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Season’s greetings and a year in review by Luca Gazocchi, president of BKey Consulting
2018 is coming to a close, and as always, we take this opportunity to look back on this year’s endeavors, and take stock of our client’s performance.
In 2018 the economic scene was characterized by a return of optimism both to the economy and our clients, and with it the desire to invest in the future.
It is in the financial sector that we find the greatest acts of courage of the past few years, particularly with regards to the world of Private Equity, which nowadays represents a vast range of expertise and a strong aptitude for investment.
The old mantra of three-year-planning, of high operating leverage and uncontrolled build up, often undertaken in the absence of a strategic plan, is now a thing of the past: the 2009 financial crisis marked the death-toll of this bad habit.
For our part, we have reaped the benefits of successful turnarounds supported by strong industrial plans. The year’s most emblematic success is without a doubt Dulevo International, a Parma-based company that went from a situation of financial distress to becoming one of the most successful businesses in the street-sweeper market, both in terms of EBITDA and growth-rate. Indeed, the company continues to prove it has ample room for growth within its sector. Dulevo’s revenue went up from 45 Mil in 2012 to 80 Mil this year, doubling its EBITDA over net revenue.
What is the secret behind this breakthrough success?
1. The management’s active participation, and dare I say “entrepreneurial” spirit, in mapping the company’s reboot project.
2. A first-rate industrial plan that helped the company transition from an artisanal (island) production model to applying Lean manufacturing to the physical production cycle. This change resulted in a significant increase in production, and a decrease in inventory with the application of the Just in Time supply-chain for 70% of product components.
3. A new way of approaching the market, with a strategic approach that involves focusing on the highest potential markets and offering customization in order to more fully satisfy their needs.
4. A rethinking of the sales network in order to fulfill the goals for market penetration established in the company’s strategic plan.
5. A focus on Product Development, proof that the results of today are only made possible by planning for tomorrow.
6. The mindful use of high-level consultants, who bring to the table an advanced industry culture and the ability to shorten change-management timelines. Their primary task is to instill the necessary skills and expertise into the very fabric of the company culture, so as to ensure that the business does not have to rely on them in the long-term. Instead, the company’s management will learn to embrace the principles they set forth, and develop them independently.
As a troubadour from yesteryear might say, the moral of the story is that to obtain meaningful results you must plan out your project, not be afraid to enlist the help of high-level professionals and forget the fairytale ending of quick wins, which either don’t exist, or are a matter of sheer luck.
Even short-term success is elusive in the absence of a long-term plan. This is most likely the biggest problem facing Italian Small and Medium Enterprises, which continue to act incredulous when faced with long-term projects. These businesses typically prefer to rely entirely on (often low-level) in-house management, and consider their competitors and competition as coming exclusively from their immediate vicinity.
Herein lies the one pitfall of BKey Consulting’s 2018: our inability to penetrate the Italian small business market. It is much easier for us to position ourselves within private Equities or larger businesses that already feature a structured organizational model. This is unfortunate, as it represents a missed opportunity for our business as well as that of our potential partners.
Courage usually requires both foresight and ideas, and this was definitely the case for Bonifiche Ferraresi, with whom we engineered a vastly ambitious and important project. The group’s CEO, Mr. Vecchioni, had a dream of transforming the largest farming business in Italy into an integrated group which could grow, process and industrialize the products it farmed, setting its own brand directly on dinner tables all over Italy.
“Le Stagioni d’Italia” is a product of this dream, and is now sold on the large scale retail market with products that vary from whole-wheat pasta to rice, tea and legumes, and which will in time include many other product categories.
We are very thankful to Mr. Vecchioni for having allowed us to contribute our experience to this project. We are also proud that the client asked us to integrate one of our senior partners, Antonio Posa, directly into its organizational structure in a pivotal role, and we wish him the best of luck in this endeavor, confident that he will lead the project to the success it deserves.
And here I would like to return to the lesson we learned: never start with a muddled idea. It is necessary to start with a plan, and not just the need to fill a temporary organizational void with a Temporary Manager. While we are happy to act as Temporary Managers for our clients, we prefer to begin our work with an industrial plan, or a specific project roadmap. We start by setting the groundwork, defining our priorities and objectives, and only then developing them in partnership with our clients. These are just two of many stories.
The rest I will hold on to for another occasion.
And now a few thoughts on our organization. BKey Consulting continues to develop along the same path that has enabled us to stay relevant in the market for the past 10 years. This year we welcomed into the BKey family two new and distinguished members, Francesco Marchese and Gianfranco Baldin. Marchese comes from a long and distinguished career in Italian and Multinational groups such as Barilla, Colgate, LG, and more recently Vorwerk as General Manager of the Bimby division. Baldin comes from a financial background with important and successful experiences in finance management roles Safilo, Maserati and Gruppo FCA.
It is always the same principle: with a common vision and who are characterized by a common way of viewing their profession, having often shared work experiences in managerial roles with the goal of creating a distinctive approach and management style, our style.
So, what should we expect from 2019? First of all we hope for stability, and that our governing body can manage to pursue it with determination. We must avoid the throes of recession at all costs. Our country is like a child just learning to walk, if we pull the rug out from under him, he is sure to fall and get hurt. Let’s smooth the path ahead and focus on the concrete actions that we can take while looking towards the future. By working for tomorrow, we have a chance of producing results today, but the reverse is not always true.
This is the time for brave visionaries who are prepared to lay the groundwork for the future, not for opportunists. As Pietro Barilla, an entrepreneur I once had the fortune to work for many years ago, once said: “We bravely go forth”. This phrase continues to ring true, and it contains two very essential components: progress and courage.
And with this, hoping that I have not bored you too much, I wish you all a very Merry Christmas and a 2019 filled with dreams of success. Go Back
In 2018 the economic scene was characterized by a return of optimism both to the economy and our clients, and with it the desire to invest in the future.
It is in the financial sector that we find the greatest acts of courage of the past few years, particularly with regards to the world of Private Equity, which nowadays represents a vast range of expertise and a strong aptitude for investment.
The old mantra of three-year-planning, of high operating leverage and uncontrolled build up, often undertaken in the absence of a strategic plan, is now a thing of the past: the 2009 financial crisis marked the death-toll of this bad habit.
For our part, we have reaped the benefits of successful turnarounds supported by strong industrial plans. The year’s most emblematic success is without a doubt Dulevo International, a Parma-based company that went from a situation of financial distress to becoming one of the most successful businesses in the street-sweeper market, both in terms of EBITDA and growth-rate. Indeed, the company continues to prove it has ample room for growth within its sector. Dulevo’s revenue went up from 45 Mil in 2012 to 80 Mil this year, doubling its EBITDA over net revenue.
What is the secret behind this breakthrough success?
1. The management’s active participation, and dare I say “entrepreneurial” spirit, in mapping the company’s reboot project.
2. A first-rate industrial plan that helped the company transition from an artisanal (island) production model to applying Lean manufacturing to the physical production cycle. This change resulted in a significant increase in production, and a decrease in inventory with the application of the Just in Time supply-chain for 70% of product components.
3. A new way of approaching the market, with a strategic approach that involves focusing on the highest potential markets and offering customization in order to more fully satisfy their needs.
4. A rethinking of the sales network in order to fulfill the goals for market penetration established in the company’s strategic plan.
5. A focus on Product Development, proof that the results of today are only made possible by planning for tomorrow.
6. The mindful use of high-level consultants, who bring to the table an advanced industry culture and the ability to shorten change-management timelines. Their primary task is to instill the necessary skills and expertise into the very fabric of the company culture, so as to ensure that the business does not have to rely on them in the long-term. Instead, the company’s management will learn to embrace the principles they set forth, and develop them independently.
As a troubadour from yesteryear might say, the moral of the story is that to obtain meaningful results you must plan out your project, not be afraid to enlist the help of high-level professionals and forget the fairytale ending of quick wins, which either don’t exist, or are a matter of sheer luck.
Even short-term success is elusive in the absence of a long-term plan. This is most likely the biggest problem facing Italian Small and Medium Enterprises, which continue to act incredulous when faced with long-term projects. These businesses typically prefer to rely entirely on (often low-level) in-house management, and consider their competitors and competition as coming exclusively from their immediate vicinity.
Herein lies the one pitfall of BKey Consulting’s 2018: our inability to penetrate the Italian small business market. It is much easier for us to position ourselves within private Equities or larger businesses that already feature a structured organizational model. This is unfortunate, as it represents a missed opportunity for our business as well as that of our potential partners.
Courage usually requires both foresight and ideas, and this was definitely the case for Bonifiche Ferraresi, with whom we engineered a vastly ambitious and important project. The group’s CEO, Mr. Vecchioni, had a dream of transforming the largest farming business in Italy into an integrated group which could grow, process and industrialize the products it farmed, setting its own brand directly on dinner tables all over Italy.
“Le Stagioni d’Italia” is a product of this dream, and is now sold on the large scale retail market with products that vary from whole-wheat pasta to rice, tea and legumes, and which will in time include many other product categories.
We are very thankful to Mr. Vecchioni for having allowed us to contribute our experience to this project. We are also proud that the client asked us to integrate one of our senior partners, Antonio Posa, directly into its organizational structure in a pivotal role, and we wish him the best of luck in this endeavor, confident that he will lead the project to the success it deserves.
And here I would like to return to the lesson we learned: never start with a muddled idea. It is necessary to start with a plan, and not just the need to fill a temporary organizational void with a Temporary Manager. While we are happy to act as Temporary Managers for our clients, we prefer to begin our work with an industrial plan, or a specific project roadmap. We start by setting the groundwork, defining our priorities and objectives, and only then developing them in partnership with our clients. These are just two of many stories.
The rest I will hold on to for another occasion.
And now a few thoughts on our organization. BKey Consulting continues to develop along the same path that has enabled us to stay relevant in the market for the past 10 years. This year we welcomed into the BKey family two new and distinguished members, Francesco Marchese and Gianfranco Baldin. Marchese comes from a long and distinguished career in Italian and Multinational groups such as Barilla, Colgate, LG, and more recently Vorwerk as General Manager of the Bimby division. Baldin comes from a financial background with important and successful experiences in finance management roles Safilo, Maserati and Gruppo FCA.
It is always the same principle: with a common vision and who are characterized by a common way of viewing their profession, having often shared work experiences in managerial roles with the goal of creating a distinctive approach and management style, our style.
So, what should we expect from 2019? First of all we hope for stability, and that our governing body can manage to pursue it with determination. We must avoid the throes of recession at all costs. Our country is like a child just learning to walk, if we pull the rug out from under him, he is sure to fall and get hurt. Let’s smooth the path ahead and focus on the concrete actions that we can take while looking towards the future. By working for tomorrow, we have a chance of producing results today, but the reverse is not always true.
This is the time for brave visionaries who are prepared to lay the groundwork for the future, not for opportunists. As Pietro Barilla, an entrepreneur I once had the fortune to work for many years ago, once said: “We bravely go forth”. This phrase continues to ring true, and it contains two very essential components: progress and courage.
And with this, hoping that I have not bored you too much, I wish you all a very Merry Christmas and a 2019 filled with dreams of success. Go Back