Xella is a building materials manufacturer that was created out of the merger of three German companies in 2003, and now has manufacturing operations in 18 countries and sales and marketing ones in over 30 countries worldwide across its family of brands. Its 2012 turnover was 1.3 billion euros ($1.6bn).
The company was formed following the merger of three established, family-run companies in 2003 and was subsequently bought out by two private equity businesses in 2008, Pai Partners and Goldman Sachs Capital. As with many businesses in similar circumstances the focus had been very much on market expansion and revenue growth during this period of merger and acquisition and as often occurs in such times less emphasis was placed on developing leadership skills and building managers’ strategic thinking competencies in fully structured way especially amongst the senior and high-potential talent groups.
In late 2011 and early 2012 the company recruited Christiane Schlüter and Andy Donaubauer to spearhead a new effort in developing the leadership capabilities in the company. Dr Schlüter had worked previously for Haniel, one of the former holding companies for Xella, and had set-up leadership programs there but was new to Xella itself.
Together Schlüter and Donaubauer identified three levels of program to be implemented across the organization: a Potential Leaders Program (PLP); an Advanced Leaders Program (ALP); and a Strategic Leaders Program (SLP). For the ALP the new team focused on partnering with a leading European business school and quickly selected the Executive Business School at St Gallen as academic partner. “Doctors Guthof and Frank (the St Gallen leads) just ‘got it’, there was a good connection immediately” says Schlüter “we engaged them in early new year 2012 and they reacted very quickly, were very customer-oriented and helped a lot in diagnosing the issues. The school’s experience in linking scientifically validated concepts with practical application was very attractive.”
The ALP design was for talented managers from across the group to prepare them to assume greater responsibility within the company. The key focuses of the program were to help managers perform better in a fast-moving and challenging business environment giving the chance to not only develop improved finance, strategy and leadership skills but also apply those directly to Xella’s specific challenges through action-oriented projects.
The participants for the program were nominated from their local business units and then attended a final assessment day at the Duisburg HQ to approve them.
The program was launched virtually in April 2012 and had three modules in May, September and February, concluding with a final two-day closing session in April 2013. Each of the modules focused respectively on Strategy, Leadership, and Finance. In line with best practice for such custom programs, throughout the 12-months the program was supported by a virtual learning platform and participants had a buddy-system to support group-wide collaboration and networking. The participants also were able to choose one of six projects they would work on and through which they could apply and embed their learning.
The formal modules were led by the expert St Gallen faculty. Amongst these Prof Günter Müller-Stewens, who was perfectly matched for the program, being professor of strategic management with a research focus on corporate strategy, M&A, and the strategy process; and Prof Heike Bruch, Director of the school’s Institute for Leadership and Human Resource Management. The school’s involvement was managed by Dr Philipp Guthof, a former CEO and consultant, Guthof’s extensive experience tied the academic and corporate elements together.
Beyond the formal learning two key parts of the program, that are increasingly seen in custom programs to support participant learning journeys, were the buddy system and the projects. Schlüter set the parameters, that buddies had to be selected outside of their current areas – this was to encourage greater networking and cross-silo interaction. The participants were then free to select their partners. “The self-selecting mechanism worked well” Donaubauer observes “the participants appreciated the opportunity to do it. The pairings remained in place through all the modules. Clearly some were stronger than others, but the knowledge exchange, networking and support benefits has been clear to see. This was particularly important in the leadership module where they were required to reflect on their personal style and challenges and so the pairings played a very important and supportive part in these discussions. The opportunity to share ideas and concerns with someone who is knowledgeable about the culture and challenges of the organization but is ‘neutral’ in terms of not being involved with your own line of business is very powerful. Some pairings have continued with regular calls even after the program has formally ended.”
Christiane Schlüter explains also that they are now looking to create a development centre in the company which will be able to conduct psychometric assessments which will give them better information on their profiles and really focus on their strengths and weaknesses. Moreover this will enable HR to tailor the program more closely to individuals development needs and also on how they might best allocate pairings in the future.
One of the big tangible take-aways from the program was the six projects. There is often a tension between focusing on the leadership development benefits and the commercial benefits in running projects, but Schlüter and Donaubauer managed to keep a clear distinction between the learning and project modules. “The bigger challenge was to find the right projects, and the right people to sponsor them. It is key to manage expectations regarding the outcomes as well” they explain. “The project ideas were generated in collaboration with Xella CEO Jan Buck-Emden and Group HR Director Harry Hoffmann, drawing on existing challenges or initiatives in the company, and modified with input from Philipp Guthof from St Gallen. The CEO buy-in was very helpful to open doors to senior management as sponsors for the various program projects” Schlüter notes.
Having selected the project topics it was important to get the right senior management sponsors for them too, who would be approachable and give time to working with the participants. Donaubauer notes that all achieved good results but those with supportive sponsors who afforded them space and time and feedback were able to create significant impact for the organization.
The participants got the chance to present the results of their project work to the CEO, CFO, CTO and COO in the final session in April 2013. The subsequent discussions with the C-level executives and the project sponsors how to proceed with the approaches and solutions suggested for the existing challenges were very productive and gave great momentum for further action in the near future.
The company will run a further, but smaller, cohort through the ALP this year too. “The pool of talent to draw from is clearly smaller than it was last year, before we had the 40-person program, and the backlog of talent reduced” explains Schlüter, who is obviously pleased with the program’s success and impact. Dr Markus Frank from St Gallen also is very positive about the program “we see a huge demand for this kind of development program, it needs to be structured and implemented very well. The Xella program was just what the company needed, it was very solid, very professional and very well done. While it was not necessarily ground-breaking in terms of technique or content, nor was it over-engineered, the company wove all the elements together extremely well and created high impact in terms of the organizational needs. Getting buy-in from the board is always key and marrying the learning objectives with successful projects is no easy task and Xella achieved both.”
|The Six Projects: The projects were selected from existing initiatives by the Xella CEO and program team, with the learning objectives elements guided by the St Gallen team.
Groupwide Leadership Guidelines: to define the process to generate guidelines and how to set-up the roll-out. Sponsor: Group HRD.
Ecoloop: to define the optimal supply chain for planning and building plant. Sponsor: CEO Ecoloop.
Digital Strategy: to optimise the strategy and secure the company image and improve customer communication. Sponsor: Head of International Marketing.
Employer Branding Strategy: to further develop a strategy and improve its ROI. Sponsor: Recruitment and HR-marketing manager.
Cooperation Partnerships: to analyse and develop different partnership and cooperation models opportunities and develop recommendations. Sponsors: MD Ytong Bausatzhaus and Senior Manager Corporate Development.
Innovation Culture: to foster a more impactful group wide innovation culture. Sponsor: Head of Communications & Innovation Management