Coatings World - December 2011

efited from both as I, as president, was mentored, and my management team was coached.

Benefits

1. A better focus on material margins and their impact on the business wherein more attention was given and action taken to raise prices when possible and maintain prices when raw material costs dropped, increasing the bottom line.

2. A penchant for action in all areas of the business, thus allowing the company to continually improve and free employees for other and higher level tasks.

3. Applying proprietary business models in assigning tasks to appropriate departments and functions and not to favored personnel, providing for a better understanding of the demands on the business and abilities of the personnel.

4. Developed significantly better business plans for acquisitions and increasing manufacturing capabilities.

5. Departments employing a proprietary “plan to plan” technique to keep initiatives well managed and grow personnel skills in the process.

6. Understanding the data to information (a structured report) to knowledge (personnel interpretation of information) cycle and that without the “to action” step at the end the prior steps serve no business purpose.

Nice Words But “So What?”

Of course most leaders want it boiled down to dollars and cents of each and every improvement. Almost like making it an ala carte menu that you can pick and choose from. Unfortunately, the issues are so much a part of overall operations that separation is impossible.

I will share that when my division was sold, the sales price was about 12 times EBITDA (vs. an industry average of seven times) because of the value added through mentoring activities and the perception the division created in the marketplace.

Owner/CEO Privately Held Chemical Additives Co. The owner is the second-generation owner/CEO of his company. The company’s survival was in jeopardy when their largest customer was acquired by a company with a long-standing relationship with the owners’ primary competitor. The revenue loss put the company at negative cash flow even after the owner took action to reduce costs.

The owner knew his business and had excellent leadership instincts. However, he believed he was, in addition to CEO, the CSO (chief solutions officer). This isolated him in his decision-making. The owner hated conflict and avoided it at almost all cost. He also found public speaking to be very difficult.

In the owner’s case, the lost customer caught him by surprise. But, he was determined not to let that happen again. He knew the answer was to have many more customers so as not to be so dependent on any one customer. The concern was could his organization handle the additional workload and still maintain their high level of customer service and product quality?

The owner really had two problems: getting the organization prepared for the larger customer base and improving his leadership skills in the area of conflict resolution and communication.

With some coaching the owner shared his vision of a larger customer base and his fears with the organization. Through a series of seminars and workshops, the management team learned about alternative organizational structures. They settled on one and went about the restructuring, becoming more market driven without losing their customer focus or manufacturing quality.

Their customer base increased significantly over the next few years. Then the Great Recession of 2008 hit. The owner’s business was affected as were most in his industry.

This time he framed the situation for his management team and provided guidelines for keeping the business going. Then he let the management team come up with their solutions to meet his guidelines. They have made the changes necessary to weather the storm and accelerate to even greater success as the Up Cycle started.

The CFO tells me the owner has become more confident as a leader. By sharing the business’ problems with the organization, he finds communicating is easier.