【新闻】Value Creation through Restructuring, Innovation and Growth

On April 24, 2016, Prof. Edward G. Krubasik visited school of management in Fudan and delivered an exellent speech “Value Creation through Restructuring, Innovation and Growth” to the student.

Prof. Edward G. Krubasik begin his topic from Creating Value in Manufacturing and Sevice Businesses through Restructuring, Innovation and Growth Programs. The concept was illustrated by lots of cases like: Integrated restructuring program for merger in market crisis, Asset Management Program to fight cash shortage, : Innovation as a lever in restructuring, Growth Programs with account teams, etc. The EVA was also a critical point to emphasize. Let us never forget: Companies are founded to serve customers, (not as employment agencies, not as playground for investors) .Main goal is to provide value to the customer. Companies need skilled employees and capital . Turning sharholder-value thinking into a more general value creation objective: A company can be profitable because it provides value to customers, enabling it to provide value to shareholders, employees, community and the global economy.

The contents followed the goals, actions, consequences section. There are three segments we can look into: Cost reduction potential identified through benchmarking.Simultaneous restructuring and growth.Catch up with competitors through waves of productivity improvement programs. Then the Prof.Speak about the : Integrated restructuring program for merger in market crisis, including Select the best team for a divisional organization, set rough targets followed by benchmarking, develop an integrated program for all divisions. Agree on yearly target matrix with equal aspiration, etc.

Management reaction to crisis was another important part of the speech. Start overall restructuring, with asset management program envolving the entire organization .Support CEO with program management office to lead the effort .Set restructuring targets to achieve profitability at 2/3 sales, if no sales recovery more restructuring .Start massive cash management program with targets for divisions and functions.Mobilize all assset management levers. Use Degree of Implementation method used to track progress. Restructuring and Growth Program. Then we use the Economic Value Added driver tree. The asset performance is driven by three main processes.

Innovation is the topic that most student are interested in. Innovation creates value via growth, cost reduction, asset reduction. Innovation is core of successful turn-arounds. Typical innovation in turn-around for electronic systems. Creating Value through Innovation.Growth lessons on Innovation Lead customer input: A customer challenging R&D helps (German industrial model). Learn from solution providers Regulation: Competition stimulates innovation.Earn your right to grow: Profitable growth is required. Cover the low-end, innovate in NICs.Stay-ahead of low-cost competitors by solutions, service, customer orientation.

Last topic is about service. Services will increase in industrialized economies. Services are replacing industry as the largest economic sector. Service sector already dominates the employment market, Service sector is largest in USA, followed in Europe by France and UK. EU countries lost out to the US in productivity growth and job creation. Trend towards solution and life-cycle-oriented services. IT services provide highest value-creation potential. Service is people business, productivity programs need organization-wide involvement.

At the end part of the speech, many questions were raised from the students about the Chinese economy and Innovation situation in China. Prof. Edward G. Krubasik answered all the questions with great insights. All the students were satisfied with this exellent speech and were expecting to attending Professor’s lecture next time.

The professor also expressed the wish to visit school of management in near future and looking forward to have further communication with our students!

Fudan MBA Forum

Fudan MBA Program

Apr 25, 2016