Leadership in Challenging Times

interim management london


Bringing a business back to life – The COMPAIR Turnaround

Imagine being part of a management team trying to uphold the 200 year old reputation of a company that has gone from successful global brand to basket case. Interim manager, Graham Roberts, was hired for three months. However, three months turned into six years, by which time the business was transformed and sold for more than £200m.

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CompAir’s CEO Nick Sanders knew something drastic had to be done. So, after an MBO backed by Alchemy Partners, he hired Graham Roberts for an initial interim assignment of three months.

Graham was assigned to the Cornish subsidiary Holmans, which had lost heavily for many years. “Similar plant closures had taken place in the UK and the US to centralise the German business, so the decision to wrap up and close the business was straightforward,” Graham says. “But what wasn’t so straightforward was the myriad of interfaces and commercial deals that had to be tackled with local and national government agencies. I saw that we would have to lead with a socially responsible outcome while cleaning up any likely exit issues when the business would need to be sold.”

After the successful completion of the sale of Holman’s, Graham’s time at CompAir wasn’t over. “Nick asked me to join the board full-time and run the core portable compressor business in Germany. It was easily the largest single statutory business and the natural spider’s web from which CompAir could evolve.”

“The company then faced a crossroads,” Graham continues. “The team had to make a decision on whether or not the loss making portables business should be closed. I managed to convince the board that by concentrating on both product and customer development the losses could be eradicated. This took a year of hard commercial decision making and rapid product development across all European marketplaces, leading to more products released in two years than the previous 10 years combined.”

Following a hands-on approach to sales that Graham promoted throughout the business, large scale orders were starting to be won in Italy, Germany, Spain and the UK.

“By 2004, the portables business was trading successfully with market share in excess of 35% in most territories,” says Graham.

At that point, Nick asked Graham to once again change management hats. “Nick asked me to combine running the portables business with running the industrial division. In total, 75% of group business still emanated from Germany. The division’s strategy had already been set, but had stalled because previous management could not embrace a global culture, particularly in Germany. I then proceeded to direct a whole series of radical attitude shifts to make the organisation fast and focused.”

To change historical processes and ways of thinking Graham says a multi-functional approach had to be put in place to change the profit dynamics in four key areas:

1. Sales: we needed to provide excitement to the sales channels through a dramatic increase in new product development including new global sales promotion packages with the message “we are back.

2. Production: production costs had to be reduced quickly and permanently by value engineering and the adoption of low cost sourcing from zero to 40% in two years. Graham made regular visits to China and India to ensure that the correct partners were found and that projects were being driven quickly.

3. Aftermarket revenues: turn the dial up on aftermarket revenues by enhancing customer retention and product recapture programmes across the entire business.

4. Manufacturing: we had to concentate on customer delivery targets, not month end financial results.We set aggressive customer delivery targets to drive down order book lead times and establish Germany as a single logistics hub for Europe.

Graham says that each of the above projects was pushed forward positively and as a result the company’s revenue grew by over 30% in 2004-05 and profits grew “exponentially”. The combined business became established as the third largest entity in the global compressor marketplace and, in an external validation of all their hard work, CompAir’s management was awarded Company Turnaround of the Year in 2006.

By the time Alchemy came to sell the business, trade and institutional interest was huge. Graham says an important task for him was to continue to run the business throughout this period of intense speculation so it could be matched with the right buyer.

In October 2008, Graham’s six year stint paid off when CompAir was acquired by Gardner Denver for over £200m. A corporate life well and truly saved.


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