| Industrial
Product Manufacturer Responds to Declining Revenues
Scenario
Despite its global presence, well-respected
brand and reputation for superior design and product knowledge,
a Europe- based manufacturer of construction products was facing
formidable challenges. Increased competition and a sluggish world
economy had resulted in several years of declining sales.
The company’s U.S. operations responded
with a layoff, replacement of its senior executive, changes in management
team membership and a restructuring that spun off its domestic sales
force into a separate entity. Regrettably, this last change resulted
in impaired communication and cooperation between sales and manufacturing.
Aware of CB&H’s Strategic Management Services (SMS) and
its alliance with the Great Game of Business (GGOB), the company
engaged CB&H to provide performance measurement and team development
assistance.
CB&H Action Steps
Working closely with GGOB, SMS assessed the
local manufacturing operation. Using structured interviews and questionnaires,
SMS collected in-depth information from management and staff regarding
the company’s current performance, operational strengths and
weaknesses and strategic priorities. Additionally, SMS scrutinized
the client’s financial statements and analyzed market and
customer data. The result was a giant balance sheet of the client’s
operational assets and liabilities.
SMS and GGOB met with the company’s senior
management team to review the appraisal results and to facilitate
a discussion of key issues. By meeting’s end, management determined
that improved results required, among other things, improved goal
clarity, stronger two-way communication and a more open sharing
of pertinent financial data with employees. With continued consulting
support, management identified the U.S. operation's “critical
number” – a metric of critical importance to the operation’s
improved performance. Management also designed a “scoreboard”
to track the critical number and the performance drivers impacting
it. Lastly, management agreed upon a bottom-up communication process
consisting of a weekly department-level and management team reviews
of scoreboard metrics.
Management rolled out the plan at a meeting attended
by the entire local operation—all 200 office and manufacturing
personnel. Additionally, to promote dialogue and understanding between
sales and operations, sales management updated the attendees on
what is being done to improve sales results and what sales and manufacturing
personnel can do to strengthen collaboration.
Results
The scoreboard and communication initiatives
resulted in improved internal communication and enhanced financial
literacy of the employees. Additionally, employees have asked managers
to expand the scoreboard so that it tracks more business drivers.
Reportedly, there is also improved collaboration within the management
team and between managers and shop personnel.
The client was so pleased with the results of
this project that SMS has been engaged to provide management coaching
to one of the client’s senior managers and the client is considering
additional management skills training for all local management.
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