Tufan Erginbilgiç, who took the helm as CEO of Rolls-Royce in 2023, has engineered a remarkable turnaround for the British aerospace giant. In just two years, the company’s share price has skyrocketed by 500%, with profits surpassing targets two years ahead of schedule and market value increasing by over $70 billion.
Erginbilgiç’s transformation strategy rested on four key pillars. The first involved a stark reality check for employees, with the CEO describing Rolls-Royce as a “burning platform” facing its “last chance”. This approach aimed to focus the workforce on the company’s challenges, which included pandemic-related travel reductions and unprofitable contracts.
The second pillar focused on employee engagement. Erginbilgiç organized workshops for 500 staff members to generate and implement innovative ideas. He emphasized, “If you don’t have a strategy that can cascade down to 42,000 people, it won’t get delivered,” as per Financial Times.
Setting clear performance targets formed the third pillar, while the fourth ensured these goals were pursued with “pace and intensity”. Erginbilgiç stressed the importance of quick wins, stating, “If you don’t put scores on the board quickly, you will lose people.”
As part of this strategy, Rolls-Royce laid off 2,500 employees, primarily in management positions. Despite this move, Erginbilgiç doesn’t view himself as ruthless, instead focusing on the overall transformation of the company.
The results have been impressive. Rolls-Royce reported a 57% increase in operating profit for 2024, reaching £2.46 billion. The company has also announced a £1 billion share buyback program and resumed dividend payments after a five-year hiatus.
Erginbilgiç’s approach has not only revitalized Rolls-Royce financially but has also repositioned it for future growth in the aerospace and defense sectors. As the CEO put it, “When you continue to deliver, suddenly more and more people believe.”
