Roland Berger Strategy Consultants: Partners elect Global Executive Committee and Supervisory Board – Part 2: Background/company history
- Roland Berger's departure from the Supervisory Board and his election to Honorary Chairman is the logical conclusion of a long-planned transition
- The firm's founder began initiating the transformation of his company as far back as the 1990s
- Burkhard Schwenker's election to Chairman of the Executive Committee (EC) in 2003 laid the foundation for succession
- Successful transition from founder-led "one-man show" to genuine partnership
Munich, June 30, 2010
The departure of company founder Prof. Dr. h.c. Roland Berger from the Supervisory Board of Roland Berger Strategy Consultants and his election as Honorary Chairman of the company is the successful conclusion of a transformation process that was initiated more than 15 years ago. Beginning in the mid-1990s, Roland Berger, with support from Burkhard Schwenker, began preparing to buy back the shares that Deutsche Bank held in Roland Berger Strategy Consulting (management buyout) and to transfer all shares to the firm's Partners. In parallel, a five-member Management Committee was formed, with Roland Berger as CEO. The management buyout was completed in 1998, significantly increasing the value of the Partner shares. At the same time, Roland Berger reduced his voting rights to the same level as the other Partners, with one vote each. He also introduced the Executive Committee (EC), of which he remained the CEO, the Supervisory Board and a Management Committee Germany, thus transferring further management responsibility to the Partners. In 2003, Berger took the next step by handing over the strategic and operational management of the company to the EC and its spokesperson Burkhard Schwenker, and assuming the chairmanship of the Supervisory Board. The two-tier management structure composed of the EC and Supervisory Board, both of which were elected by the Partners, proved to be very effective and saw the company grow to become the only strategy consultancy of European origin among the global top 5. The recent election of Dr. Martin Wittig as the new CEO and Prof. Burkhard Schwenker as the new Chairman of the Supervisory Board ("Chairman") is the logical conclusion of the foresighted planning for a structural transition and change of generation.
In his late 20s, Roland Berger founded a consultancy in 1967/1968. Initially a one-man, one-secretary operation, it quickly grew into an increasingly internationally oriented management consultancy with a partnership structure. In 1970 – just three years after its founding – the company was already generating revenues of DEM 5.6 million (EUR 2.86 million). In 1980, revenues had grown to DEM 35 million (EUR 17.9 million). In 1990, the figure was DEM 175 million (around EUR 90 million), and in 2000 – also due to German reunification and the New Economy – Roland Berger Strategy Consultants generated DEM 847 million (around EUR 433 million). In 2002, the final year of Roland Berger's operational leadership, the revenues of the world's leading strategy consultancy of European origin reached EUR 526 million, or DEM 1,028 billion, catapulting the firm over the one-billion mark for the first time in the old German currency. Today, revenues total well over EUR 600 million.
In 1988, Deutsche Bank, a long-time client of Roland Berger's, acquired, under Alfred Herrhausen, 75.1 percent in Berger's limited liability company. Berger – then in his early 50s – retained the remaining shares and secured the majority vote for himself. Berger explains his reasoning for taking this step as follows: "The prospect of exercising my profession in yet another dimension, of conducting a major international orchestra, really appealed to me." However, due to the murder of Alfred Herrhausen in 1989, the jointly planned strategy, being based primarily on his personal relationship with Roland Berger, fell through. Deutsche Bank still retained its shares, but limited its role to that of a silent partner. However, pursuant to the US Bank Holding Act, the bank's holdings prevented Roland Berger from entering the US market.
Buyout of Deutsche Bank shares a prerequisite for a strong partnership
Beginning in the mid-1990s, Roland Berger initiated a gradual transformation process for the company and its ownership and management structure. The first step was to issue 25 percent of the company's shares to the active Partners and reduce the shares held by Deutsche Bank and company founder Roland Berger. Moreover, a Management Committee was set up with Roland Berger as its CEO and four other Partners as members. In 1998, the Partners finally decided to buy back the Deutsche Bank shares. This was the second step in the transition from a founder- and owner-managed company to an independent firm run by professional Partners. Looking back, Berger says, "For me, the buyout was essential for the creation of a strong partnership to which I could transfer the company." In this move, the firm's namesake reduced his voting rights to the same level as all other Partners.
With the management buyout, Roland Berger Strategy Consultants also introduced a new management structure: the governing Executive Committee comprised, besides Roland Berger as its CEO, Burkhard Schwenker and Karl Vogel, also associate member Paul Goldschmidt. In addition, the Management Committee Germany was created, chaired by Karl Kraus with members Felix Hess and Dirk Reiter. Additional management responsibility was entrusted to the Partner Management Committee (now the Supervisory Board), made up of António Bernardo, Albrecht Crux and Otto Hirschbach – although Roland Berger himself still ran the firm.
2003: First Partner-elected management team
From 1998 to 2003, Roland Berger Strategy Consultants increased its revenues from EUR 292 million to EUR 530 million. In the same period, the number of employees grew from 1,200 to 1,500, and the number of foreign offices rose from 17 to 20. In 2003, Roland Berger – now 65 years old – took the third step toward a Partner-managed company: he transferred full strategic and operational management responsibility to a Partner-elected EC team composed of Burkhard Schwenker (Spokesperson), António Bernardo (Deputy Spokesperson), Thomas Eichelmann and Martin Wittig. A Management Committee DACH, made up of Walter Hagemeier (Chairman), Manfred Reichl and Dirk Reiter assumed operational responsibility for the German-speaking countries (Germany, Austria and Switzerland). At the same time, Roland Berger became Chairman of the Supervisory Board, which was likewise newly elected by the Partners. The three committees took up their work on July 1, 2003. In September 2004, the Management Committee DACH was dissolved and full strategic and operational responsibility transferred to the Global Executive Committee (GEC). Apart from Burkhard Schwenker – at that time officially the CEO – the GEC was composed of António Bernardo as Deputy CEO, Thomas Eichelmann, Vincent Mercier, Dirk Reiter and Martin Wittig as CFO.
The two-tier management structure with members elected by the Partners successfully steered the firm into a phase of further growth and increasing internationalization. It also proved its strength in difficult times, like the bursting of the Internet bubble in the first half of the last decade, and the financial crisis of 2008/09. This brought financial topics to the fore, such as cash management and credit negotiations as well as new partner participation models – giving especially CFO Martin Wittig the opportunity to demonstrate his skills. At the same time, CEO Burkhard Schwenker continued to drive the firm's growth and internationalization: 2008 saw revenues of around EUR 670 million and an increase in headcount to 1,900. Today, Roland Berger Strategy Consultants has 36 offices in 25 countries.
"In view of this success story," says Roland Berger, "the regular elections scheduled for this summer were the ideal time to complete the transition to a new management structure that is now 15 years in the making, and to usher in a new generation. I am certain that my successors will keep the company on course for success. As Honorary Chairman, I will remain available to offer my advice and assistance, and I am looking forward to continued collaboration based on friendship and trust."
Roland Berger Strategy Consultants, founded in 1967, is one of the world's leading strategy consultancies. With 36 offices in 25 countries, the company has successful operations in all major international markets. In 2009, it generated more than EUR 616 million in revenues with 2,000 employees. The strategy consultancy is an independent partnership exclusively owned by about 180 Partners.
For further information, please contact:
Susanne Horstmann
Roland Berger Strategy Consultants
Tel. +49 89 9230-8349, Fax +49 89 9230-8599
www.rolandberger.com