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In 1991 Continental found itself in a serious crisis. The tyre producing company was making huge losses in key divisions and paid out no dividends. The management of Continental was highly centralised. Senior executives tended to be principle administrators, not accustomed to taking the initiative in the areas for which they were accountable. It was in this situation that Dr Hubertus von Grunberg took over as Chairman of the Board of Continental AG. He went on to oversee a rigorous decentralisation of all divisions that made the company more market-oriented. Employees were given a ''longer leash'', while senior executives were encouraged to show more entrepreneurial spirit in the performance of their duties and to be more receptive of innovations. Parallel to this, Dr von Grunberg guided Continental towards a new strategic direction as systems supplier to the automotive industry. After another profit slump in 1993, the measures introduced started to show their effect and profits began a steady climb. In 2000 the company reported a profit of 204.7 million euros, with positive results in all corporate divisions. In June 1999 Dr Stephan Kessel took over as Chairman of the Board. By that time Continental had positioned itself as a high-revenue chassis specialist and had already made considerable headway in its transformation to intrapreneurship. In 2001 however, the process of change was not completed, in fact, new strategic innovation projects had just been initiated. Maintaining the entrepreneurial energy necessary for a successful strategic renewal was seen as the key management challenge. **EFMD European Case Writing Competition Category Winner 2001**