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2. Doelstellingen Argumenten • een gepassioneerde spreker met een boeiend onderwerp het podium geven • aangename, interactieve, maar tevens besloten meetings organiseren • topmanagers een levendig en leerrijk debat laten voeren • en dit in alle discretie www.argumenten.be

3. Initiatiefnemers • PKFBelgië: bedrijfsrevisoren, accountants, belastingsconsulenten en management consultants • Capitalis Belgium,Managing Partner in Life & Business : Expertise inPersonal Financial Planning en onafhankelijk advies in Employee Benefits • MenT Group: consultants in Interim Management, Executive Recruitment, Assessment en Human Capital Audit, en detachering van technische specialisten • Meer informatie over de drie bedrijven vindt u uitgebreid bij het Argumentenmapje www.argumenten.be

4. Gastspreker 2 mei 2005 Patrick De Groote Voormalig CEO en Gedelegeerd Bestuurder Zenitel N.V. “Top management: gevoelens en emoties bij herstruktureringen” www.argumenten.be

5. Praktische afspraken • We beginnen met het exposé hier. Het laatste deel van de uiteenzetting is expliciet opgebouwd als interactief debat waar van u als deelnemer een actieve input wordt verwacht. • 18u30 aperitief in de hall, waarna we voor het diner beneden in de zaal worden verwacht. • We trachten het officiële deel stipt af te ronden om 21u30 www.argumenten.be

6. Introduction • Capital markets between 2000 and 2004 are characterized by uncertainty and crisis of trust due to sputtering economy and downwards spiral in certain sectors. • Ambition of CEO’s was often in unbalance with economic reality and lacked modesty. Unfulfilled expectations in shortening reporting cycles give raise to the “Battle of the Quarters” by management. • Recent international scandals around highly estimated CEO’s result broadly in questioning leadership and entrepreneurship. • Boards become nervous and tend to interfere in operational matters. Values of business and social responsibility start to embody changing contents due to mutating interests from reference shareholders. • Against this prevailing back-ground, a turn-around becomes a very complex phenomenon in a turbulent environment. • Related emotions from top managers cannot be neglected and influence decision taking.

7. From Management literature….. Skills Finding the right balance Emotions Methods

8. The sound track - Bringing companies on speed: the Algerian experience (‘72-’77) - Power, steel, non-ferro - Difficult business environment in the seventies: new technologies, poor skills - Nation wide strategy - Increase output and reduce cost through performant maintenance of production equipment (’78-’96): - Involved in several hundreds of restructurings in industry, power, transportation - World-wide - Development of professional methodologies - Maintenance engineering at ABB Service Worldwide (’96-’99): - The breakthrough of Full Service - Acquisitions - Taking over maintenance departments and re-structure - The Zenitel adventure (’99-04): - The call for the impossible - External and internal turbulent and complex environment - How to get a terminal patient out of the hospital and give him a new future

9. Zenitel’s Change Programme 1999 - 2004 First phase 1999-2002 based on two axes: • Business plan • Acquisition strategy Position for growth • New organization • Focus on core-business – strategic alliances • Business processes • HRM • Communication plan • Cash position • IT and reporting • Grip on the costs Strengthen the base Next phase 2003-2006: profitable growth

10. SRH Marine Airtime Services Wireless Solutions Mobile Radio Marine (On-board) CSS SPACE BU 50% Euro Marine Divested 50% Rhein-metall Divest non-core: Debitel BE +NL ATS EuroMarine Servoteknik Sirius Production Others From SAIT – RadioHolland and STENTO to Zenitel – Milestones Divested Acquisitions 100%: Ramacom RNS Halberthall ATCOM Radioteknik Telpro plus INES Acquisitions 100%: Servoteknik Colsys Wireless Solutions CSS

11. Managing crisis and change processes (1) - Why do you take that challenge ? - Not without danger - The kick ? - The call for the impossible ? - Natural unrest? - The re-structuring path – a matter of falling and getting up again and again: - Doubt - Believe in yourself - About doing the right things and the things right - The big choices: - Strategic plan - Mergers and acquisitions - Divestments - Dealing with the stock market and all shareholders - Up-dating the business plan

12. Managing crisis and change processes (2) - The important moments: - Watching the cash: a continuous battle - Capital increase: oxygen - About reference shareholders and listed companies - New corporate identity – new HQ - MBO - The difficult things: - Lay-offs - Setting up a new team - Internal policies – the hidden agendas - Post – M&A integration - Lay-offs of management team members - Managing all stakeholders: personnel, banks, suppliers, customers, media…. - Why and when do you stop: - Your own choice, at the right moment - The motivation curb - Invitation to new challenges

13. Challenges (1) - External (over the past years): - Global economy - Telecom sector - Internet bubble - Own markets under pressure - Scandals and declining trust - General entrepreneurial climate - Uncertainty: banks- investors-customers-suppliers- …. - Power of the media - Financial annalists - Stock exchange

14. Challenges (2) - Internal : - Nobody likes change - New organization incl. change of top mngt and board - Strategic plan and focused offering - Consequences: lay-offs, divestments, acquisitions - Focus on core-business: external partners for supporting processes with related acceptance/integration problems - Several simultaneous processes: training, motivation, communication, corporate image building, re-engineering internal processes - Figures: results and their development vs expectations - Board and its pressure - Shareholders: change from reference shareholders - And above all: the troops at home

15. Emotions (1) - Certainties: - Quick decision taking - Once decided: do it - Believe in the company; believe in yr team; believe in yourself - Decisions in team : weak or safe? - Have the courage to stop long lasting decision processes - Doubts: - Major choices: Am I right? (repositioning of offering - divestments – acquisitions…) - Difficult decisions are taken alone: the general on the hill - Finding the right people

16. Emotions (2) - Emotional moments: - Lay-off of people, especially of management team members - Cutting deep, but how deep? Afraid of loosing capacities? - The battle against continued stress: unexpected events and poor understanding - Keep the pace at the home-front - Lonely at the top - Process of falling and getting up, again and again: never ever give up - A feeling of satisfaction: - Appreciation especially by your people - Sounding board of objective professionals - Tranquility of mind: ethics above all - The feeling of having moved forward

17. Emotions (3) - Destabilizing factors: - Diversity of reference shareholders interest and corporate governance - External influences become an increased bourdon - Figures: improvement process takes always too long - The islanders: incompetent people generate monopolies - Dealing with contradictory interests - Post acquisition integration: cultural shock and clash – personal policies - hidden agendas. - The pressure of the stock exchange: volatility, liquidity, price - It would be easy to hit the target every time if it would just stop moving (N. Hamson) - You need to have a “thick skin”: - Some managers go through all of them at different points in time: anger, abnormal fears, guilt, resentment, relational problems with team and private, grief, anxiety, despair, fatigue, tension, loneliness, withdrawal, worry, compulsive behavior, sometimes panic or obsessive and negative thinking, depression - The solution: - The thick skin. Don’t let doubt eat your self-confidence. - The real art is to find a rest point in the turbulence - Living in compartments - There are no miracles: good results are the consequence of gradual successes

18. What helps to balance the emotions • Strategic plan: as a reef facing the breakers • Importance of active assistance of reference shareholder • Speed and accelerated transition: quickly search for stability in turbulent times • Call for top people: line managers, consultants, allies.. • “Educate” your consultants • Make choices, take decisions and execute the plan: severity, discipline, rigorous • Cost awareness management: if needed, you never cut deep enough • Communication: often but no overshooting , repeat messages, transparent, bad news very early, successes • Work on company image • Inform on regular basis suppliers and bankers • Controlling internal processes. Performant reporting. Clear accountability • Keep performance high - pinpoint value creating incentives • No position jockeying: everyone has to merit his job • Be fair for all integrating groups after M&A but no compromise management • Realism in self-confidence – ban self-satisfaction • Make sure your troops are with you

19. and 4 major sources of emotions….. • Success • Is a word of yesterday (Bob Delbecque): you have to earn it every day. • Is never the result of one person, but always from a team. • Failure • Is watching at each corner. • Is also never the result of one person, but always from a team. • Team • A leader is as strong as his/her weakest first line report. • Thus….invest in your team. • Reputation • Comes by walking and • Runs away on a horse (Peter Anthonissen).

20. Some statements (1) - Organisaties op scherp. Herman van den Broeck en Steven Mestdagh: - Apart of human capital, change is considered as the most important factor of success (CEO poll) - An important part of human information treatment is based on discovering related and recurrent patterns with the goal to tune our behavior - Managers feel well if they can plan, monitor, coordinate, predict and drive. Quid if something happens that doesn’t fit this picture? - Finding a state of mind between search for change and consolidation - Managers judge too often on the basis of non-related facts and not on the basis of their inter- relations – reductionism: one focuses on things, not on relations - Change-fatigue: feeling fed up to spend energy in changing processes knowing that it won’t bring anything or that it will be changed again in the future - Stress: danger of predicting or anticipating specific results, in pre-calculating exactly what change-programs will cost (lots of managers take for granted their wishes) – 80% of change programs fail because of an exaggerated initial optimism, loosing all sense of reality by placing the parameters around the change program in a wrong perspective

21. Some statements (2) - Leiden in woelige tijden Daniel Vlerberghs en Hans Begeer: - you don’t need to wait until change happens: you can initiate it yourself and monitor it therefore you need to love change i.e. one should learn to break resistance against change, starting with oneself - Robert Stouthuysen: today’s managers need to : • Be alert for developments, also external to the company: be visionary • Be continuously up to date in the profession: be professional • Take time to think and afterwards to execute/drive: be manager • Extract of your people what they have: be leader • Be agents of change: be able to mobilize - Change management based on a relation between structure, culture, strategy and management - The loss of certainties in organization create stress: • Predictability • Feasibility of the organizational structure • Stability • Clearliness: loss of hierarchical structures , definition of responsibilities • The environment is changing so quickly so that adaptations to the external world only are not sufficient anymore

22. Some statements (3) - Turnaround management in de praktijk. Peter Faulhaber & Norbert Landwehr. : - Valkuilen en struikelblokken van de turn-around : • Vluchtgedrag • Selectieve waarneming • Vergoelijken, zelfbedrog, bedrog • Verkeerde opzet van de onderneming • Gebrek aan consequentie en radicaliteit, verkeerde consideratie • Opzetten van valschermen: de valkuil van de afscherming • Reparatiegedrag • Verkeerde of ontbrekende communicatie • Gebrek aan vertrouwen bij stakeholders • Foutieve beoordeling door stakeholders • Verlammingsverschijnselen - Turn-around management is een creatieve daad, waarbij een bedrijf onttakeld, gestut en opnieuw wordt ingekleed

23. Some statements (4) - The service profit chain. J.L.Heskett, W.E.Sasser, L.A.Schlesinger: - Hiring for attitudes first, skills second - The tyranny of “either/or” vs the policy of “and/also” - After Atlantis. Ned Hamson: - Chaos and opportunity are the twin choices for individuals and organizations as one era ends and the shape of the one to come is as yet unknown - How much longer will successful companies survive if they don’t figure out how to respond to the challenge of change - Currents, rip tides and whirlpools to overcome: I want it now, new, beautiful/elegant, high quality, low cost, earth and users friendly, and made just for me - Managers and workers saying: I want more input/control over my job, it should have meaning for me, I need variety/newness, I want predictability too, I want my job to have less hassle in it/ user friendliness/low cost to me, I want it to fit me and I’m going to watch your feet, not your lips

24. Some statements (5) - Dagboek van een vijftiger, Herman van Rompuy: - De herhaling geeft stabiliteit. - Gecompartimenteerd leven: daarvoor moet je een vijftiger zijn - Waarheid komt 2 à 3 jaar later - De waarheid kan kwetsen maar de onwaarheid nog veel meer. - Het moeilijkste is niet vernieuwen maar trouw blijven - Steeds meer doe ik dingen uit plichtsgevoel. Daar komen geen initiatieven uit voort maar wel goede raad en goed beheer - Wie zich te evenwichtig voelt mist de gedrevenheid - Wie vaak ontgoocheld is, is eigenlijk zeer pretentieus en wie het niet meer is heeft geen verwachtingen meer

25. Some statements (6) - Five frogs on a log, Feldman, Spratt: - Change is expensive but delay can be catastrophic - If I had to do over again, I would have done it faster - Getting good players is easy. The hard part is getting them to play together - A merger between equals gives the managers of the combined organization a license to engage in an interminable debate over who has the best practices - One calendar year in transition is equivalent to 7 years of normal growth, and so you have to move at an unbelievable pace (John Chambers – Cisco) - Management caught spinning its wheels is almost invariably management that is pursuing too many business initiatives simultaneously - The kind of reengineering that must be done in the middle of a major transition is like operating a MASH unit. It’s not pretty, It’s not perfect. But it saves lives.

26. Contact Patrick DE GROOTE Nelemeersstraat 9 9830 Sint-Martens-Latem Tel. +32 9 282 86 90 Fax +32 9 281 23 10 GSM +32 495 77 77 76 Patrick.De.Groote2@telenet.be www.zenitel.biz