Makro directors in shock exit
Four of Makro’s five board directors, including MD Hannes Floto, left suddenly on Friday, and Makro Group has replaced them with external consultants, The Grocer can reveal.
MD Hannes Floto, financial director Stefan Hesse, operations director Patrick Legro and customer director Mark Copeland all left the wholesaler. Dominique Minnaert, COO for Metro Southern Europe & UK, immediately instated a new board comprising executives from business turnaround consultancy AlixPartners.
Alix began a review of the loss-making business three months ago. Metro’s UK wholesaler subsidiary has racked up losses in excess of £100m in the last four years.
The Alix executives appointed are: Klaus Raettig, who takes over the role of MD, Jens Koeppen becomes finance director, while Dan Murphy becomes director of assortment and stock management and Martin Schumacher is the new operations director.
The only board director still in place from this morning’s reshuffle is offer director Huw Edwards, who joined from Asda two months ago. Edwards will take on additional responsibilities as commercial director for offer, merchandising and marketing.
In a statement issued this afternoon, Makro said the departures were “due to differing views on the strategic direction of the company”. The directors had left on “amicable terms, based on mutual agreement” it said. A call to the Manchester HQ confirmed that the four ex-directors had already cleared their desks and left.
On the new appointments, Metro’s statement added: “AlixPartners already supports Makro UK in its restructuring activities, as an advisor, and the nominated managers are well integrated in the activities and understand the challenges the company faces. This will enable the new board members to act quickly and decisively.”
Makro currently runs 30 cash & carry stores across GB and is targeting a turnaround. “The new management team will ensure a fast and professional steering of this process,” the statement added.
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Readers' comments (40)
GRO50920 | 10 Jun 2011 22:38
I can’t but help feel a twinge of sympathy for Hannes, Patrick and the other directors.
After all, they could only plan their strategy based on information from their direct reports; namely the Store General Managers (SGM’s), the Field Regional Operational Managers (FROM’s) and the Customer Managers (CM’s).....and the relevant information was always hidden from the directors. I can only hope that the business turnaround consultancy AlixPartners read my comments.
I had the misfortune to work for Makro as a Customer Consultant (now known as a Field Sales Executive) between 2009 and 2010. I will comment on some things I noticed.....
1. The structure of the sales team
You see, Makro decided to try and turn around its position in the UK and introduced a field based sales team to try and develop sales with Horeca (catering) customers for both cash and carry and delivered foodservice. It didn’t work. Why?.....well let me tell you.....
Every store has a team of field based Customer Consultants....I was one.
This team is managed by a person called a Customer Manager.
This Customer Manager did nothing at all. There was/is no point at all in their job. They sit in their office in every store and do nothing. Each one is on around £30k per year so work it out. 30 stores and 30 Customer Managers plus cars are costing Makro over £1m every year. Money wasted.
And because these Customer Managers are doing nothing it causes complete resentment and low morale among the sales team because they see their boss do nothing all week.
The next layer of management in the sales force is called Field Regional Operations Managers. There are four of these in the UK looking after 7-8 stores each. They send emails to the customer consultants and are the real managers of the sales force. However, the store based Customer Managers then resend these emails to the sales team to pretend that there is a purpose to their job.
But can you blame them? Would you put your hand up and say that you were obsolete?
Now the thing about Makro is that there is a real culture of fear and keeping your head down.
You see, every Store General Manager and every Field Regional Operational Manager are actually aware that the Customer Manager job is obsolete but are too scared to say so.
You see, no one wants to draw attention to the fact that their direct report is obsolete because it will draw attention to them as to “why this wasn’t noticed before?” or “why have you let this go on so long?”
The solution is to just stop, reassess and admit that the position is obsolete and give them a territory as well. In effect, make them, a senior customer consultant.
2. Too much range
There is too much range. Why stock many different sizes of the same product. Stock only a large and extra large size.
3. The delivered foodservice is a loss maker
4. Recruitment
The recruitment process is a joke. I saw some talented people get turn away from a job because the Customer Manager felt threatened by their ability.
What is that old saying?...........
A people hire A people....... but B people only hire C people.
Well, the Customer Managers certainly fit into the B people category.
Solutions
1. Give the Customer Managers a territory/portfolio of customers. This will give them something to do. If not, then just fire them all and save the company £1m per year.
2. Reduce the range of products. Why? Well, if you want a small size of mustard you go to the local supermarket or corner shop. Makro is for catering customers and businesses, people.
3. Make sure that there is a minimum order for delivered foodservice. It is common sense that a the company will make a loss delivering orders of £60......make a minimum order of at least £200 or just be a cash and carry customer.
4. Actually allow the sales team to feedback negative things....and then act on them.
5. When recruiting, give people some basic intelligence tests on basic logic and IT skills. Then go further and test their EQ. I really believe that some of the Customer Managers were autistic.
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GRO50920 | 10 Jun 2011 22:58
Customer Managers are obsolete, I agree. All they do is:
1. Invent and lie about company procedure to their sales team (for example they pretend that Head Office have specified which plastic folders are to be used and discipline you for not carrying a 4 hole paper punch in the car!)
2. They micro-manage and practice excessive monitoring (they follow you on calls and constantly try to catch you out.)
3. Treat the adult sales team like little children because they themselves are immature.
4. Ask for every call report/visit to be reported in 6 different ways.
5. Make customer service a farce when they go up to a customer with an obsequious rictus grin.
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Mr.S.Artois | 11 Jun 2011 9:57
I don't usually comment on these news articles, but ......
It dismays me that the commentary so far consists exclusively of employees/ex-employees who are so caught-up in their own sales/field force politics and name calling, that they believe that the removal of the CRM role will resolve Makro UK's problems. It's off-the-wall!
If Alixpartners wish to turn this business around, they need to resolve 15/20+ year old structural and strategic problems. Some of which, I'm sad to say, were exacerbated during Mr Flotto's tenure.
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GRO48856 | 11 Jun 2011 12:26
Thank god some one has made a start at sorting the top heavy mananagement mess.........Directors will have had a nice £££goodbye£££..........I agree with almost all my fellow commentators have said..........Pleae God sort out HQ ........and all the myriads of people justifying their existence.........BUT more importantly........middle managers and store Managers..............the home delivery service is a joke.............................................................And so few troops left on the ground.........10 minutes before someone opens up the cigarette lock up............20 mins going through a till........... I wonder why people do not use Makro anymore
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GRO50929 | 11 Jun 2011 13:00
Hello, what an interesting comments board. I must say that I agree with all four previous posters.
Makro does have underlying problems from over the last 20 years.
I just haven't been here long enough to comment with enough knowledge of the changes that have happened in the past.
But I must say that some of the new staregies are just not working too.
We are told that our selling point is that we are a one-stop-shop. Our customers don't care. They prefer to get many deliveries from many different suppliers who specialise in meat or fruit/veg.
I am currently employed with Makro as a customer consultant.
I have been here for just under a year now, and I am actively looking for another job.
It is true that the customer managers do not have a lot to do. I hate to say this because I am good terms with mine. As a person she is nice. However, my colleagues in a few stores all agree...what is the point of them?
On a side note...I have tried a couple of times to post on here so I apologise if this is repeated many times.
Thankyou for reading.
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Alice Brown | 11 Jun 2011 13:13
I have worked here for a number of years. I am a current employee not an ex-employee.
I agree that the first couple of posters have come across as too personal, but they make some good points.
Obviously the third poster is a CRM.
To the third poster...could you please expand and explain what you see as the problems over the last 20 years, and please comment on any ways you would have done things differently, instead of being vague.
Are you another CRM who has nothing to do but micromanage?
What do you think your team thinks of you?
I see nothing but managers justifying their existence as per the 4th posters.
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GRO50931 | 11 Jun 2011 13:53
hehehehe...what a funny board.
the second post is very funny....i can guess four stores which that may be about.
1. Queue's too long.
2. Prices too high.
3. Too many manager's.
4. Not enough floor staff.
5. Not allowed to give negative feedback.
6. CM's having meetings about meetings about meetings...and then a meeting to discuss the outcome of the last meeting.
7. Foodservice has no focus.
8. Very talented people recruited and then leaving immediately.
I did like that comment about A people recruit A people and B people recruit C people.
That is very true at Makro.
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Saturday | 11 Jun 2011 14:21
Never believe everything your read in this piece of shit rag, most of what is written above is wrong. Their are glaring errors through out this article.
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Mr.S.Artois | 11 Jun 2011 14:21
I am the third poster. I'm afraid that I am not, and never have been, a CRM.
I have, however, held various positions throughout the organisation and I've been around long enough to remember Makro UK as a profitable company.
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Saturday | 11 Jun 2011 14:56
For the actual true story see here -
http://menmedia.co.uk/manchestereveningnews/news/business/s/1423401_makro-directors-depart-after-clash-over-strategy
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