Former U.S. president John F Kennedy said that the one unchangeable certainty is that nothing is unchangeable or certain. This is a reality that Steve Filipov, freshly reinstalled as president of Terex Cranes, has come to terms with as he battles to get the business back on track.
If you always do what you’ve always done, you’ll always win what you’ve always won. This familiar management adage – with its implicit message that remaining the same in a rapidly changing, ferociously competitive business world is not an option – could strike a chord with Filipov. The recently reinstalled president of Terex Cranes admits that he has a major task to turn Terex’s ailing crane business around.
“It’s going to take a lot of work,” he told Alex Dahm, editor of ACT sister magazine International Cranes and Specialized Transport. But he is confident he will succeed. Filipov headed up Terex Cranes between 2003 and 2008 before moving on to manage new business development and then the Materials Handling and Port Solutions business, which includes port and industrial cranes. Now he’s back, and with a critical mission – to turbocharge Terex’s crane business.
“I have tried to keep in contact with a lot of customers,” he said. “I still end up at shows and see people around. We have a small community of customers in cranes and that is one of the benefits – I still have those contacts so I hit the ground running. That’s a big positive.”
Another is Filipov’s open management style and ability to relate to customers: “If you have a problem, you can call me and I am going to get it fixed. That is going to be our number one priority.”
Indeed, he sees this as one of the secrets of success. “People tend to get sucked into internal issues, but we need to be focused on the customer,” he said. “My job is going to be to get the organization focused on the customer, and get out there and win deals. We need to get share back in key markets and key product areas. Terex Cranes is still a solid business; it just lost its way. That will change.”
As well as a laser-sharp focus on customers, Filipov has identified another issue to tackle – product problems. “We are going to get out and fix those problems… I have to change the dynamic and I will,” he said.
Taken to task
As part of his 100-day resurgence plan, Filipov is putting together a taskforce to tackle the issues.
“I have already assembled a team and we are working on a communication plan with our customers so that, in the next
few weeks, we can start fixing some of the problems.”
He acknowledged Terex Cranes’ recovery will take time, but has a bone-deep conviction in his ability to turn the company around.
“We are going to get back to where we were,” he said. “When I was in the crane business the last time, I think we put some stakes in the ground, we said that we were going to be number two in Germany and we were number two in Germany. We were the market leader in France with the PPM product and then with the rest of the products we became the leader there. We were in the top two in North America and we are going to get back there.”
Terex Cranes remains in the top three or four crane manufacturers in the United States. By picking its battles carefully, Filipov believes the company will win back significant chunks of market share.
“I would be crazy not to say that we have product gaps, but we will fill those gaps. One of the other fundamental things that you will see me do over the next couple of years is invest in new products. Whether the market is good or bad – indeed, more importantly when it’s bad – we need to continue to invest in new products.”
Filipov drew up his 100-day plan with a focus on dealing with what he calls “the burning house issue.”
This means the business must focus on four priorities. “Financially, the business is in a difficult place so we have got to address that part of it,” he explained. “We also need to address the credibility and get back into the market. And we have got to address product issues in the first 100 days. We are also going to have to address our footprint; we have too much footprint for the level of business we currently have.”
Filipov said that Terex Corporation will become a smaller company focused in three businesses – aerial work platforms, cranes and materials processing. “Cranes is a significant part of the business, but it is underperforming and it is my and my team’s job to turn that around.”
To that end, “What I am calling commercial excellence is going to be a key part of the longer term focus. What I mean is to continue those valued customer relationships, to manage our pricing better, to manage our pipeline better, to manage my sales team better. There is a whole lot of heavy lifting – no pun intended – around commercial excellence where I think we can get much better in Terex Cranes and that, for me, is going to be a big focus, now and in the future.”
Filipov would like to get the business to a break-even point in 2017 and the company will launch what he describes as innovative, game-changing products.
“My true definition of success is when customers really start to see the difference and see us getting some positive momentum,” he said. “That would be my target in my first 12 months, but it’s going to come with a lot of hard work.”
As for service and support, he mentioned how difficult it is to find service technicians, “but we are going to pick our areas where we have a significant installed base and we are going to push and drive more penetration with those fleets.”
That may mean the company setting up its own infrastructure and working to improve the dealer network.
“We can’t do everything ourselves so we are going to have to rely on our distribution network where they perform. Where they don’t, we are going to have to look at finding new dealers. Training is a big part of that, for sure.”
Another opportunity is to increase the share of the global spare parts business. Unlike in overhead cranes, the mobile crane business is vertically integrated.
“In the overhead crane business, we make our own motors and our own gears so our ‘captive part’ of the parts is pretty big. When you look at mobile cranes, or tower cranes for that matter, we buy 70 percent of what we build. Are we going to get the bulk of the parts for the engines and for the axles, probably not that much? I think we need to be aware of that and get more of our installed base for sure, to drive more business for us.”
Getting it back
As to the future, Filipov is excited.
“We are going to get out and start to re-engage with our customers. This starts with me and then the team is going to follow suit...” He continued, “We have a plan. Now we need to execute it. That is the challenge, but I am confident that we have a good team. We have good products and I am not afraid to get on the road and be aggressive and get out there and re-engage so I am looking at this as a good thing…"
“I think it is going to be really fun to get back into the mobile and tower crane customer base. I have never lost touch with many of them and many have voiced their frustrations to me, but until you have got the power or are at the wheel it makes it harder to drive that change. I am not going to shy away from that now and we are going to make some change where we need to. We are going to make the hard decisions and we are going to fight. It is high time for us to win and I have got to get the team winning again and that’s what I’m going to do.”