The North American sales group of a science and biotechnology company serving farmers was facing steadily declining market share.
Although the group's products and solutions were best-in-class, competitors' strong customer relationship management strategies and understanding of farmers' specific needs were stealing away customers.
A new leader of the business unit arrived with a mandate to steadily increase market share through organic growth.
The sales and marketing organizations had no shortage of data-driven customer insights regarding the higher level of customer intimacy required to compete and achieve a market share increase. Many talented individuals were doing everything possible to drive sales growth, but they were experiencing diminishing returns as structure and processes were not aligned to their efforts.
Early conversations revealed that the operating model for the sales organization was structured around three large regional zones throughout North America. Factors such as climate and soil composition are primary considerations for farmers' utilization of the group's products and services. To enhance the sales team's ability to cultivate deep customer knowledge and deliver solutions tailored to each farmer's specific needs, a shift in the overall operating model would be essential.
OPERATING MODEL
Given that climate and soil are the determinants of a farmer's use of the groups' products and services, the sales organization's large regional zones were reconfigured into smaller geographies containing similar climate and soil. This new, more decentralized sales operating model enhanced customer relationship management by bringing teams of salespeople closer to farmers and their specific needs.
ORGANIZATIONAL DESIGN
This operating model shift required a new organizational design not just for the sales team. As the sales team shifted into a larger number of smaller teams, the customer service, supply chain, R&D, and marketing groups' organizational designs needed to be realigned to best support these smaller geographies.
PROCESSES
Workflow was redesigned end-to-end to seamlessly link all the teams across the new operating model and organizational design. Enabling speed and agility to respond to a variety of needs across the new smaller geographies was a primary consideration in the redesign of processes spanning sales, customer service, supply chain, R&D, and marketing.
EMPLOYEE BEHAVIORS
The move to smaller geographies for stronger customer knowledge and relationship building required a shift in salespeople's behavior and an increase in the number of salespeople. An analysis of behaviors critical to increasing customer intimacy, closing sales, and long-term account management led to the construction of a sales behavior assessment tool.
Sales managers were trained on how to use the tool to score their team members' performance across these behaviors. These scores, along with sales figures, combined to determine each salesperson's variable compensation. This sent a powerful message on what was expected to drive success.
This assessment framework was also utilized to target and assess candidates as the group brought on thirty percent more salespeople. These new hires were needed to populate the new operating model and organizational design. The influx of new talent selected on their ability to model these behaviors accelerated the successful shift into this new approach to the market.
The success of the newly designed sales organization was startling with 6% increases in sales each of the next two fiscal years.
A business unit was experiencing high turnover of frontline employees across its plants. Plant managers, a scarce resouce in this specialized industry, were logging ten to thirteen hour days to keep the plants on track to meet production goals.
The situation was unsustainable and represented sizeable risk to the organization as these plants' ability to meet customer demand was in jeopardy should plant managers depart and frontline attrition continue at the current pace.
Exit interviews with departing frontline workers revealed that job dissatisfaction was a contributing factor; however, finding adequate and affordable daycare for their children emerged as the primary reason many were leaving.
Interviews with plant managers, supervisors, and employees indicated that the time spent at the end of plant managers' shifts completing administrative and human resources work significantly contributed their long hours. A shared human resources role was located a time zone away in the headquarters office.
A review of processes uncovered various workarounds and wasteful practices in the plants, stemming from processes that had not been realigned to meet newer systems and plant requirements.
ORGANIZATIONAL DESIGN
New human resource roles responsible for the plants were created and situated within the vicinity of the plants they served. This reduced the human resources load on plant managers and also created the capability to track and manage the entire employee journey from recruitment through departure.
Administrative tasks were streamlined and the roles of both plant managers and supervisors were redefined so that much of the administrative burden on plant managers was shifted to supervisors. The additional responsibility was welcomed by supervisors and provided a stronger foundation for future moves into plant manager roles.
LEADERSHIP, TEAM and EMPLOYEE BEHAVIORS
Training on their new role responsibilities and principles of high-performing teams was delivered across supervisors and plant managers. Targeted coaching of intact teams further embedded high-performing team behaviors and expectations for all team members.
PROCESSES and DATA & TECHNOLOGY
Workstreams of employees were assembled and guided through process improvement practices to develop the right process solutions within their plant. Engaging employees in this manner built their understanding of the new process improvements and commitment to modeling behaviors that would support the launch of these new processes in their plants.
Software platforms and flow of data within the plants were considered in these process improvement workstreams with results that simplified and streamlined data flow across systems and people.
COMMUNITY
The business unit took the extraordinary step of offering incentives for opening and sustaining daycare facilities to the communities surrounding these food processing plants.
Improvements in reduced plant manager hours, speed and agility gains through new processes, and demonstration of behaviors supporting the change were immediate. This enhanced efficiency improved performance within six months of launch, resulting in lower required headcount and an 8% reduction in unit labor costs.
Additionally, attrition of employees was slowed by 12% within the first three months, thanks to the plants becoming a better workplace for all employees. Job satisfaction scores improved from 'dissatisfied' to 'satisfied,' positively affecting overall morale and productivity.
Offers to support new daycare facilities in local communities engendered high respect for the organization and catalyzed the launch of new childcare facilities. Exit interviews revealed that lack of daycare was no longer the primary driver of frontline employee attrition.
A leadership team was formed by a private equity firm to perform due diligence prior to replacing the C-suite of a pending acquisition. The private equity firm aimed was taking the company private to implement necessary changes for improved performance and sales growth.
The seller's performance lagged behind industry competitors, leading to a significant market share decrease and a 75% drop in stock value over the prior five years.
Early on, enhancing customer relationship management, improving customer satisfaction, increasing sales, entering new markets, and eliminating service disruptions were identified as critical factors in maximizing deal value within a five-year exit strategy.
An assessment of the organization's structure and headcount during due diligence identified a bloated leadership structure. The organization had far too many vice president and director level roles relative to its size.
It was also evident that the performance of the combined marketing and sales function across brand, ecommerce, pricing, call center satisfaction, and sales was well below competitors' performance in these areas, limiting potential sales growth and market share increase.
Interviews with past employees, along with Glassdoor and Indeed employee ratings, painted the picture of a siloed organization where finger-pointing between teams was prevalent while end-to-end accountability was scarce.
The overall picture was of an organization that was not aligned to customer expectations and was slowly reacting to competitors' moves rather than leading the pack.
MISSION, VISION and VALUES
The leadership team and private equity firm had a clear mission, vision, and strategy which were inputs to a facilitated process for defining corporate values. In high-performing organizations, organizational culture and customer experience are fully aligned and mutually reinforcing. The customers' need for easy and reliable solutions, which they could trust the firm to price fairly, was translated into a set of internal values directly aligned with these customer preferences.
BEHAVIORS and MOTIVATIONS
With strategy, mission, vision, and values in hand, an exercise with the leadership team commenced to define the leadership, team, and employee behaviors that would drive success. The 5-year exit strategy sat at the center of a process for developing a set of behaviors that would propel execution of that strategy. Once defined, it was critical to quickly develop an assessment tool based on these behaviors.
An assessment of all leaders from vice president through director level was held less than a month after the acquisition deal closed. The assessment tool grounded the entire process by providing interview questions with assessment criteria tied to each dersired leadership behavior. The tool also captured the assessment results from each individual's interviews and displayed them as a basis for the leadership team's discussion of each individual.
ORGANIZATIONAL DESIGN
Marketing and sales accountabilities were separated, with each moving into its own new function. This provided greater clarity and accountability for performance improvements required in each domain.
The information technology group was restructured to reduce silos and elevate areas of specialization aligned with strategic objectives in the five-year exit strategy.
After the leader assessment process, the new organizational design provided a smooth path into new roles for those leaders who were staying.
PROCESSES
Capabilities like new product development spanned multiple functions. This necessitated new processes spanning the new organizational structure. The processes clarified responsibilities, decision right and established end-to-end accountability for outcomes.
The leadership team exceeded the private equity firm's expectations during the first 60 days by demonstrating exceptional speed, rigor, and impact in their leadership talent decisions, restructuring, process improvement, and overall business improvement efforts.
Internal employee surveys and Glassdoor employee ratings had an average 30% rise over the 120 days post-close, reflecting a positive shift in workplace culture in the midst of significant change.
The organization has consistently met or exceeded all key performance indicators tied to its five-year exit strategy.
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