The CEO of Siemens on Using a Scandal to Drive Change

With Siemens reeling amid a global bribery investigation, its board hired Peter Löscher as the first outsider to become the company’s top leader. Here’s how he quickly moved to rebuild the organization…

It’s not so much the uniqueness of your strategy that matters nowadays—it’s the strength of your execution. How can you adapt continually to the changing world we are in right now? Siemens needed to execute more rapidly, and to do that we had to take a hard look at both our organizational structure and whether we had the right people in the right jobs. Within months of my taking over, we replaced about 80% of the top level of executives, 70% of the next level down, and 40% of the level below that. I fundamentally changed how our managing board made decisions. We also worked to streamline and simplify our global operating units.

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