Case Study - Manufacturing
Problem
A mature, mid-size industrial manufacturer located in New Jersey was profitable, but stagnant. Senior management functioned entirely top-down, and was deeply involved in day-to-day operations and time-consuming crisis control. Employees were disengaged from the business and numerous long-term managers and supervisors were too comfortable doing things “the way they have always been done.” Markets, products, techniques, and competitors were evolving, but the company was not. Revenue had flattened and margins were in decline. Management was stuck and unable to break out of the status quo.
Solution
The CEO engaged the consultant to help refocus the business. The initial phase was the performance of a comprehensive assessment of the business by conducting one-on-one interviews with the senior management team and all key staff members. The output from this phase was a detailed SWOT analysis and a confidential report for the CEO, including recommended organizational changes.
The next phase was the development of a formal Strategic Plan by select senior management, facilitated by the consultant. The participants established the company’s Vision, Mission and Values; created a formal market assessment; and established core financial targets and key performance indicators. Strategic initiatives were developed, with specific responsibility and due dates assigned to individual senior managers. Further, the team developed a consistent set of metrics to measure progress. The output was a scorecard matrix clearly identifying the KPIs, responsibilities and due dates.
The third phase of the project was focused on employee engagement and cultural transformation. Incentive programs for management were tied to the achievement of KPIs. Continuous Improvement/Lean/Mistake Proofing training was conducted throughout the organization. Employees at all levels of the company were trained in techniques and tools to identify process issues, determine severity, and develop solutions and cost savings.
Outcome
The company was transformed within six months. The organization was restructured, and the top-down command environment was replaced by one that vested authority, responsibility and accountability at all levels of the company. Senior management was freed to focus on the attainment of core financial goals and strategic initiatives. The CEO led monthly review meetings at which senior managers reported to the team on progress towards assigned initiatives, measured by a consistent set of agreed-upon metrics. The CEO also conducted quarterly town hall meetings for all employees, establishing an atmosphere of transparency, engaging supervisors and line employees who became increasingly invested in the company’s progress and results.
Most critically, sales improved from flat to high-single digit increases for consecutive years; margins stabilized, then showed improvement. The company was able to establish a disciplined capital investment program calculated to improve equipment and further increase margins; and initiated an aggressive marketing campaign revolving around a redeveloped web site engineered for e-commerce.
