A leading Northern European FMCG business was transforming into an industrial investment company to enhance long-term value creation, increase agility and better leverage its expertise in consumer-oriented businesses. With the group focusing on investments and managing the portfolio, independent operating company leaders were to pick up previously centrally managed functions. The board recognised that reputation considerations needed to be built into the new strategy and governance structure.
Having previously conducted working sessions with the board, one-to-one sessions with executive management and delivered leadership training programmes on corporate reputation, we had established a firm recognition of the importance of carefully considering reputation in strategic decisions. This enabled the establishment of a temporary Sounding Board, a special working group consisting of three EVPs and two VPs. Convening twice monthly during the strategy development and restructuring period, its sole mandate was to build reputational considerations into the new strategy and structure.
With our counsel and in-depth analysis we worked with the Sounding Board to fine-tune the new corporate strategy and establish a new governance framework for post-transformation responsibilities and practices for reputation at head office and portfolio company level.
Whilst focusing on a narrower stakeholder landscape, at head office in the new set up (such as financial audiences, future acquisition targets and business leaders), the commitment to long-term, group-wide consistent reputation management paid off in the first financial year following the transformation contributing to an adjusted EBIT increase of 17% and a 45% year-on-year profit increase.
EBIT increase
year-on-year profit increase