During that initial period, a CEO is on display and has the attention of the company, a situation that can work to his detriment or to his advantage. Let things drag on without taking decisive action, and you lose the opportunity to imprint on the organization a clear and long-lasting message.
So Radke wasted little time after he became CEO of $1.2 billion USFilter Corp. which will be operating in name as well as function as Siemens Water Technologies by the end of this year to let the corporation know what his intentions were and how he planned to carry them out.
“When you come into a job as the new guy on the block, everybody’s looking at you,” says Radke. “Nobody knows you. Everything you say and whatever you do is going to be noticed, so I better make sure that everything that is being noticed about me is something that I’d like to portray.
“You’d better use it wisely, the notion that you’re on display. An executive is never as effective as he is in the first three months or so because the organization is sort of unstable ... so you can be very swift with your actions when you know what to do.”
Radke, who was president of the hearing aid instruments division of Siemens AG, joined USFilter as its COO after it was acquired by the German company in August 2004, and within a few months was named its CEO.
Siemens sorted through a list of about 500 acquisition targets, narrowed the roster to about five and ultimately bought USFilter, a company strong in water filtration and treatment technologies, for $993 million, an acquisition that complemented its own strengths in automation and control systems for water treatment applications.
Radke got the task of weaving together USFilter, which essentially had served the North American market, and Siemens Water Technologies, a company with limited capabilities in water treatment that Radke described as “too large to die and too small to live.”
Siemens had a global brand and strong technologies across a wide variety of businesses that it could leverage to take the USFilter business worldwide. It was up to Radke to find a way to make everything work.
Building his team
For Radke, the critical elements for the integration of USFilter into Siemens were to get the right people in place, build a culture of performance and move the company quickly onto the global market.
“When I arrived here, I knew my very first task was to figure out who were the top three to five individuals I could really entrust to build jointly with me the future of Siemens Water Technologies,” says Radke. “This is the first thing you’ve got to do, figure out who’s on the bus and who’s off the bus and build a strong management team at the beginning. When you have that, then you set an example to the rest of the organization, and everyone is marching to the same drum. This is the core task you have to do in your first 100 days put together your new management team.”
Radke formed his team from a mix of USFilter and Siemens veterans. Siemens vets filled the positions of CFO and of executives heading up operations and human resources, with USFilter personnel rounding out the ranks. Radke took an almost intuitive approach to picking his team, getting to know the USFilter management members by observing them in action and judging how well they would fit the Siemens strategy.
“I’m not fond of all sorts of analysis in that regard, because at the end of the day, you’ve got to know the people, you’ve got to really figure out in conversations and by watching the people in action if they have both the devotion and the capabilities,” says Radke. “Then you figure out that some people have that sort of edge and some people don’t.”
Radke says in one instance, a USFilter executive had to be cut loose, not because he lacked technical skill, but because he didn’t have the commitment to the global strategy that Siemens envisioned and that Radke thought was necessary to carry it out.
“It was really obvious that this gentleman and I just didn’t get along in this regard, and at one point, he was replaced by another person who not only has the capabilities but clearly sees the value of having high double-digit growth in the international markets,” says Radke. “Not only that, (he) puts the right things in place, the right systems, the right people to carry out that goal. At the end, you have to have a few people at the top of the organization who understand that and will go the extra mile to do that.”
Radke didn’t squander any time getting the business onto the global stage. He hired a new executive to run Siemens Water Technologies’ venture in China, a market for water treatment that is growing at approximately 15 percent annually.
With USFilter’s capabilities in treating municipal and commercial wastewater and Siemens’ already considerable presence there, the opportunities in China are considerable. Not surprisingly, the results have been substantial for USFilter, with 2005 revenue from its China operations doubling over the prior year.
Overall internationally, the company has increased its revenue by 50 percent. And even in the United States, traditionally USFilter’s strongest market, where overall market growth is around 5 percent annually, its growth is in double digits.
Radke moved to shed low-performing business units that weren’t aligned with the Siemens strategy and acquired others that rounded out its offerings globally. Both in the United States and the international markets, the acquisition strategy is to give the business a jumpstart position in attractive countries or to close gaps in its water treatment portfolio.
“We figured out after a few months that there were a few pockets in the organization where we have what one of us calls ‘low calorie businesses,’ where we turn over but don’t really make money,” says Radke.
Out, for example, went a sludge screw conveyor line, while in came an odor control business and a company that provides water treatment solutions and services for the oil and gas industry.
Radke has leveraged technology Siemens developed for other business units to bring efficiencies to USFilter. One thing USFilter has done well in the past is provide service to its customers’ installations in the field, working from about 130 field offices, 100 of them service centers spread out across North America.
Radke has deemed services as a segment that can bring a valuable repeating revenue stream and offer substantial profits to the company. By applying wireless dispatching technology developed by Siemens for its health care and medical businesses, USFilter was able to establish a central dispatching system that allowed it to eliminate several call centers, thus streamlining their function.
“There is a valuable position for services, but we can do it even better by using best practices in Siemens to ... manage such a network in an even more sophisticated way than we have done in the past,” says Radke. “This is where experience from other Siemens businesses can be used in a very effective way.”
One week a quarter, Radke tours USFilter locations, sometimes visiting two or three a day, where he communicates a review of business activities and lays out his goals for the company and for each location. Underlying Radke’s approach is an expectation of performance and accountability for everyone in the organization.
He exercises tight control over costs, which he says can easily spin out of control and chew up profits when growth is in high gear. And when business units don’t meet their goals, he demands answers and doesn’t accept excuses.
“At the end of the day, you just have to understand that we all have certain targets, that they are ambitious but reasonable and doable,” says Radke.
Radke keeps a close eye on the key deliverables by quarter, country and manager, and relentlessly measures everything. And that kind of bottom-line approach to performance is all that’s required to keep any business growing and profitable, he says.
“When you do that, people are on their toes, and then you’ve got a performance culture, and this is all you need,” says Radke.
How to reach: USFilter Corp., www.usfilter.com