German industry in crisis: Which mistakes companies must avoid now
Press release from the Frankfurter Neue Presse, March 18, 2025
Emmerthal (ots) – High energy costs, growing bureaucracy, a shortage of skilled workers, unhealthy social security contributions, a weak economy, uncertain supply chains, global challenges and uncertainties, a slowdown in globalization, recession, deindustrialization trends, and market changes at an unprecedented pace – German industry is fighting on all fronts.
Production figures are plummeting, locations are facing serious difficulties, and many companies are struggling to survive. Those who don't act correctly now may perish in the crisis.
"I repeatedly see companies that wait far too long, hoping for improvement, instead of taking proactive countermeasures early on," says Gert Löhmer, crisis manager and corporate management expert. For many management teams, the succession or even overlap of crises and pressures for change has been an extremely challenging time for years. Managing numerous changes in addition to day-to-day business is a mammoth task. A short-term increase in management capacity over a certain period of time is therefore an option.
“Often, a clear plan, management capacity, and the courage to implement necessary changes are lacking.” Gert Löhmer explains below which approach and strategies are required now, how companies can avoid their biggest mistakes, and instead set the course for a secure future.
Request support early and temporarily increase management capacities
Perhaps the biggest insight many entrepreneurs lack is to seek support early on. The earlier the better. Because every day the entrepreneur delays makes the road to recovery longer, more expensive, and more painful. A nice metaphor illustrates this problem: Those who only visit the dentist when they can no longer bear the pain will end up suffering more, and the recovery will be more complex, painful, and protracted.
Experienced interim managers can help during a crisis. This makes it all the more sensible to significantly increase the necessary management capacity for a limited period of time. This can be achieved by engaging an experienced interim manager who ensures the urgently needed rapid implementation of necessary measures. The focus here is on "implementation." A time-consuming and costly analysis is usually unnecessary. In acute phases, a brief assessment by an experienced manager is sufficient to initiate targeted control measures.
Experienced interim managers can help during a crisis. This makes it all the more sensible to significantly increase the necessary management capacity for a limited period of time. This can be achieved by engaging an experienced interim manager who ensures the urgently needed rapid implementation of necessary measures. The focus here is on "implementation." A time-consuming and costly analysis is usually unnecessary. In acute phases, a brief assessment by an experienced manager is sufficient to initiate targeted control measures.
Practical tip:
An important starting point is often to consistently focus on the most profitable products and services. Identify high-margin segments and streamline your portfolio of loss-making offerings. However, if some of your customers rely on certain products, don't abandon them; instead, engage with them immediately. Explain the higher price requirements and work together to find solutions, such as the customer providing a proportion of the material or optimizing purchasing behavior over a longer period. The same applies to suppliers; you can discuss your purchasing behavior or a consignment solution with them to reduce costs and inventory overhead and even shorten delivery times.
Clear leadership in a crisis – communication is key
In uncertain times, decisive, transparent communication with all stakeholders is more important than ever. Many leaders underestimate how much uncertainty and a lack of clarity can paralyze their workforce. Those who hesitate or send contradictory signals lose the trust and motivation of their team. Decision-making processes are different in bad times than in good times. Change and transformation always require a high level of empathy, discipline, and attentiveness. Entrepreneurs should not underestimate this. Leading in an acute crisis is no small feat, and not every manager has had the opportunity to learn this from the ground up.
Crisis communication means clear facts, realistic assessments, and concrete measures. Employees must understand where the company stands, what to expect, and what strategy is being pursued. This strengthens trust and reduces resistance to change.
An experienced crisis manager at the side of management is worth its weight in gold in difficult situations. He or she minimizes damage under time and liquidity/budget pressures. At the same time, management benefits from this experience to be even better prepared for the future. The use of a qualified, experienced interim manager always pays off: Through swift, targeted measures, problems can be contained much more quickly and economic damage limited more quickly.
Practical tip:
Set the right priorities. For example, focus on minimizing the complaint rate and maintaining excellent delivery reliability so you don't lose customers and strengthen your reputation as a reliable partner. This also helps sales. Review your entire supply chain. This will achieve more than excessive and damaging cost cutting.
Redefining corporate goals and objectives
In many cases, those affected lack a clear corporate goal in challenging situations. Many entrepreneurs have overly optimistic expectations and, on the other hand, fail to take advantage of their opportunities. Often, they are so preoccupied with themselves that they fail to notice that they have lost focus on the customer. Above all, they should consider changing customer needs and conduct strategic discussions with suppliers. Anyone who "only" wants to reduce costs and neglects their business partners is making a serious mistake.
Practical tip:
At the first and second levels of management, develop a clear vision of which products and services can contribute to your success. They should ask themselves: "Which products or services will make us profitable?" "What can we do better than the competition?" "How will we generate revenue in one, three, and five years to finance innovations, further training of the workforce, the introduction of AI, and other process improvements?"
First define the future vision and only then develop the appropriate strategy
The Chinese military strategist and philosopher Sun Tzu once wrote: "Without a clear vision of the goal, no one can find the way there. A strategy that is not implemented is the slowest path to victory. Implementation without even a plan means defeat from the outset."
So: First define a target image and then look at the capacities and develop strategies with questions such as: "What budget resources are available to us and when in order to achieve the goals in one, three, or five years?", "What capacities, which specialists do we need internally and possibly externally to achieve which sub-goals and when in order to reach the goal?", "Who can help us achieve the goal faster and/or more cheaply?"
You should also consider what investments are necessary to actively shape your future. Digitalization, automation, the use of AI, or new business models can make a difference. Strategic planning requires a systematic approach. It's not just about reducing costs, but also about defining a viable business model for the future.
After all, there are often several strategies. Then you choose the most suitable strategy – for example, the one that requires the least financial resources but takes longer to achieve the goal, or you choose the strategy that is more complex but leads to the goal the fastest. The next step is to plan the implementation. It is advisable to take experienced employees along on this “journey” – all those who are passionate about it and who want to drive the company forward and inspire the workforce. Communication, clarity and transparency play a major role throughout this entire phase. With a clear perspective and motivation, the workforce is in a position to move mountains.
Practical tip:
It's often helpful to take an iterative, retrospective approach to goal and strategy definition. For example, once you've defined the target vision for 2030, work backwards and ask yourself: What conditions must be met in 2029 for the 2030 goal to be achieved? Then consider what needs to happen in 2028 to prepare for 2029 accordingly. This process continues—if the years 2026 and 2027 also fit—great. Otherwise, keep going back and forth. This approach brings you clarity more quickly, and you can achieve the goals with a much higher probability and with greater certainty, realistically.
Conclusion: Strength of action determines success or failure
Persisting in the crisis is not an option. Companies that act decisively now, engage external support in a timely manner, and reset their strategic course have the best chance of emerging stronger from the crisis. An interim crisis manager not only brings valuable experience but also ensures speed in implementation – and that can make all the difference.
Source: Frankfurter Neue Presse
