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Case Study 1

Structural Reform

When clients approach us, it’s because they have concerns about specific areas of their business that are hampering growth.

These so called ‘special projects’ are usually amongst the biggest challenges an SME will have struggled with, often for many years because they don’t comfortably fall under the skill set of any paid employee.

Despite various attempts to resolve the situation they usually find themselves coming up short for a host of reasons, not least of which is the constant daily pressure of satisfying customer demands as paid staff continue to be pressed to fulfil their primary roles.

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Unwittingly a lack of any obvious resolution creates an unhealthy bias as day-to-day challenges prosper at the risk of more meaningful aspects of the operation, owners and directors grow frustrated by a distinct lack of progress and a realisation they would have profited sooner had they enlisted specialist external support.

Following a recommendation from a shared contact, we received a call from a London firm in exactly this position. The business had been spending money on a plethora of marketing initiatives for years without any noticeable improvements in their fortunes and so we were invited to have a discussion with them; a few days later we’d been appointed to help.

One of our first duties as a client’s ‘critical friend’, is always to undertake an impartial assessment of the company’s operations, technical systems and human capital aspects. This frank and honest assessment might create a little fear and apprehension amongst some clients but it’s essential if we’re to bring about a change in fortunes. Acting as their ‘critical friend and intermediary and putting people at ease in a situation that they may be unfamiliar with, our role is to help the business as a whole, before delivering a clear action plan, and early improvements which grow to yield further dividends.

In this case, our first step was to hold a meeting with the senior stakeholders and the company secretary to begin a process of ‘open dialogue’. We asked frank and probing questions that began to uncover a long list of internal misunderstandings. By the end of our first round of meetings we’d already begun to formalise our opinions which we would subsequently prove. We listened to internal discussions between departments, shadowed team members, observed telephone and face-to-face conversations with customers and interviewed staff. Once we had established which areas of improvement were needed as a priority, this was communicated to the board.

The ‘largest elephant’ in the room was the level of destructive independence and apparent autonomy across each of the three operating sites. We recorded issues across internal and external communications, including in the areas of product pricing and quoted product availability, the mismanagement of third-party contractors, health and safety concerns and a clear lack of any perceived shared values. If we were to bridge these gaps once and for all it would be paramount for us to improve the communications process and to help create a vision. With further changes in reporting methods required from top down, this led to a request for our attendance at future board meetings where we would act as the representatives of the non-attending shareholders.

Whilst we are not able to share specifics due to the nature and privacy of the work involved, we can provide you with a summary of the areas of our involvement in this example:-

  • A new senior management structure
  • Improvements to the reporting cycle and the integration into this cycle of relevant KPI’s
  • Review of all employees’ capabilities (top down)
  • A change in board opinions about the quality and efficacy of the workforce
  • Improvements in the personal and professional skills of the administration teams
  • The introduction of a Health, Safety & Systems Manager
  • A pay freeze and cessation in overtime
  • The adoption of a new tiered salary structure
  • Reduction in absenteeism
  • Increases in accountability
  • New policies adopted for H&S, Privacy and Environmental management
  • Waste assessment and targeted reductions with agreed KPI’s for generating further improvements
  • A review of raw material stocks and a ban on re-ordering some specific items
  • The requirement for Shareholders Agreements and a quarterly Shareholders Report
  • Unilateral adoption of product pricing
  • The adoption of production planning software
  • Changes to the Terms & Conditions of Sale
  • New working practices for third-party contractors
  • Identification of appropriate markets, resources and financial targets
  • Removal of inappropriate practices for improved cultural transparency
  • Improvements to the request for samples
  • New branding
  • Expanded payment collection methods
  • Updated website
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As this raft of improvements were made to the company, the management regained the support of the shareholders and the company as a business was able to confidently market itself in a much more meaningful, honest and determined business that was far better equipped at repelling competition than it had been before. Needless to say, the extent of our work caused some members of staff to leave, but the training methods that had been adopted now helped to integrate the new faces. Today the firm, still run by the fourth generation of directors, has been able to welcome its fifth generation of the family onto the team and we’re delighted to have played our significant part in this success story.

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