The streamlining of headquarters activities in the beauty industry
The question:
How to make the organization evolve to reduce its complexity, improve its profitability and foster the emergence of a strong culture in a post-acquisition context?
The client’s starting point
- A major player in the beauty industry organized into 3 divisions
- Major recent acquisition significantly increasing the workforce with a total of 20,000 employees in 2018 in more than 130 countries.
- Strong growth challenging the company as it struggles to create value for its shareholders
Akoya Consulting’s response
- In-depth analysis of employee data to identify the strengths and irritants of the initial organization (complexity, costs, synergies, etc.).
- Establishment of organizational scenarios to estimate potential short and long term savings in the future organization
- Organization of work sessions with the teams of each department to finalize the design of the new organization according to the chosen scenario.
The whole story
After an acquisition that significantly increased the company’s workforce, our client quickly found itself confronted with a number of organizational difficulties that affected its profitability: high level of complexity, redundancies, unsuitable manager/do-ers ratios, long decision-making circuits, silo organization of certain teams, missed opportunities for synergies, excessively high costs, cultural divergence between the two merged entities.
Thanks to an in-depth analysis of the initial organization and the realization of an external benchmark, Akoya Consulting was able to participate in the elaboration of organizational scenarios for the target organization, which allowed to solve many of the problems mentioned above and to achieve the desired savings.
Working closely with the leaders of the divisions and support functions, Akoya Consulting evaluated the direct and indirect costs incurred by each scenario to enable future decision-making.
The difficulty in this exercise did not lie so much in estimating direct costs, which could be carried out relatively easily with the available HR and financial data (e.g. changes in salaries, redundancy costs, recruitment). On the other hand, this work turned out to be more complex when it was necessary to estimate the indirect costs induced by each scenario (e.g. disengagement, retention, loss of critical skills). HR teams have a key role to play in this type of project to highlight these indirect costs, which too often are the major overlooked costs of reorganization projects.
This in-depth analysis enabled us to choose the most relevant scenario in view of the company’s stakes. Today, our client has completed its transformation. While it is still too early to assess the impact of these changes on the profitability of the organization, some first positive signals have already been observed.