Leading Europe's Second Largest Sugar Producer | In Practise

Leading Europe's Second Largest Sugar Producer

Former CEO at Nordzucker AG

Learning outcomes

  • How to take responsibility of your organization
  • Navigating difficult conversations firing employees
  • The importance of open communication from the top down
  • How to communicate in a crisis
  • The impact of the abolismhment of the European sugar quota and how Nordzucker AG reacted to the supply glut
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Executive Bio

Hartwig Fuchs

Former CEO at Nordzucker AG

Hartwig was the CEO of Nordzucker AG, the second largest sugar producer in Europe, between 2010-18. Nordzucker was founded in 1838, employs over 4,000 and has 18 manufacturing plants globally that produce over €1.3bn in revenue annually. Hartwig has spent over 30 years in commodities and started as a grain and feedstuff trader at Toepfer International. Read more

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Hartwig, maybe taking a step back and exploring the transition to CEO, what was the biggest challenge for you, in that transitionary period?

The biggest challenge was that I couldn’t prepare for it. That sounds funny, but you have to look back a little. When we were sent to Asia, at the end of the 80s, we could prepare for that. We read a lot of books; we asked a lot of people that had lived there. We could read into things. When we shifted from Asia into India, we could, again, get a lot of material that we could access. We could talk to people that had lived in India, that were still living in India and they could tell us the things to keep in mind. You could prepare yourself.

When, ultimately, I was appointed to a member of the management board, that was really great. But again, there were some people that could tell me, this is how it goes. Other members of the management board, as well, they could say, this is how we do it and this is how we communicate with each other. The moment that, out of this management board, you are promoted to CEO, everything changes. There’s nobody that really can tell you how it is. Suddenly, you have to take lonely decisions. You don’t have consensus decisions. You are not being asked by your CEO, what do you think? You have to ask them what they think, but then you have to draw your own conclusions and you have to live with that. That’s something that you can never prepare for. You have to decide and you have to live with your decision and you have to go through with it.

The consequence of what you are doing is something entirely different to being a board member, being a member of something.

How did you deal with that?

I was, basically, being thrown into the water. I was a member of the management board and, suddenly, the majority owners came up and said, look, we want to have a change and we want you to run it. How do you feel about that? The funny thing is, when I heard that idea, for the first time, I felt very honored, but I tried to reject it. I tried to say, look, I’m really comfortable in what I’m doing. I’m a trader, by heart and I want to keep trading; CEO is such a big thing. There were lots of politics and all that.

Ultimately, though, I took it and, ultimately, what I did was, I surrounded myself with the best people I could find. I’d got a lot of people that I’d felt were not up to the task. I surrounded myself with the best people, particularly to cover those loopholes that I had in my knowledge and experience. I was relatively young, so I surrounded myself with people who knew better; professionally better. Not than the CEO, but in their respective fields. These people, they helped me a lot in getting things done, the right way. So, surround yourself with the best people you can find.

How did you approach building that team, when you stepped into the role of the CEO?

When I was appointed CEO, people already knew me, so basically, there were a lot of people that said, this is really great; we’re excited about it. He’s young, he knows the business, he knows us; this is really great. At the same time, they were, of course, a little bit nervous about what was going to change. For example, when I came to Nordzucker AG, as the CEO, we had significant issues, at that time. We had very high debt. We had equity that was really low; we were burning cash, which we all know is a death sentence, to any kind of corporation. We had to do some drastic things.

Again, I had interviews with the key staff, in my very first week. Every hour, I had one person come to my office. I just wanted to get to know them, talk to them for half an hour, make my own notes and, after that week, I very quickly, in a good way, decided which people I could work with and which people I should say, look, sorry, that doesn’t make any sense, anymore, for what we have in mind. That’s what I did. In four weeks, I had a 28-person, so-called leading team, being told, by me personally, that sorry, I don’t want to work with you here; I don’t think you are up to it. Nothing personal, but that’s just what it is. I replaced them, both with people from the outside, as well as from the inside.

What it did was, people realized that I was not going to waste any time. I was not going to talk too much about things over too long a period, but I would do things rather quickly. But also what they looked at was, oh, he’s also looking at people inside the company, who suddenly got promoted and being told, look, you can do better than what you are doing right now. Suddenly, for everyone, there was also opportunity. That’s the old lesson of running a corporation, isn’t it? If you take one or two people, at the top out, you make something like 20 people happy. Because 20 people, within the organization, have a chance to be promoted. This is something that also helps the whole process, quite a bit. Those are the really motivated people, the people that follow you, that really go along with you decided as being the right way. That is how it works.

So actually being critical and taking out some of the old guard of management, actually drove motivation for the team and, potentially, drove some credibility, for you, as a leader?

Yes, it created both. Suddenly, people realized that something is moving here. Some of the old chaps are being kicked out because, obviously, the new CEO doesn’t think that he can work with them. Fair enough. But it means for me, personally, that I have a chance to be promoted because, in front of me, some people are going to be promoted. At the same time, they realized that I talked the real thing. It’s not that we need to change things but it’s more like, okay, we are changing things. That was the most important thing.

I can give you one little example. We had an open position as the leader of the HR department, which was pretty important, pretty big. We had 18 factories so the head of the HR department was a pretty important position. That guy had left and they left before I came on board so we had a big, open position there. My predecessor had checked with some head hunters for people from the outside and I stopped that process because I had identified two people, within that department, that could, over time, probably fill that position. So what I did was, I promoted one of them, a lady, to take care of the HR department, for at least six months. I openly communicated that with her and with the entire company that if was on a provisional basis, until we decided what to do next. But I told her, if it works, you get the job. If it doesn’t work, it’s not going to hurt you, because we communicated, right from the start, that this is a provisional thing right now. So if it doesn’t work, I will tell you openly why it doesn’t work and then you slide back into your old position and no damage is done. That’s how we did it.

Of course, what happened was, after six months, she took that position permanently, because she was quite a discovery and she did a hell of a job there.

How did you have those difficult conversations? Firing, specifically the old guard but, more broadly, those people in the early days?

There are two very, very important things that always work for me. Number one, I always did it myself. I talked to the people. Not HR. I would say, from a certain level upwards, whenever we had to separate from someone, I did it myself, but I always took a witness with me. I always had someone that I trusted, with me in such meetings. This was for two reasons. Firstly, for the legal reasons; what has really been talked about and discussed? You cannot do that one on one. Unfortunately, you have to have a witness. For me, it was important to have someone there that could later say, if things turned sour, this is not how it was communicated. But the second thing, which was much more important, was that if, in such a conversation, which you never know how it’s going to end – it could end up with someone threatening you or could have a complete breakdown in tears, could start begging for the job – that you have someone with you, that could be either correcting, a little bit, of what you say, softening it or making it clearer. Also, guiding you a little bit, into a different direction, if that person feels that you are running a bit off the beaten track and a bit off what needs to be communicated.

Of course, that function can only be taken over by people that you, as a CEO, really trust. Also, the sense that that person is not going to talk about this, outside, how this meeting went. But for me, it was always important, after the meeting was done, that someone was sitting there, telling me, okay, I would have done this different from how you did and okay or not okay. I always needed to have someone who could, later, tell me how it went. That worked really well. Unfortunately, I had to separate from quite a number of people in my business career. There is only one case, of someone who never, ever talked to me again, after that. All the others, I could meet today, have a glass of beer or wine with them and could talk to them, with no problem at all.

It’s quite important to do it yourself but it’s also important to have someone with you, that could help you a little bit, if you are going the wrong way.

How did you look to structure those conversations?

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Leading Europe's Second Largest Sugar Producer

March 19, 2020

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