a strategic mission statement and guard rails for the company should be defined. Managers and employees should be given the freedom to define their own tactical measures and characteristics within the defined guard rails.
So overall, the process relied on a lot of co-creation, working on the strategy with both the management team and high potentials.
Working out a strategy behind closed doors with the top management team and then announcing it is not the right approach, according to Mr. Bersch.
If you want to run a company in a collaborative way, it means that you don't impose a strategy from above, but that the strategic guidelines are developed from within the company.
The idea was not to produce a situation where something was worked out top down, given a fancy name like "Future 2040" and then announced in the company. In an exchange with the workforce and managers, an initial attempt was made to find out where problems lie in the organization, for example. In addition, young employees were given the opportunity to get involved and support the process. As many people as possible were to be integrated into the process.
What the integration actually brings
Through the involvement came some new impulses, but there was also a lot of craft that had to be done. Market analysis, competitive analysis, finding and evaluating megatrends, conducting lots of interviews, talking to scientific organizations - there were many tasks, which is why it was important to have a group of people who enjoy taking on these tasks and critically examining the results. Then we had to look at what the results meant for the business group in the first place. For example, urbanization - people are increasingly moving to big cities - also the topic of population growth: What does this mean in the end for a company like SSI SCHAEFER? Sustainability is on everyone's lips - but what does that mean for your own organization?
Corporate culture in the transition from a more directive to a more cooperative management style
Culture plays a major role in such issues. It is not always easy to verbalize and dare to say things that are not always nice to say to the big new boss or in the management round, and sometimes to let brutal truths be known. Especially not when you are trying to transition a company that has a certain history from a more directive leadership to a somewhat cooperative leadership - there is a lot to consider here in terms of corporate culture. It must first be learned that one's own opinion should now be actively expressed. Criticism can also be voiced by managers, it is even desired. A free, well-protected space must be created that then also allows this discourse.
Storytelling in the strategy process
The "excel" data was to be transformed into a story. Therefore, a storytelling expert was brought in to help describe what the starting point is, who is the villain and who is the hero in the whole story, and what a desirable future looks like.
In the end, it was not just a PowerPoint presentation that was delivered, but a coherent story in which it was formulated what the group of companies wanted to achieve, which initial situations were prevalent and which measures were introduced. Overall, this was an exciting process, because everything had to be so interesting and easy to read that it was even fun to read through 50 pages. But it creates an understanding of the context, people can categorize it and understand why a certain action is necessary. Furthermore, storytelling should simplify the communication of the strategy compared to a 300-page PowerPoint presentation.
StrategyFrame in the strategy process
After developing this story, also at the group level, it was important to bring this strategic framework and these guard rails into the world. There were already many minds involved in the process and many had contributed in different workshops.
Communicating the strategy to 10,000 employees at 70 locations is a challenge in itself. There were significant factors that influenced the success of the strategy.
First, a mission statement and the StrategyFrame with its comprehensive view and elements were developed. First of all, everyone had to be given the same basic understanding of the starting position, the target picture and the specific fields of action.
However, the StrategyFrame did not specify a single tactical measure, but simply said which strategic levers or priorities of the company measures discussed with the individual business units, the regions and the Group functions should pay off on. As a process, this was then rolled out internally so that the individual departments could develop their ideas on which strategic measures to implement under this guideline.
So it was taken to the next level, and then very specifically in the strategic framework, paying in on the objective and the KPIs, activating the whole team.
While the tactical measures were being worked out, it was also necessary to take care of the financial resources to be allocated to implement the strategy in the medium-term planning.
New strategic project work and day-to-day business
Developing new things is fun. However, you're not always in a green field when you're managing a company; there's also the day-to-day operational business. This results in a double burden. On the one hand, you are supposed to think and work on the future, but at the same time you are confronted with reality that does not correspond to the target image of tomorrow.
A learning process is taking place here. The strategic project work should not be understood selectively, but implemented as a continuous process. Day-to-day business must therefore continue, but the strategy work should exist as a continuous process. So in order to move the company forward, you have to keep at it and constantly develop individual specialist areas and topics in the project work.
Transformation and strategy development
Transformation often has negative communication elements, which also bring negative experiences. You have to go through a valley of tears. Strategy, on the other hand, tends to have a positive connotation. The contradiction of the two topics had to be dealt with at SSI SCHÄFER, which was a special starting position.
On the one hand, transforming - that means reducing costs and being more frugal, critically questioning what is actually being done and why, and what may no longer be done tomorrow or may be done differently. On the other hand, there was the strategic part - describing the future, where one wants to go with the company and which measures will lead to the goal.
Challenges of strategy development with decentralization
Following the strategy development for the Group, the next step was to develop the strategy for the functions and business areas of the countries and regions. In a large, decentralized company with many locations, this is not always easy to keep track of.
One challenge was to control in a way that allowed speed while not exploding costs.
Furthermore, all the measures developed must of course be channeled. In the end, every measure defined in the company should pay off on one of the six strategic levers. In order to achieve corporate success, an attempt has been made to define key figures and target figures for the levers.
The six strategic levers of SSI SCHÄFER
SSI SCHÄFER has defined six strategic levers.
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Employee focus: In a highly agile and technology-oriented market, in which SSI SCHÄFER finds itself, it is essential to focus on the employees. Here, many measures have been defined, which are aimed at placing them at the center of our actions.
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Profitability: A healthy profit orientation creates the basis for a company's future viability.
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Growth: There is a certain market growth of the industry and a dynamic of the competitors. This results in a certain expectation of SSI SCHÄFER's growth.
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Innovation: In a very technological and automation software-driven environment, new ideas must always be developed technologically. This can be done either through organic development within the company itself or through acquisition. This lever was also quantified accordingly.
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Customer satisfaction: If the customers are not absolutely satisfied and buy the next project as well as recommend the company, then the other goals can hardly be achieved.
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Sustainability: Many companies are working on the topic of sustainability today, especially in the SME sector. Essential questions arise: What can be changed with regard to sustainability in the company in order to get a grip on the CO2 footprint and the environmental aspect? How can we deal more sustainably with employees and stakeholders? How can you respond to the issue of sustainability within the company? How can the topic be integrated into customer projects? Is it possible to make customers more sustainable through own solutions? All elements of sustainable and ethical action were taken into account here.
With software-based controlling of strategy implementation everything at a glance
With the many measures that have emerged in the discussion with the employees, you have to ask yourself how you can keep an eye on the activities of the group of companies. SSI SCHAEFER has opted for a digital solution here. To support the process, a strategic software platform was therefore purchased, which was filled with the corresponding measures to make successes visible and measurable.
If the company is already innovative and works with drones and robots, then the strategy will not work without a software solution in the end to be able to trade the complexity.
Sustainability at SSI SCHÄFER
The topic of sustainability plays a major role, particularly in the strategic, but also in the operational area. The question of how to combine strategy and sustainability is currently occupying many entrepreneurs and managers.
At SSI SCHÄFER, sustainability has several levels. From the mission statement and vision to the strategic levers and value proposition, the topic of sustainability is firmly anchored.
Tips for strategy development by Steffen Bersch
Strategy is often not applied correctly and is confused with the development of tactical measures. Steffen Bersch's tip is to first define the mission statement and thus also the common thread that everyone can follow. In day-to-day business, many ad hoc decisions have to be made. The mission statement can then be used to determine whether a decision is in line with the strategy. Furthermore, it helps to define the direction in which the company should develop, independently of day-to-day business.
However, it will still often get muddled when there are specific situations that don't fit the strategy, but it helps to provide landmarks. Focusing on the strategic guardrails shows what will help in the long run.
But the most important thing is language. Every company is different. What helped Steffen Bersch a lot was to take the trouble to write down the strategy and formulate what you want to achieve.
Language, language, language! Clear and unambiguous language is needed to ensure clarity for all stakeholders. It doesn't help to make meaningless bullet points like "China: growth - yes". Instead, one should write: "In China, the initial situation is as follows (...) and here I have the following competitors (...)." By writing, you also get clarity yourself and it takes you a long way.
Contact:
Need help planning your strategy process? Feel free to send an email to christian@underwood.de.
Thank you for your interest and until the next episode...
...Because HOPE IS NOT A STRATEGY.
SHOWNOTES: