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Case Study - Thyssenkrupp Steel USA
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Transformation

“David proved his capabilities as we worked together to turnaround a critical Thyssenkrupp business creating a positive shift of more than $100M EBIT in twelve months.

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David brought a structured and efficient process to develop detailed plans for all of our units and drive alignment across 140 leaders.

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His process and personal skills drove our team to fully confront reality, create a path to our desired future and deeply engage and empower our leaders and employees to unleash their full potential.”

 

- CEO, ThyssenKrupp Steel USA

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By partnering with David, Thyssenkrupp Steel USA:

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  1. Developed an effective senior executive team that engaged the organization as an integrated team improving effectiveness at all levels

  2. Dramatically improved morale

  3. Increased all sales and operations performance metrics 

  4. Reduced operating loss from $100M to positive EBIT in one year

  5. Ultimately fulfilled their original goal of selling the company, which they did to Arcelor Mittal

Company Overview

TK Steel USA was a greenfield steel processing plant situated in Calvert, Alabama. Valued at $3.5B, it had a 5.3 million ton capacity with hot rolling, cold rolling, coating and finishing lines, and had 1400 employees. It was a subsidiary of ThyssenKrupp a $70B German conglomerate. 

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Challenge: Steel for Sale

Thyssenkrupp Steel USA sought acquisition for 2 years with no interested buyers.  Its owner urgently needed to sell the business in order to reduce debt and stop cash flow losses. The company already had $500M+ in losses.

 

The executive team had major strategic, tractic, and relational misalignments, strategically, tactically which significantly impacted the bottom line in every branch of the organization. For example, Sales and Operations were not aligned what their core offerings should be. Operations was then unable to bring on-line processing capability to support Sales' plan, resulting in the supply chain delivering more than 25% wrong material.

 

This failed business model implemented from corporate caused a conflict of cultural identity. Self-purported to be the best steel processing facility in the world, leaders had left top industry jobs to be part of expected success to instead be faced with the reality of an organization that consistently under performed.

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Strategy and Solution

David partnered with the CEO of Thyssenkrupp Steel USA in order to resolve a significant breakdown in senior executive relationships. By aligning senior leadership teams on their values and goals, he got commitment to lead a turnaround as a single team.

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Together David and the senior leadership team developed a 1-year value creation plan by engaging the top 3-level leaders from all functions of the business. David facilitated a truth-telling engagement process that illuminated the reality of past and present misalignments throughout the business. By healing the people system David was able to help create clear, actionable plans that leaders believed in, owned, and executed effectively.

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David then helped leadership teams implement robust performance management processes to increase accountability and ensure achievement of weekly and monthly improvements. Additionally, David was able to help align both Operations' and Sales' planning processes, bringing online an entirely new processing capability to deliver product. Leadership teams were able to effectively and, most importantly, meaningfully engage employees throughout the company, boosting morale. The number of items sold decreased due to the increased pricing of key products, ultimately increasing profit.

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