Since assuming the role of CEO at the Oerlikon Group in 2010, Dr. Michael Buscher has steered the company out of a deep crisis and back onto a winning track. Essential to the successful turnaround was Buscher’s ability to unite apparent opposites. The 47-year-old switches effortlessly between operations and strategy: while he thinks long-term on the one hand, on the other he acts without delay. He demands a lot from his employees, but he also supports them. He didn’t conduct the restructuring from a strategic ivory tower but in close contact with business operations. In the interview, he relates how the transition succeeded, why it’s lasted, and what still lies ahead.
Your company has been undergoing a process of fundamental change for a good two years. What exactly does this entail?
„Ultimately, it’s about a change in awareness.“
To go from an operational loss of CHF 590 million in 2009 to a 420 million gain in 2011, we had to implement rapid and rigorous far-reaching cost-reduction measures. These included downsizing, site closures and an increase in efficiency. At the same time, we’ve drafted a forward-looking three-year plan, introduced a rating system based on key performance indicators, and made efforts toward improvements in the area of culture. Ultimately, it’s about a change in awareness. It has to be clear to every employee that we want to create added value from the capital employed and achieve best-in-class market positions.
In the process, you’re having to bring about significant changes yourself: for two years, you’ve had to restructure, and now you have to grow, build and innovate.
I find these contradictions extremely exciting: on the one hand, systematically reducing costs within a brief period and, on the other, creating long-term change. It’s important to be able to combine both. I’m already looking forward to the growth and development phase that lies ahead of us, even if the restructuring isn’t yet fully completed. Our productivity and supply chain management is not yet at the world-class level in all segments. Because of that, we’re continuing to work on these issues.
That’s an unbelievable amount of simultaneous activity: development, downsizing, consolidation, new direction. Do you still have it all under control?
Internally, employees are calling the change a silent revolution, partly because the intensity of our work isn’t necessarily visible on the outside. First of all, you have to be very organized yourself and clearly communicate your expectations. Self-discipline, time management and clear priorities are all fundamental to that. This might sound trivial, but I always work with a cleanly run template so that nothing is lost. For me personally, it’s also very important that you actually finish the things you address. You can adjust the path, but when it comes to the final goal, there are no compromises.
How do you conduct a silent revolution?
Through clear objectives and binding agreements. The organization’s level of obligation has improved dramatically. For me, agreed-upon goals are like a contract. Of course, in business, marginal conditions can always change. No one can foresee how the market will behave in eight months. But you still have to actively tackle adversity as needed, and you can’t give up if you ultimately still want to reach your goals.
Sounds like a perfectly organized company, a “well-oiled” enterprise. But you also have “innovation” as one of your core values. There’s a certain contradiction in that. How do you promote innovation?
Still too little. For decades, the organization has been known for its innovative products. There were always many highly trained individuals and organizational segments that generated and promoted innovation on their own initiative. That’s why this area was not a group-level priority in recent years. In the future, I’d like to pay closer attention to ensuring even better channeling of all types of innovations and promoting them more quickly. In addition, ideas must lead to commercial successes and create added value for our customers.
In turnarounds, you often hear that you need a new team.
To a certain degree, yes. In my view, a lot resides with the leadership. The employees at the workbench are not the cause of fundamental difficulties in the company. They are indeed the key to productivity, quality and more—but when a company has a fundamental problem, it’s the leadership that’s responsible. That’s why we also need to take measures there.
The Drive Systems Segment of Oerlikon is one of two strong Oerlikon segments that occupy the highest rungs of Obermatt’s rankings. How did this success come about?
With the site closures—even in 2012—we had to implement some very tough measures. But what was pivotal was the integration of the entities GRAZIANO and FAIRFIELD begun at the end of 2010 under the direction of segment CEO Gary Lehmann. This enabled a swift improvement in our sales processes, an increase in our factory efficiency, and an expansion of our production capacity in low-wage countries, including the construction of a new factory in China. So we’ve simultaneously implemented the restructuring, integrated the two entities that for many years had been managed parallel to each other, and increased the effectiveness and efficiency of our processes. Drive Systems was one of the areas that even in 2010 still reported the lowest supplier delivery reliability with 70%. Now even the Italians are at over 98%. All of that explains Gary’s medal in the Obermatt rankings.
Under the direction of Dr. Hans Brändle, Obermatt’s second winning segment—coating—has developed into the Oerlikon Group’s most profitable segment. Does this have to do with the successful Asian expansion?
Hans and his team recognized the developments in Asia very early on, and on the basis of their leading coating technology, they were able to take advantage of the growth—for instance, of China’s automobile industry—through the continuous construction of new centers. At the same time, coating is equipped with an excellent internal benchmarking system for its 88 worldwide coating centers so that weak points can be quickly redressed and outstanding solutions supported in a targeted manner. For the future, it will be important to continue to expand our technological lead and to find new areas of application. Consequently, Balzers acquired a new coating technique in 2010 and opened two new technology centers in Germany and China for this purpose. That will soon pay off.
Dr. Buscher, where do you see yourself in 10 years?
The long-range development of a company is an exciting task. Together with my colleagues, my goal in the coming years is to steer the tradition-steeped and fascinating Oerlikon Corporation into a sustainably successful future so that our investors and customers are content and our employees can be proud to work for Oerlikon.
How do you motivate your employees to perform at their best, in the future as well?
I have a realistic idea of where we stand and what’s possible. Mostly, I add an emotional element to our goals because I’m convinced that ambitious goals can be met when everyone is on board. We have already achieved more than what many thought was possible. What I’d still like to see is greater recognition for internal successes, since I’m aware that also with successes, it’s important to take a moment to breathe deeply, enjoy them and be proud—before continuing with the work. In that way, I’ll happily use the Obermatt medal as an opportunity, because in the end, it’s a success for all Oerlikon employees.