test
02/08/2019

Enjoying a steak and salad dish with management consultant Kerkhoff, who puts his clients in the driving seat

Did you think management consultants only had offices and conference rooms on site? Stylish indeed - but can it be replicated? I asked myself the same question. That is, until I arrived at Kerkhoff Group, based in the city of Düsseldorf. I’d been invited by Gerd Kerkhoff to a business lunch - directly opposite the Ständehaus at the Kaiserteich on Elisabethstrasse. Much of what was on view was far more fascinating than the plate of steak and salad that Kerkhoff had organized - so much so that I forgot to photograph the plate as usual.

That's why I am showing more and different pictures this time. Our tour through the cave-like passages in the premises led us first to a room resembling an aeroplane cockpit.. This is where the Essen native prefers to bring his customers - above all the customers to be. They are used to visiting offices without any stand-out features when attending other consultations and presentations. Which is why people tend to remember Gerd Kerkhoff and the aeroplane ambience they enjoyed at his place, over and above his competitors. Then, when it comes to finally deciding who gets the job. He’s probably not wrong, either.

“I am Mr. Middle Class.”

“We target the middle class and that’s precisely what I personify, said Kerkhoff during the underground stroll. His management consultancy previously specialized in purchasing companies.  He analysed his customer's needs, made tenders for the suppliers and then negotiated with them. His radar also extended to checking out existing supply contracts: When he managed to elicit improvements, "these were in the order of three to four million euros at times". So Kerkhoff works on a performance-based fee basis.

“It’s a false dawn.”

There was only one downer: Within two to four years, this advantage had already come and gone for his customers. Because the supplier already started hiking the price just six months later. And so on and so on. By then, however, the companies had affiliated with the cheapest supplier and when he demanded more money, they could no longer escape so quickly. So price escalation clauses were agreed accordingly, the cost drivers jointly identified, and a new price settled. And so it continued. It was a bit like a game of ‘tortoise and hare’. And after some years, it became clear: Over time, trying to save money when you shop inevitably leads to a ‘false economy’. He came to this realization around a decade ago. Meanwhile, Kerkhoff has emerged as a group with a whole circle of managing directors and partners and about 100 employees, plus ten different divisions, from production cost optimization to personnel consulting. Among its customers are well-known names like Coppenrath & Wiese, Warsteiner, Leifheit or Voith.

First get down to basics and do the calculations yourself

What tasks remain to be done? For example, if you have an estate agent wanting to order windows or lifts for all its thousands of rental apartments. When quoting for such projects, Kerkhoff's people first get down to the nuts and bolts, then determine the prices on the basis of all individual components. He has his own databases for the procedure and can ultimately trace the actual production costs, explains Kerkhoff. Plastics, raw materials or chemical components are all recorded and their daily prices can be retrieved. The purchasing consultant can then cite this as a pricing argument when engaging producers in negotiations. The hit rate for the true price is 95 to 98 percent, says the entrepreneur.

A people-centric lift for property groups

Another appealing example: Recently, Gerd Kerkhoff had a whole elevator dismantled into its constituent parts, then calculated the price. What the property group wanted to know was this: Can you build a people-centric lift? With a drive system from Switzerland and perhaps using less expensive parts from Poland or the Ukraine? Yes you can, he replied.

A ‘clean desk’ philosophy is the prevailing concept in his experimental workshop

The only way it differs from a real workshop: everything is clean and super tidy. Lacking atmosphere... There's no planing here, no fallen wood shavings. Not as far as I noticed, when walking around. But the management consultancy shows no less commitment. Clean desk philosophy as with a bank itself within the catacombs; even in a workshop. A real working atmosphere, like the kind you get in a painter’s studio, is lacking.

The next rooms I get to see on the tour are used for in-house testing of employees - but also for training days for the customer's employees. A place where you see the entire production reproduced. If employees report that their sieves are faulty in the preliminary interview, sieves that are not working will be used, says Kerkhoff. This is how you bring out the real inefficiencies.

Or as a training camp: For example, if a beverage producer wants to roll out new production processes. That’s when you have 150 employees checking in at Elisabethstrasse for a training.

Author: Claudia Tödtmann, WirtschaftsWoche Management-Blog

Link to article