FLIPPING THE SWITCH ON TRANSFORMATION

Hager Group, an independent, family-owned company founded in 1955 by the father and uncle of current

CEO Daniel Hager, has grown steadily since its inception,

growing organically as well as acquiring other manufacturers

of electrical and related systems used in residential, commer-

cial, and industrial buildings.

The acquisitions have averaged about one a year over a 20-

year period. While each newly acquired

business added to the company’s bot-

tom line (as a privately held company,

Hager Group isn’t required to divulge

its financial results), it also meant the

corporation was continuing to add dis-

parate brands and organizations, all with

their different sales teams, different ad-

ministrative executives, and different

ways of conducting business.

By the time Daniel Hager became

part of the company’s management in the middle of the last

decade, Hager Group — based in Blieskastel, Germany —

had grown to two-dozen different brands, often operating

with the same customer base through the same sales channel.

As a result, customers viewed Hager Group as a product

specialist company rather than offering a broad portfolio. Cus-

tomers would often buy one product from Hager, but might

BY PHIL BRITT

For Daniel Hager, CEO of Hager Group — a worldwide leader in electrical engineering — transforming his company’s business model was a highly charged experience.

BLOOD, SWEAT & TEARS

buy a related product from a competitor. To advance to the

next level, in which the customer would turn to Hager Group

for full solutions like an energy distribution system rather than

for individual component(s) of the system, Hager Group had

to change its focus from a product focus to a solution focus —

a major transformation in the way the company historically

conducted business, Daniel Hager says.

IMPROVED VALUE PROPOSITION

In 2006, Hager developed a transfor-

mational strategy — one that focused on

branding — that the company began ex-

ecuting in 2008.

“It was a dramatic change in our infra-

structure,” Hager recalls. “With 24 brands,

you’re not able to convince the mind of the

customer what your value proposition is.”

The transformation from a product-

based company to a solutions-based com-

pany necessitated that Hager Group re-

design their marketing and organize their

internal structure differently to deliver

these promised solutions. Hager knew that

his future, as well as that of the company as

a whole, relied on the successful transfor-

mation of the company from a brand focus

to a solutions company.

“We needed to break barriers, which we

hadn’t done in the past. You cannot have

different silos from a solutions perspective; so we started melt-

ing down the barriers between internal groups,” Hager says.

“Taking out the different brands and focusing on one brand

with one value proposition enabled us also to focus on one

solution to meet the market needs and forget about what we

might lose emotionally.”

It also meant a long-term focus on the company’s strategy

and direction according to Hager. “The most critical issue was

to determine where we were headed in the future.”

“This holistic approach to transforming the Hager value

proposition is the key to their success,” says Katerin Le Fol-

calvez, Insigniam partner. “Too often we see companies at-

tempt to transform their brand-model without reconstituting

their organization to be a match for

the new proposition. A brand-model

transformation is a total enterprise

transformation and Daniel Hager and

his team understood that.”

His uncle and father had turned

over control of the company to a non-

family CEO in 1988, a person Hager

had to convince of the new direction

for the company.

If his presentation or the execution

of it failed, he might not have ascend-

ed to the CEO position, he may have

been out of the company entirely. He

needed the support of the CEO and of

other key personnel in order to move

forward with his planned strategy.

“I had to ensure that I was showing

the commitment needed. The cred-

ibility of the organization was at stake,”

Hager says. “It was a difficult time for

me and those I convinced to follow

me. We didn’t know what to expect from the present CEO.

He had his own way of functioning. We had to convince the

CEO and other key people that this was the right way of

moving forward.”

Hager started with a group of 10 core people to launch

his vision, and brought others on board through “a lot of

“TOO OFTEN WE SEE COMPANIES ATTEMPT TO TRANSFORM THEIR BRAND-MODEL WITHOUT RECONSTITUTING THEIR ORGANIZATION TO BE A MATCH FOR THE NEW PROPOSITION.” — KATERIN LE FOLCALVEZ, INSIGNIAM PARTNER

TIMELINE

1955Hager Group is founded.

1962Develops new logo and corporate identity.

1969Rotary Fuse carrier is invented.

1974 Launches the first modular system on the French market.

BLOOD, SWEAT & TEARS

one-on-one discussions.”

From the time the change in direction was envisioned in

2006 to the launch in 2008, there were large commitments in

time, with numerous two-day working sessions.

From the initial group of 10, Hager

developed a leadership committee of 30

to drive the transformation and the di-

rection of the brands. “Herein is another

critical success factor,” says Insigniam

partner, Marie-Caroline Chauvet. “Dan-

iel and the top leadership also took on

reinventing themselves as leaders in order

to be effective in executing on the new

model. That took courage and wisdom.

In turn, this led to a transformation of the

Hager culture.”

Rather than the top-down manage-

ment style of the past, the new strategy

also relied on a collaborative management

style, with more input from managers and

employees not in the C-Suite.

“It’s something that our people

weren’t used to … we were creating a

space where we could discuss and build the future together,”

says Hager, who admits, in hindsight, that implementing the

change in strategies was a more daunting challenge than he

had initially envisioned. “There were a lot of dragons to fight.”

Though there was some hesitation among a few of the

company managers and employees, there wasn’t a forklift

change in terms of personnel. Most who didn’t embrace

the new direction of the company immediately did so

over time.

“Some left because they didn’t want to cope with the new

culture,” Hager says, though he let time (people retiring, leav-

ing the company for promotions, etc.) handle the majority of

the personnel shift.

“One of the key success factors of this transformation was

Daniel Hager’s determination to build on the company’s in-

credible cultural assets rather than change

everything,” says Chauvet. “The branding

transformation became a way to express

Hager’s commitments to all of its stake-

holders in a very clear and tangible way.”

Rather than 24 different brands, the

Hager brand today consists of products

ranging from energy distribution through

cable management and wiring accessories

to building automation and security sys-

tems. Other brands of the Hager Group

are Berker, Daitem, Diagral, Efen, and

Elcom. These have a clear value proposi-

tion to defined customers and through

defined sales channels; different from that

of the Hager brand.

“Some of the brands now are bigger

than they ever were before,” Hager says.

The company’s solid growth has contin-

ued as well, something that Hager doubts would have been

as strong without the transformation in focus.

LOOKING AHEAD

Though the focus on solutions rather than products “is now

part of our culture,” according to Hager, the transformation

is continuing. Such a change was much more involved than

Hager envisioned when he first proposed it. But it also set the

tone for the next transformation for the company, which he

also expects to lead.

Hager Group will soon develop its 2020 strategy, termed

1982Industrialization of the first residual current circuit breaker.

1988Begins manufacturing 6 and 10kA MBCs.

1991ISO 9001 certification.

TIMELINE CONTINUED

“DANIEL AND THE TOP LEADERSHIP ALSO TOOK ON REINVENTING THEMSELVES AS LEADERS IN ORDER TO BE EFFECTIVE IN EXECUTING ON THE NEW MODEL.”

— MARIE-CAROLINE CHAUVET, INSIGNIAM PARTNER

Project 2020, which will focus on expansions beyond Eu-

rope to become a truly global organization, as well as further

growth into the servicing of residential, commercial, and in-

dustrial building systems.

Hager also expects to further refine the company’s focus

to be solutions-driven, with different systems controlled on

a common platform — such as through mobile technologies

— and he seeks to position Hager Group in the thick of the

B2B portion of that market. And he’s prepped and ready to

meet a few more dragons along the way.

FROM THE INITIAL GROUP OF 10, HAGER DEVELOPED A LEADERSHIP COMMITTEE OF 30 TO DRIVE THE TRANSFORMATION AND THE DIRECTION OF THE BRANDS.

1997Launch of the Quadro series.

2004Acquisition of Atral in France.

2006Hager develops a transformational strategy, one focused on branding.

2008Hager begins implementing its transformational branding strategy.