Leveraging an Interim General Manager – Righting The Ship
Interim General Managers step into complex roles at a moments notice and remarkably manage to steer the ship in the right direction
Today’s digital economy is forcing organizations in every industry to think of new ways to morph their business models, create innovative new products and identify new ways of servicing their marketplaces. But when you’re no longer a 10-person shop, you can’t operate like a speedboat when navigating the business waters. When your company has become a big ship in the sea, turning it, even the slightest bit can be challenging.
When to call an interim general manager
While there are many ways in which an organization can ensure they don’t get sunk by the competition, one major way to make an impact is to bring in an interim executive. From finding a whole new path to course correction, an interim executive can reset, rejuvenate and reignite a business that’s struggling to turn its ship.
A great example of that is a small to mid-size company in the heavy duty manufacturing industry. Being a family owned business and foreign owned added to the challenging situation of declining performance from U.S. operations. After consistently sliding the wrong way for twelve months, the company ownership decided to bring in an Interim General Manager to right the ship’s course before finding the longer term leadership solution for the struggling operation.
The company had a global presence with factories throughout the world. Unfortunately, the corporate leadership team had lost control of the U.S. plant performance and wasn’t able to self-correct it. Some of the top issues included negative profits, declining sales, rampant quality problems, missed delivery commitments and increasing customer complaints. It is no surprise employee morale was at an all-time low. Key customers were pulling orders and sending them to competitors.
Within the first week, the Interim General Manager quickly saw some common issues he had seen many times before. The on-site management team was inexperienced and lacked the know-how and leadership to not only drive peak performance but to turn things around as well. There had been a poor MRP implementation with minimal training and the team was overwhelmed by reactive crisis management rather than proactive improvements.
The Interim General Manager immediately established a daily focus on specific bottlenecks impacting quality and delivery. After a review of poor purchasing patterns, he stopped excess purchasing activity through daily review meetings and MRP system reviews. From these meetings, he helped the team identify the system errors and correct the MRP forecast, safety stock errors, and redundancies that were driving the purchasing. He launched a 35-day timeline to reduce much of the profit loss through the elimination of an external warehouse that was no longer needed. S&OP was established with cross-functional collaboration including forecast reviews and capacity planning.
To minimize the quality issues they expanded QA inspection within the plant, new products, and shipping activities. Through this process, the team was able to self-identify where some of the bottlenecks were coming from and make adjustments to improve. One of the biggest challenges for the sales team was their number one business driver – Sample Orders. When these took too long or lacked in quality, driving new business became next to impossible. Cross-functional meetings and daily reviews helped put the focus that was needed in this area, as well as share improvements made in other areas that could be applied to this department. Increased communication and visibility provided everyone with what they needed to be successful.
Three months later, it was difficult to believe it was the same company. On hand, inventories were rapidly declining, and the closure of the external warehouse quickly gave the division some much-needed cash flow. The sales team saw sample order lead times reduce by more than 50% and volume capacity to deliver on time and high quality increased by 3x. Overall cost reductions were made while improving the manufacturing process and decreasing defects and reworks. The biggest indicator of customer complaints steadily declined and was able to be back in good relations with their key customer accounts. After only a month of working with the Interim General Manager, the division experienced the lowest internal defects and highest manufacturing productivity than it had seen in the previous twelve months.
Perspective
Often, it just takes someone with an outside perspective and experience in similar types of situations to help the team get back on course. The operations manager of the division said it best, “It has been extremely enlightening to work with him the past few months. His clear insight and logical approach have clarified a very irrational situation. His operational expertise has made a forever lasting impact in our direction and approach; he has aimed us in the correct direction for success. His ability to assess our leadership and make corrections that we just overlooked has been a tremendous asset.”