Barbara Kux

The new enterprise opened for business in May 1990. True to her approach, Kux unveiled "Hotel Zamech" (a little place that ABB rented and renovated) in early June. She finalized a satellite link between Elblag and Zurich in early August. With the infrastructure in place, she unveiled a comprehensive change program. That program - which became a model for what she would carry out elsewhere in Poland, as well as in Hungary and Croatia - was built on four principles:

1. Immediately reorganize operations into profit centers with well-defined budgets, strict performance targets, and clear lines of authority and accountability.
2. Identify a core group of change agents from local management ("hungry wolves" she calls them), create small teams responsible for championing high-priority programs, and closely track the results.
3. Transfer expertise from around the world to support the change process, without interfering with it or running it directly.
4. Keep standards high and demand quick results.

What's interesting about these principles is that they could be used as a template for change at any bureaucratic organization. Companies in Poland or Hungary may need more technical support than companies in the United States or France, but there is no reason, believes, that they can't restructure themselves every bit as quickly.

"It's a question of selecting the right people," she says. "Managers are born, not made. People need some basic business skills: accounting, finance, marketing. You can teach those skills. But you can't teach initiative, creativity, passion, vision. Good managers in Eastern Europe are just as smart as good managers in America or Japan. You have to find them, trust them, and let them do the work."

By the end of 1992 the change program at ABB Zamech had taken hold. And the results were staggering. Revenue had more than doubled compared with 1990. Profits had more than tripled. Even the employment picture looked encouraging. The work force stood at 3,800, a reduction of just 25% from when ABB took over in 1990.

Kux doesn't make excuses for her one laggard operation, a 500-person turbine factory outside Zagreb, in what is now Croatia. The plant is exceptionally modern for Eastern Europe. But it has been caught up in the region's brutal fighting. The stories are chilling. The factory's 30-year-old manager of quality was killed in the war. Over Christmas in 1991, the factory itself was bombed by Serbian planes.

"The plant manager went to the factory 90 minutes after it was bombed," Kux says. "That gives you a sense of his commitment. There were holes in the roof, glass in the machines. He had to get the news to Zurich, of course, but he was smart enough not to telephone. He figured the Serbs would intercept the calls and send the bombers back. So we communicated by fax. We visited the plant in February, after the fighting had slowed down, to emphasize our commitment."

Barbara Kux began her assignment with Nestlé on January 1, 1993 - appropriately enough, the first day of the New Europe. She no longer worries about turbines, boilers, and transmission gear. Instead the issues are: Which of Nestlé's chocolate factories in the East can meet world-class standards? What blends of Nescafé are right for Poland? How can Nestlé improve the quality of the soups it makes in Hungary?

The game is still young. But Kux is convinced that the techniques perfected during her three years at ABB are directly relevant to making change on behalf of the largest food company in the world. "The issue isn't turbines or chocolates," she says. "The issue is productivity. You are working to get higher productivity from people and capital and better quality across the board. Those issues are inherent to the system in Eastern Europe, not to specific industries. The restructuring needs are the same."

Which leads directly to what may be Barbara Kux's most telling point. The longer she wrestles with the productivity challenge in the East, the better she understands the gravity of what remains to be done in the West. Eastern Europe is a once-in-a-generation drama full of dislocation, pain, and some remarkable triumphs. But it is also a high-speed preview of the future that awaits Western Europe. "Think of the impact of what we're doing on companies in France or Germany or Switzerland," Kux says. "Managers and workers now realize that there are factories two hours away that can produce with exactly the same quality and 30% lower costs. That's a huge disadvantage. You have no choice but to change."

By accelerating the management revolution in Eastern Europe, Barbara Kux's most important contribution may be to help bring the revolution home.

William Taylor is a founding editor of Fast Company.