Change management to improve EBIT and company culture.
How Gibsons’ change management program improved a client’s EBIT by almost 8%.
A manufacturing and installation supplier to the construction sector came to us with a $12 million sales level running at 16% Earnings Before Interest and Tax (EBIT). But they approached us outlining issues with business performance. The business understood that it could be performing better than it was. They required a consultant to take an experienced look at why this was not happening, and importantly, to implement change management to ensure that it did.
Our thorough business review led us to identify significant change requirements to include:
- Shop floor management.
- Accountability and sustainability frameworks for General Manager through to the Production Manager, Workshop Supervisor and Team Leaders.
- Significant training and restructuring to enable shop floor day to day leadership to effectively manage and develop its people.
- Mitigation of the high risk of product failure across production.
While the company was aware that the business was underperforming, it needed support to determine how to achieve the required outcomes and the implementation of this. The experience to design and manage the required change programs were lacking, as was the process and specifics to successfully restructure.
Gibsons’ change management program:
- Developed key criteria for success at each leadership level within production.
- Addressed the leadership structure to ensure alignment and effectiveness with organisational structure.
- Implemented Human Resource processes throughout the business with a focus on production personnel.
- Established training and development programs throughout all leadership levels within production.
- Created leadership accountability frameworks, aligning behaviours and processes, with expectations.
- Set up quality systems to ensure any non-conformance was raised and addressed as required.
- Utilised a Rewards and Recognition program to acknowledge high performance and behaviour.
- Ensured the change program was regularly reviewed by management, and its successes and results were frequently communicated to the production team.
Program establishment, implementation, and change took 18 months, and resulted in:
- Sustained production efficiency and quality.
- Heightened staff performance.
- Improved leadership structure with most leaders growing into their revised roles with exceptional results.
- Financial performance continued to improve and was sustained at or above target levels.
- Earnings Before Interest and Tax approached 20%, an increase of almost 8%.
- Improved company culture and staff morale on the shop floor and within the business.
Change management is rarely an easy, straightforward process. Identifying a problem within your business can be simple, but knowing the best approach to make the required changes to move your business forward can be challenging. Having an external advisor who can take an unbiased look at your business, determine recommendations, and support their implementation, can transform change management to a practical, system focused process change. Gibsons Senior Consultants have been supporting businesses with change management, organisational restructure, and training / development of personnel for 50 years. Find out how Gibsons can help you map out a better business for your company.