- New Operating Model strengthens the responsibility of national subsidiaries and replaces METRO Cash & Carry Board with team of Operating Partners
- Decentralisation of operational functions
- Olaf Koch: "Value is created with the customer, and the new model will make us quicker, more streamlined and more dynamic"
METRO Cash & Carry will grant its 26 national subsidiaries more entrepreneurial freedom in the future and has adapted its organisational structure for this purpose. While the national management will be given greater responsibility for operational functions, the headquarters is changing its management structure: in place of the currently nine-person METRO Cash & Carry Board - the so-called Extended Management Board, soon a team of ten Operating Partners will be overseeing two to three countries each, so their day-to-day activities will be focused much more sharply on the respective customers and the local demand. The new organisational structure will be gradually implemented starting on 1 July 2015.
"Value is created locally, in the markets and with the customers, which is why we are now giving a further boost to local responsibility and entrepreneurial freedom," said Olaf Koch, CEO of METRO AG. "We have already decentralised decision-making in recent years, strengthening the role of the national managers. As a next step, we want to achieve an even more powerful structure, with faster decision-making channels and, above all, with national managers who think and act as entrepreneurs, and who will hold considerably more sway in running their business."
An Operating Board will replace the current Extended Management Board of METRO Cash & Carry with the goal of supporting the development of the national markets with a much more operational focus. Heading up this management group as CEO from 1 October 2015 will be Pieter Boone, who has been managing one of the most successful national subsidiaries, METRO Cash & Carry Russia. As reported earlier this week, Olaf Koch, who has acted as CEO of METRO Cash & Carry as well as CEO of the METRO GROUP since 2013, will pass on the ad interim role of METRO Cash & Carry CEO to Pieter Boone in order to focus fully on managing the parent company as CEO of METRO AG.
Olaf Koch said: "We are on the right track. Thanks to the direction we have set and initiatives we have introduced over the last two years, we have now recorded like-for-like growth at METRO Cash & Carry for seven successive quarters. The new Operating Model should accelerate this positive trend. With the new Operating Model, we take a logical step in giving the national Managing Directors greater entrepreneurial freedom. While we still want support from the headquarters, 'one-size-fits-all' central directives are not effective in the local markets. In the future, we will be able to respond to local demand and special customer requirements much more quickly and therefore increase our growth potential."
Essentially, the newly developed Operating Model, which will be implemented within the next 18 months, consists of the following elements:
- The Managing Directors of the national subsidiaries will be granted considerably more entrepreneurial freedom, for example, in marketing or store operations and will work according to a Value Creation Plan. Their performance-related bonus payment will depend solely on the performance of their respective markets.
- An Operating Partner with a small team of experts will support each national Managing Director and their top-level management in the operation and continued development of the local METRO Cash & Carry business.
- Some country divisions will take over the responsibility for certain operational disciplines and will support all other countries in this function ("Federation Model"); for instance, the operational competency for the hotel, restaurant and catering business ("HoReCa") will be given to France; the respective function will thus be moved from the Düsseldorf headquarters to Paris.
- The functions HR, IT / IM and finance will be further managed in Düsseldorf; the responsible Officers are called "Functional Partners"; together with the Operational Partners and the CEO, they represent the highest leadership body of METRO Cash & Carry.
- Strict METRO AG governance functions such as Accounting, Audit, Compliance, Controlling, Legal or Tax will also remain as they are.
Due to the new organisational model, there also will be a reduction in the headcount of the Düsseldorf headquarters as responsibilities will be moved to the countries. This process will be done in close collaboration with the Works Council. However, from an organisation-wide perspective, there will be no job losses.