Rolls-Royce believes its decision-making processes are too slow and that its planned restructuring will concentrate on giving the company the ability to respond more rapidly to market changes.
The manufacturer is to detail a new restructuring initiative on 24 November after issuing another warning over its 2016 profit outlook.
Chief executive Warren East, speaking to analysts after the warning, said the company had shown, over the last several months, that it was “less able” to adapt to the market than it ought to be.
Rolls-Royce has doubled, since July, the scale of the negative impact on its 2016 profits arising from shifting conditions.
“These changes will happen and they do happen fast,” says East. While the pace of these market effects had probably accelerated since mid-year, he says, the company has still demonstrated an internal sluggishness.
“We have lots of people engaged with customers, engaged with the market. We pick up lots of data, we turn that data into information, we make decisions about it,” says East.
“The issue is that we take too long, and the process by which that data gets turned into information is too complex.
“What we need to do is make the whole process more simple – but also to increase the ‘clock frequency’, so we’re able to respond more quickly within the business to changes in the market.”
Rolls-Royce is expecting a £650 million ($990 million) impact on its 2016 profit forecast, more than double the figure disclosed in July.
Source: Cirium Dashboard
