Peter Axelsson has recently completed an assignment via Nordic Interim as Head of PMO and Commercial Lead M&A at the Finnish Post, Posti. His background lies within production, logistics, business development, and business management. When he started at Pharmacia as a factory manager in Helsingborg in the 90s, he learned important lessons about how to set up logistics concepts and strategies for a large group. Further roles at Frigoscandia and DHL, among others, lead him abroad for 14 years.
We have talked to Peter about driving complex changes in companies that are in critical situations and with a need for rapid action.
“At DHL our customers’ production was Asia but the market was in Europe and USA. It is complex to handle large transport solutions, warehousing, and distribution. Coordination of many different logistics solutions and IT solutions is required.”
In 2014, you ran a turnaround for Kuehe + Nagel‘s truck operations in the Nordic region. What were the challenges?
“The business had lost profitability and the management did not really know where the problem was. I acted as a link between the group management and the local organizations and analyzed the business. This resulted in an action plan with twelve projects and already after three months, the company showed black numbers.
In a turnaround, it is important to focus 100% on the areas that give positive economic effects quickly. Often the organization knows where the problems lie, but they do not know what must be done. The advantage of engaging an Interim Manager, is that you have no historical connections and can drive change quickly and efficiently. It is a great advantage to be able to avoid personal connections and internal politics. When this was done, I got a permanent role with responsibility for safe land transport which was very theft-prone. By, among other things, we built up transport systems with fixed, safe routes, satellite monitoring of the trucks, and double driver staffing, criminal activities were made more difficult.”
The next assignment was as interim CEO at Mont Blanc Group with the task to reduce costs and review future production structure. How did you solve this?
“We centralized the organization functionally and streamlined the operations. The board made the decision to close a factory in Sweden and move the production to Romania and we carried out a management buy-out for the French operations. It was a complex job to transfer skills and equipment, but it was necessary for the company’s survival.”
In 2019, Peter joined the Finnish Post, Posti, in a role as interim PMO. Posti had major profitability problems with its land transport. Half of all transports were internal support for letters and parcels and the shipping business was heavily loss-making. The CEO decided to engage an interim change manager to support the management and act as an intermediary between the CEO and the division management.
As an interim PMO you suggested several improvements for the business. How did you do this?
“I visited the largest freight terminals in Finland to see in practice how they worked. The divisions had already done a good analysis model that we used in our work. My contribution was to develop efficient proposals and to secure that we achieved quick results. To achieve rapid improvement, one must focus on the right measures and implement them quickly and efficiently. You must work with the revenue – raise prices where possible, and at the same time with the costs and review the necessary costs and which ones you can quickly cut off. For example, reducing driver’s allowances and increasing freight load on each vehicle (reducing the number of vehicles), provides major savings and a direct effect on costs. Raising prices and ensuring that you really invoice all the fees to which you are entitled under a contract also has a direct effect on revenue. As an interim, you have a lot of experience and the tools that are often lacking internally. You can tell the business what to do to reach both long-term and short-term goals. Already after a couple of months, we showed improvement in the results and the monthly results were positive. An important aspect here was to get the managers involved, communicate throughout the organization. It is important to quickly build trust in the organization to gain acceptance for tough measures. It is even better if the proposals are perceived as coming from the organization so that you avoid the “not-invented-here” problem. The suggestions are often already in the organization, it is important to find the best ones and get the organization to focus correctly.
The CEO must operationally step in. In this case, I supported the head of Freight on how to communicate with the organization and clarify goals and sub-goals, and why the changes needed to be done. To gain trust, you have to know what you are talking about and know the business as well or better than the managers who lead the various terminals.”
Peter presented over ten observations where three to four had short-term effects and others, such as streamlining IT systems and work processes, had an effect in the long-term. The board approved the strategy, and the division manager is now running the long-term projects according to plan. After completing the assignment in Finland, Peter was given the task to develop an establishment strategy in the role of interim Commercial Lead for Postis’ M&A projects in Sweden. In April, Posti acquired Aditro Logistics from Valedo, and the existing management team continued to run the business successfully. Peter was also responsible for the integration of Aditro Logistics into Posti.
What are your experiences of integrating a small company into a large business?
“In an integration, there are several traps to step into. The buying company often wants to introduce new administrative routines, a common financial system, personnel system, operating systems and mail, calendars, and servers must be centralized. With this type of decision, small, profitable companies often become unprofitable within a couple of months. New routines, extra costs, and reduced motivation of management and staff become overwhelming. I have seen several small companies quickly become unprofitable after acquisitions and we wanted to avoid this here through a “pull strategy”, which means that you integrate certain necessary processes such as accounting, code of conduct, etc., but not all processes. We let Aditro Logistics’ management run the integration projects and, together with Posti, identify which processes would be retained from Aditro and what would be retained from Posti. We also identified processes within Aditro Logistics as “best-in-class” and these are now being implemented within Posti.”
What should you think about when driving a project in a country with another working culture?
”You need to listen. You must understand where your competence lies and what is of value for the organization. Being humble is very important. Different countries have different ways of leading an organization. In France, you are the boss and make the decisions, in Sweden, you discuss with your team to come to a joint decision, and in Romania, the team assumes that the manager says exactly what to do. Humbleness, being responsive and the ability to adapt the leadership according to the circumstances is the key to success.”