Situation

The consumer products packaging market is tough.  The margin for error is slim and the opportunities for growth are few.  With flat share-holder and stock value, this North American based consumer products packing company realized it had to change fast in all directions. To grow through acquisition, diversification, and alliances, it needed to get its house in order. It had to address culture, process, and leadership – all at the same time.

In this organization, corporate structure and management styles encouraged autonomy and entrepreneurial behavior as opposed to collaboration, communication and teamwork. Resistance to change and distrust of the corporate group was widespread. Immediate and measurable improvements were needed to transform the organization into a fast-moving, highly competitive, high growth company.

Solution

Rath & Strong was brought in to lead an organization-wide change effort. Over 60 years of experience on what leads to top performance, and our multidisciplinary approach to implementing improvement, enabled us to marshal resources quickly on several fronts to get results. Our consultants earned the confidence, credibility, and trust of senior management to move this company forward.

The largest division (Custom Manufacturing) began a deep continuous improvement effort, involving leaders through a steering team, setting and aligning core business goals and vital targets, and planning and implementing a controlled roll-out. Cross-functional pilot teams led these efforts and within six months demonstrated impressive results:
Cycle time on customer quotations was reduced by 55%.
Space on line layouts was reduced by 50%.
Line crews were reduced by 50%.

Next, natural work groups achieved waste reductions of 50% and more, and received two awards, one from the state, and one from their largest customer. This led the effort to focus on customer loyalty by setting new goals to improve service, shorten cycles and improve delivery overall.

Teams in the second largest division (Label Printing) reached their goal of reducing equipment set-up times by 75% (from 7 - 8 hours to 2 hours) within six months. Self-directed work teams were introduced throughout the division, including a steering team and internal trainers. All levels of employees now participate in making decisions and suggesting ways to improve. Customer relations and employee morale improved dramatically. The division was the only vendor to receive a Class A vendor certification from their largest customer, a Fortune 100 company.

Change efforts will not work unless top management genuinely supports them. The CEO and senior managers must exemplify the behaviors and values they want the organization to embrace. An integrated Era Management ^SM Plan (counsel to the leader), individual consultations, strategic interviews, and tenacious work created a team culture among senior managers.

Once senior management began functioning as a team, they could create an organizational framework that fully supported continuous improvement. Additionally, the company strengthened its succession planning process and operationalized developmental action plans. The CEO has shown people through changes in his own behavior what needs to be done for the future. Confidence that real change and progress is being made has energized the whole organization.

Results

In the first five years, the largest division has increased manufactured units by 74%, acquired two plants and reduced the unit cost by 8.2%, adjusted for inflation – resulting in greatly increased shareholder value.

Everyone in the organization now embraces the philosophy of continuous improvement with direct support from the CEO. Goals and rewards have been aligned and tied to performance, and the company has a strong continually improving team culture and business focus.

Lessons Learned

Change efforts move faster when teams see winning results on a scorecard. Seeing is believing.

To achieve real change there has to be a sense of urgency. You need to be emotionally connected, excited and have a vision tied to strategy.

Problems/opportunity areas in an organization cannot be neatly separated - they cut across culture, process, customer value and leadership issues. That is why a systemic approach can dramatically increase shareholder value.