Brought in after a bribery scandal to present a fresh face of reform to German engineering firm Siemens, former Merck executive Peter Löscher has ratcheted up accountability and cut down on management committees. He talked with TIME's Bill Saporito about the challenge of change.
Siemens has just delivered a nasty surprise to investors, forecasting a $1 billion earnings shortfall. What happened?
Last quarter I said that we're doing a thorough assessment of projects across our company. This is completely in line with the principles of openness, transparency and accountability that are at the heart of how we're re-energizing our organization. We expect charges of 900 million euros [$1.4 billion] in our second quarter, based on the results of a thorough review and audit of turnkey and other similar projects. This is a painful but necessary step toward getting our businesses moving forward faster. It's also a step that will bring about a "no surprises, no excuses" Siemens culture going forward.
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