Thursday 2023-11-23

Bosch, Siemens, thyssenkrupp – many companies are currently decentralizing their organizational structure. The basic idea is to be even closer to the markets, be faster, and more flexible. One step along the way: more autonomy and responsibility for the operating units in a globally active company. HELLA also initiated this process several years ago: Some departments were partly transferred to the Business Groups in 2018 and the Global Business Services organization was launched in 2019. To complete this process, this year a project has been initiated with the help of management consultants from Roland Berger. In an interview, we talk to Bernard Schäferbarthold, sponsor of this project on the HELLA Management Board, about the objectives, the procedure, and the current status.

Mr Schäferbarthold, as part of a decentralization project, we are currently looking at how the organizational structure of our Corporate Functions can be further improved. Why has this project been launched? Aren't we already decentralized?

Bernard Schäferbarthold: Absolutely. We have taken a significant step towards decentralization in recent years. However, the world has changed radically for us in just a few years – both externally and internally. The global political environment is becoming more unstable, markets are being challenged by recessions and the automotive market in particular is changing as fast as never before. Whether it is new players entering the market as part of the trend towards electromobility and autonomous driving or Chinese OEMs, they are all demanding more speed and a stronger focus on local markets. We have to adapt to these changing market conditions in order to continue our growth trajectory: We need to become even more agile and flexible. At the same time, a lot has changed internally as a result of the merger with Faurecia. However, it is important for me to emphasize: There is no right or wrong here. There are many reasons for decentralization, but it can also be right for a company to continue to manage many things centrally. We have decided for ourselves, like many other companies, that we want to further strengthen our Business Groups and Regions. The success of the path we have taken so far proves us right.

The nine-month figures that have just been published have indeed shown that we are doing better than other companies in terms of turnover and profitability despite the volatile business environment. Why do you see the need to make further adjustments?

Bernard Schäferbarthold: So far, we have decentralized more in some areas and less in others. We are convinced that we still have potential to position ourselves better in some areas. The project will now identify these specific areas and what an optimal organizational structure might look like for each individual corporate function. Of course, we are proceeding with an open mind: It is therefore possible that a functional area is already ideally positioned.

Concretely: How do you do this?

Bernard Schäferbarthold: We analyze together with each individual department: Which tasks are carried out by this department for which target groups with which resources. We also check whether some tasks could perhaps be handled more effectively and efficiently by another department. In several workshops, we take a close look at which teams exist, how they work together, and develop a possible target image. The results are discussed and decided upon by the HELLA management board. The next step is to prepare for implementation, e.g. the adjustment of cost centers and structures in organizational management. Of course, we involve the relevant representatives from Controlling and HR here.

When you talk about an optimal organizational structure. Is there a target image that we want to achieve?

Bernard Schäferbarthold: Of course. Where we want to go, where we see the optimal set-up for the future is an organization consisting of four pillars: Firstly, we want to have strengthened, very autonomously operating Business Groups that pursue their strategy independently, but do so within a number of important corporate guidelines, such as compliance, to name just one example. They are responsible for their product portfolio and are the central interface to the customer. Secondly, we want to focus the Corporate Functions on a core that has the task of developing and implementing company-wide strategies and guidelines. Thirdly, to ensure that we have taken sufficient account of country or market specifics, we want to set up specialized country or regional organizations. These have the clear task of adapting the company-wide strategies and guidelines to local needs and requirements and then ensuring compliance within the region – across all Business Groups. To enable us to implement all of this with our existing resources, we want to significantly upgrade Global Business Services, the fourth pillar. In future, they will also take over expert tasks from the corporate functions, but also bundle and standardize overarching global administrative tasks as usual and, wherever possible, streamline and consistently digitalize processes. To this end, we will set up a Global Business Service Hub at other locations, for example here at the headquarters in Lippstadt.

That sounds like a lot more departments than before. Won't that make the organization even more bloated?

Bernard Schäferbarthold: I would say the opposite is the case. We will implement the new target image with the existing workforce. The employees of the Corporate Functions will therefore be working in one of the four pillars. In this respect, we are by no means inflating our organization. Rather, we will be able to further accelerate our processes, primarily thanks to the commitment of Global Business Services, and integrate regional characteristics much better thanks to the regional and country organizations.

When will this new organizational structure come into effect?

Bernard Schäferbarthold: Many corporate functions will start using the structure that was developed together with the respective departments as part of the project as early as January 1, 2024. Smaller departments will then follow in the course of the first quarter of 2024. One thing is very important to me personally: we still need every individual. Everyone will have a relevant role in one of the four pillars mentioned. The decentralization project is not aimed at reducing staff in the corporate functions. Instead, we are taking a big step towards greater agility and more flexibility. But that will not be enough.

What further steps will follow?

Bernard Schäferbarthold: We must continue to work on significantly streamlining, simplifying, and accelerating our processes overall. It will therefore be an important task for Global Business Services, but also for each individual area, to tackle the processes, automate them even more, and use digital tools. We need to reduce complexity overall.

Who can employees ask if they have questions?

Bernard Schäferbarthold: First and foremost, of course, they can ask their superior. For project-specific questions employees can also turn to the two project managers Nicole Castagné and Jan Hellmich.

Mr. Schäferbarthold, thank you very much for the interview!