Lehto Group created a growth strategy and management system to meet the future needs of the company, which is undergoing rapid growth.
- Service areas and the group have a new strategy which is being supported by principles of performance-guided construction: industrial manufacturing, design management, repeated concepts and having the best experts.
- Common view on implementation of strategy and foundation that supports growth and productivity
When an entrepreneur-led growth company moves into a new size class over a period of a few years, straightforward operational models start to require support from a common strategic foundation and management system.
The need for structure became even more evident when the company grew due to business acquisitions, along with which many corporate cultures were combined. The harmonizing of different corporate cultures with Lehto’s business acquisitions required quite some filing of rough edges, a process which was not completely painless.
The company was now faced with a kind of acquirer’s dilemma. On the one hand, the aim was to keep the previous owners of the acquired companies in order to maintain the entrepreneurial attitude. On the other hand, being entrepreneur-led increased the risk of silo mentality.
Cohesion for the service areas
Lehto Group had quickly grown into an entity with eight subsidiaries which all had their own operational methods.That’s why, in the summer of 2016, the company began to construct growth strategies for the service areas with Talent Vectia. The aim of these strategies was to create a common strategic goal, to increase effectiveness with systematic operational models, and to make the company look even more unified in the eyes of its customers.
During the project, new strategies were created for four service areas, after which the group strategy and management system were also updated. Even though an individual strategy was determined for each service area, their comparability and compatibility with the group’s strategic priorities was ensured with a common method.
With the aid of these eight themes, the strategy remained closely connected to the practical business operations of each service area. This is important, since many group-level strategy descriptions may feel distant at the business operation level. “The service areas have a lot of power and the responsibility over their own business operations. This helps to maintain the needed entrepreneurial straightforwardness.” In addition to strategic objectives, it was also important to create a common vision of future opportunities and the most important priorities and deselections.
We received very good feedback from the participants about having an outsider to support the process. We probably would not have been able to get this done on our own." — Hannu Lehto, CEO, Lehto Group
Unity supports the innovation of tomorrow
In the development of the management system, it was important to determine the level at which each matter should be taken care of. For instance, acquisitions are now carried out in a centralized manner in each service area, whereas earlier the subsidiaries had made acquisitions on their own.
The new strategy and management system were not, however, created to solve the problems of yesterday, but to meet the challenges brought about by the modernization of tomorrow. In the future, great changes lie ahead, and the first of them is the continuation of growth. In 2016 alone, over 300 people joined the company, which meant an increase of over 50%.
The development of digital solutions is the most important development activity that has been centralized in the group, since there is no point in developing digital solutions separately in each service area. ‘In our company, digitalization affects almost everything, from acquisitions to production and customer experience. It is one of our most significant opportunities, and it improves all our processes.’
The modernization of the management system also plays an important role in this development process, as it improves the conditions for moving forward in the development of both productivity and digitalization.
“We probably wouldn’t be able to move forward with such efficiency if we didn’t agree on the how the strategy is to be realized”, says Lehto.