Strategic realignment and internationalization
Industry: Civil engineering office as an innovative overall planner for commerce, industry, health care facilities and life science.
Challenges: Strategic realignment and increase in sales after family succession
Project: Strategic realignment and business development support
Results: 3 new business areas generate sales, international projects acquired
Company: Lorenz Consult ZT GmbH, Graz
Contact person: DI Christian Lorenz, Managing Director
The civil engineering office Lorenz-Consult is managed in Graz by DI Christian Lorenz in the 2nd generation. After a 2-year reorganization phase, the management realigned the company’s external appearance and positioning in 2015 together with konsultori. DI Lorenz was continuously accompanied in business development and international expansion efforts. How the strategy shift worked and what actions we took, you can read in the following long version of the interview that Petra Wolkenstein conducted with DI Christian Lorenz in February 2018.
DI Christian Lorenz in the interview
“Even my father expanded from the beginning and realized that static alone was not enough as a business.”
„My father founded Lorenz-Consult in Graz in 1972, when he started working in structural engineering as a trained structural engineer. It became clear to him during a lecture that the sole proprietor model would not pay off in structural engineering. So he expanded the business and added construction supervision and then later general planning. He took these first steps to expand the business in the 80s, fairly soon after founding it. A short time later, he added the healthcare division to general planning.”
“Running Lorenz-Consult in the 2nd generation was not something I had actually planned. However, switching from mechanical engineering to construction has opened a new door for us.”
“After my brother joined my father’s company in 1998 and both he and my sister studied civil engineering, I never thought I would take over the company one day. With my education in mechanical engineering and business (focusing on manufacturing production technology and logistics), I was doing well in the automotive industry at Magna and Steyr Daimler Puch. Nevertheless, my father wanted me to join the company in 2000, because I was able to cover building services engineering as a new business field for Lorenz-Consult through my studies. Civil engineers are only allowed to practice what they have studied, and through my training in heating and ventilation technology in mechanical engineering, I was able to contribute a new field of business. Actually, I had hesitated to take the plunge, but my first boss said, “If I’d had a father with a company, I would have jumped right in.” I took that to heart.”
Step-by-step business succession with transition phase
“My brother then left and started his own company, my father didn’t want to retire yet. So I had time to take over the company in peace, in the end 10 years from 2005 to 2015. Then he really started to let go nice and slowly, because he had confidence. In the transition phase, we managed the company together with all the pros and cons, but I had 50% under my own management (construction supervision and building services). We did the acquisition together, which was already an advantage.”
“Reorganization before new strategy was necessary.”
“In the meantime, we had grown to 40 employees and a patriarchal management style like my father’s was no longer possible with a management span of 1:40. I’m more of a team person than he was, I don’t want to work day and night and I need a sparring partner and I know that I don’t know everything. With a colleague and friend, we have redeveloped the organization loosely based on Peter Senge’s “The 5th Discipline” and brought in a little self-organization. Teams choose their own spokespeople and we’re working toward a self-learning organization.”
Strategic impasses and the search for new focal points
“We have always had a focus in technology and IT equipment, for example we were the first major reference customer in Europe for Auto-CAD. We then became a development partner and today we are the technology leader in BIM. Nevertheless, what always bothered me about the company was that we didn’t know where we were going as a whole and where the innovation was coming from. In the past, we also took one or two strategic dead ends with us, for example, the topic of timber construction, which we would have liked to strengthen alongside steel and concrete construction. Architects like to work with wood, but they do it directly with the wood industry and there is little room with standardization for a design office. We also used to do very well in bridge construction, but if you don’t keep at it and have ongoing projects, then the references and competence are gone and you can no longer connect with public clients. That doesn’t happen to us anymore. There are also gaps in orders in the healthcare sector. We stay on today with smaller projects to have the references.”
“My job as CEO is to land new business. At some point in 2015, more focus had to come into the strategic direction and I was looking for new business. Because we were previously focused on industrial, steel and plant engineering, we had concentrated sales on one major customer as a cash cow. But in steel and plant engineering, business was declining worldwide. Orders slumped. So we were forced to look for new areas of business and make better use of our existing network of contacts. The question was: how do I get better access to new markets?”
From 2015 onwards, the focus was on the future: methodically opening up new business areas and bringing Lorenz-Consult into strategic realignment
“We started working with Petra Wolkenstein from konsultori in 2015 and it just worked. We looked through the belly-load of competencies and set the focus on 3 core competencies that are still relevant after three years. Then we sorted through the business areas and identified those that fit the competencies and had potential globally. The most potential for us was in pharmaceutical and cleanroom technology. In addition, there was the hygiene issue in food production and, as future potential in the further distance, microchip production. We kept the healthcare sector and industrial and steel construction with high competence and little market, but we then wanted to tackle the new subject areas together as a result of the strategy talks.”
“Once the strategic realignment was implemented, the work really started.”
“I first started the joint implementation alone and after 4 months it was clear that we would not be able to do it without internal marketing assistance. We have aligned the homepage with our core competencies and relaunched it. Now you can see in 5 seconds what we are good at. Then we opened up new customer acquisition channels per target segment, identified cooperation partners and started working massively with each one. The contacts with the selected associations and networks resulted in joint trade show appearances and lectures that we give. In this way, we continue to build our expert status, which we communicate more actively via content marketing and newsletters.”
“Generating new business with the strategic business development approach worked out great.”
“When I look back today and consider what business we generated from the approach of network – cooperation partner – presentations, it worked out extremely well. We entered the high-end segment of cleanroom technology (bio-safety) with a cooperation partner. Because of the new strategic focus, we were very attentive and I just took opportunities better because we said “no” to other things. Putting focus absolutely does the trick.”
“We have set our sights on niches that others in Europe struggle to cover in the same way. That has done a lot to us. We also got a project like that in the food production area. Through the cleanroom area, we have now also managed to acquire a micro-chip project. At the beginning, we had defined this as a distant future. That then happened to us via the cooperation network, because that’s exactly where the attention was.”
“The focus and the active cooperation work have already made a lot of difference: The inquiries are increasing strongly and I consciously decide strategically which projects are good for us and fit into the strategy and which do not. Pharma, food and cleanroom technology have really proven to be an excellent market to complement our traditional business. That’s where the business is coming from now, and it doesn’t get any nicer than that. In addition, you have to have insane know-how to be able to plan projects here. That’s a big barrier to entry for competitors.”
Next step: International expansion
“Through cooperation partners and lectures, as well as PR, which we have started, a radiance has now developed beyond the borders in our target industries. In Germany, we are now doing projects and have opened an office. Now we are looking at Italy and Slovenia as new markets.”
“The nice outside pressure and commitment keeps us on track”.
We work together once a month and the monthly rhythm is great. We simply can’t do more, but I always have the external deadline and I want to deliver something, so we work towards that and keep an eye on whether we’ve done everything we discussed, how we’ve progressed, where we’re at and what we can add. To discuss the status through and to have the project management externally in addition to the strategic competence forces us to continuously stay on the ball and strengthens our own commitment. The nice pressure from outside is already good and because it costs money, we don’t let it get lost in the day-to-day business. I afford to do that, to review my strategic direction monthly and keep the focus.”
“What helps us especially, of course, is knowing the process. We work step by step, and only when we’re ready in terms of implementation do we add the next measure. I’ve never heard from you, “Is that not done again?” We look together at what we can create and it doesn’t overwhelm us.”
“Konsultori brings the experience from other projects as well, and with a specialization in innovative SMBs and scaling startups, you’re just right for us. I was looking for a “trusted advisor” who would go with me at my pace and not just sell a consulting package. That’s what sets you apart, and I appreciate the fact that I can come up with any topic, but you don’t automatically say, “I’ll do that, too. You bring in expertise from the network on a selective basis, and that works extremely well. Konsultori’s network has a power even apart from the startup scene to dock on technology topics.”
“And then the support in the implementation is worth a lot: how do I really do a direct approach now, what do we do with the newsletter, how do I deal with a network and what specifically do I want to get out of it, what can I do more with a certain cooperation partner? We have help for self-help there.”
“My father was always very critical. He has also had our business development and marketing issues put up as costs internally. But he says nothing, because the investment has more than paid off. We have proved it and succeeded. That also makes us confident to continue like this.”
What advice do you have for entrepreneurs your size who are a little stuck revenue-wise?
- Don’t stress about the competition: You told me the phrase that is important in relation to the competition: “My customers are not your customers and vice versa”. Every company is unique and so are the ways to address the right customers.
- Follow your intuition: Your own gut feeling already works very well. You have to let me go with it and then really good things come.
- Closing the belly store: Clean out and go out with only 3 core competencies and stay with it for a long time so you see the impact.
- Strategic business development: Look for 3 good channels and do it methodically and not half-heartedly.
About DI Christian Lorenz
What do you wish for the future in terms of business?
“A decent workload in all segments and further collection of the fruits of our labor. The quiver is well filled. If we continue to implement well internationally, then I’ll really have fun – I love languages and working internationally. For our team, I wish that the organization works well “from the bottom up” so that all employees can have more serenity in everyday life.”
Thank you very much for the open conversation and all the best to the whole team.
With kind permission of DI Christian Lorenz.