Explore the challenges faced by a Brazilian company in the commercial vehicle market, as it navigates through a crisis without recognizing early signals. Learn how strategic intervention, process reevaluation, and a proactive approach to succession planning are crucial for survival.

The case study serves as a valuable lesson in crisis management and the importance of recognizing early warning signs. From inefficient production practices to the need for succession planning, the blog highlights the multifaceted approach required to navigate a crisis successfully. Companies are urged to learn from this example and prioritize transparency, optimized administration, and strategic planning to ensure long-term prosperity.

In Brazil, a reorganization is the optimization of fiscal, managerial or organizational conditions within a company. Turnaround is part of restructuring and not reorganization or transformation. This distinction is generally valid in Brazil and is based on the delimitations of the North American economic area. This may sometimes sound confusing with regard to the German-speaking economic area, since in this region there is usually no real distinction between reorganization and restructuring.

Sometimes radical change is needed. Companies are subject to dynamic change and this also affects management. The art of leadership, especially in reorganization and restructuring phases, lies in not just looking at a small window of time. Whether growth, crisis or restructuring - no phase is permanent, not even if the right things are done at the right moment.

In this article, however, we will look at the issue from a more fundamental perspective.

In 2012, the economic situation in Brazil was still largely unproblematic. The country had the longest phase of an economic and social upswing in democratic times behind it. The financial crisis of 2008-2010 had been overcome extremely well, without really causing major upheavals. A new sociological- economic middle class had emerged in the context of the emerging global economies.

Starting in 2014, Brazil's situation deteriorated rapidly and an economic downturn occurred, which has not really stopped until today.

After one year, growth of over 25% was achieved at the beginning of 2017 and profits increased by 100% compared to the previous year. The installed simple financial control system improved efficiency and cash flow in the small local coffee store chain. All installed coffeeshops were back in the blue zone.

How dangerous can paradigms be in a crisis?

Can an industry-wide paradigm lead to business blindness? Under what conditions has a paradigm developed?

If you think about costs too late, you ruin your company. Those who always think about costs too early kill creativity. Cost-cutting measures must be taken when you are earning a lot of money. Once you're in the red, it's too late. Many years of experience can sometimes narrow the view. There are people who think they know the bird very well because they have seen the egg from which it crawled out.

Sometimes you have to pull out trees to see if the root is still there. After many years of the paradigm of uncompromising outsourcing of all functions, we realize after many projects that this way has to be decided anew in every case and has to be checked at regular intervals for its still existing advantages. Paradigms must not be retained for convenience.