12 March 2007 14:11 [Source: ICIS news]
By Nigel Davis
LONDON (ICIS news)--Linde’s greatest challenge following the BOC acquisition, and as it tries to grow faster than the market, is cultural.
Life at the top of the industrial gases tree is tough and Linde’s solidity in gases and engineering do not stand it in the greatest stead.
Chief executive Wolfgang Reitzle recognises that – and Linde’s significant heritage. It is not simply a question of melding the German and British outlook on everything from corporate governance to employee rights and marketing but of encompassing 40 or so different cultures.
Linde will no longer be typically German, he told journalists at the annual press conference in ?xml:namespace>
The company's senior management executive talks of a neutral, performance culture within which employees understand what is expected of them in financial terms. Reitzle understands, however, that there are hundreds of other aspects that ultimately will have an impact on the way the group performs.
Having come so far with Linde, Reitzle and his board face the toughest of challenges.
Above average growth is expected of the company created last year following Linde’s €8.2bn ($15.6bn) takeover of its British-based rival. Top-line growth of 7% a year is the target.
Linde has sold its not insignificant fork lift truck business Kion and re-named itself The Linde Group. That structural engineering has to be underpinned, however, with the right approach in diverse global markets.
Linde increasingly is bidding for bigger and bigger projects. It needs to develop the right approach in a changing industrial world.
That is why a clean cultural slate offers so much. Linde can’t afford to carry baggage from either its German or British corporate heritage. It has to develop a new view of its own.
Its disciplined approach in executing the BOC deal and the aftermath - the sale of the BOC Edwards vacuum technology and other businesses not related to gases was announced on Monday - have been impressive. Understandably Reitzle talks about “milestones” and making progress.
The on-going business model is neither purely Linde nor purely BOC, Linde executive board member Trevor Burt says. The opportunity to be different was simply not there before.
Linde has the size now to grow above GDP (gross domestic product) and it has the ability to challenge its major rivals in key markets. The industrial gases business, like most others, is not necessarily about global influence but size in selected regional markets.
BOC was more global than Linde and in certain businesses regionally stronger. The new company can learn form that particularly in terms of its marketing effort. A performance culture is not simply driven by the numbers but a variety of other critical elements.
“This merger gives the opportunity to define something news,” Reitzle said on Monday. Increasingly, he will be held to his words.
($1 = €0.76)
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