Rolls-Royce CEO fired managers and held staff brainstorms as part of a ‘4 pillar' turnaround plan that led to 600% share price jump
With that considered, Rolls-Royce's turnaround since—including a 600% share price jump and hitting profit targets two years ahead of schedule—is nothing short of astounding.
But Erginbilgiç, a former BP executive who doesn't regard himself as ruthless, took a fairly rudimentary approach to instill a successful turnaround at a group that has added more than $70 billion to its market value in the last two years.
Rolls-Royce manufactures engines for major plane manufacturers, Airbus and Boeing, on large, dual-aisle aircraft. The group is also a supplier of engines and propulsion systems for combat aircraft and submarines to government defense departments including the Ministry of Defense in the U.K.
Despite that, when Erginbilgiç joined Rolls-Royce, the company was near its floor for market valuation, bogged down by falling air travel during the COVID-19 pandemic and costly contracts with loss-making clients. An industry-wide rebound in travel demand and some astute contract negotiations are among the headline points that explain Rolls-Royce's turnaround.
In the background, though, are the fruits of an ambitious plan involving each of Rolls-Royce's 42,000 employees.
In an interview with the Financial Times, a victorious Erginbilgiç described how he leaned on 'four pillars' to encourage wholesale change throughout his organization.
The first pillar involved showing staff the extent of the difficulties faced by the company, exemplified by Erginbilgiç's 'burning platform' comments, which both shocked and focused his employees.
Tougher stances were to follow. Under Erginbilgiç's guidance, the company laid off 2,500 employees in 2023, mostly in middle manager positions, the FT reports. At the same time, Erginbilgiç held workshops for 500 employees to allow brainstorming and the implementation of the best ideas.
Erginbilgiç's third pillar required the company to set clear performance targets. The company now has 17 targets, including improving the amount of time its engines were on the wing of a plane, rather than losing money in the repair shop. The fourth pillar of the turnaround aimed to ensure Rolls-Royce's targets were attacked with 'pace and intensity.'
'If you don't have a strategy that can cascade down to 42,000 people it won't get delivered,' Erginbilgiç summarized to the FT.
Bosses are increasingly turning to management practices that can help them get their message across directly to as many staffers as possible. In some cases, this is driven by urgency and, in other cases, by technological advancement.
Speaking to Fortune last year, Sanofi CEO Paul Hudson described how he used the 'Fight Club' approach to encourage employees to begin using its AI agent. Hudson initially got a small group of people in a room using the tool, before allowing word of mouth to help uptake of the technology spread.
Meanwhile, Bayer, a similarly struggling European giant, also turned to a personnel shakeup to combat investor pessimism.
Bayer's CEO, Bill Anderson, got rid of more than 5,000 employees, mostly in managerial positions, and asked employees to self-organize and work in 90-day 'sprints' in self-directed teams.A year after Bayer's attack on bureaucracy began, Anderson said attrition at the company had fallen.
Editor's note: A version of this article first appeared on Fortune.com on March 25, 2025.
This story was originally featured on Fortune.com
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FINRA Foundation Releases Sixth Wave of the National Financial Capability Study
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In many of the demographic breakdowns on measures of financial capability, the middle groups (those with annual household incomes between $25,000 and $75,000, those with some college education but no degree, and those between the ages of 35 and 54) appear to share many of the struggles of those in lower income households, without any college experience and younger cohorts. This is especially apparent in measures of difficulty making ends meet, the impact of higher food costs, setting aside emergency funds and engaging in expensive credit card practices. 'The 2024 National Financial Capability Study reveals a concerning shift in Americans' financial resilience. After more than a decade of improvements, we're seeing many households—particularly in middle-income brackets—struggling financially despite stable incomes. This 'struggle of the middle' signals that rising costs are creating financial strain across a broader segment of the population,' said Gerri Walsh, President of the FINRA Foundation. 'The FINRA Foundation's National Financial Capability Study serves as an important barometer of Americans' financial health. By tracking trends over time and exploring the nuances of financial behaviors and attitudes, this study identifies areas where more support and education can create positive impact,' said Jonathan Sokobin, FINRA Foundation Board Chair and Chief Economist at FINRA. 'This study is a vital resource that policymakers, researchers, educators, firms and financial professionals can use to better understand and address the financial capability needs of Americans.' The National Financial Capability Study focuses on four components of financial capability: Making Ends Meet. 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Since its start, the National Financial Capability Study has provided data on multiple indicators of capability—including financial behaviors, attitudes and knowledge. National Financial Capability Study survey data is collected every three years. The 2024 survey, conducted from June through October, represents the sixth wave of data. Each wave of the study has data from more than 25,500 U.S. adults across all 50 states and Washington D.C. (500 per state/D.C.), and findings can be reported at both the state and national level. The sixth wave has been updated to include new questions on timely topics, including inflation, artificial intelligence and Buy Now, Pay Later, borrowing, among other topics. This extensive body of data is available for free to the public and researchers. More information about the FINRA Foundation's National Financial Capability Study, including reports and data from previous waves of the study and interactive data visualizations, can be found here. About the FINRA Investor Education Foundation The FINRA Investor Education Foundation supports innovative research and educational projects that empower Americans with the knowledge, skills and tools to make sound financial decisions throughout their lives. For more information about FINRA Foundation research and education initiatives, visit About FINRA FINRA is a not-for-profit organization dedicated to investor protection and market integrity. FINRA regulates one critical part of the securities industry—member brokerage firms doing business in the U.S. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. 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US producer prices unchanged with wholesale inflation remaining under control
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The Hill
3 hours ago
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US producer prices unchanged with wholesale inflation remaining under control
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