Andy Jones Managing Director, Baerlocher

Skills and Talent Workshop

Manufacturing Advisory Service Conference June 18th 2011 MUFC, Old Trafford. Manchester Andy Jones Managing Director Baerlocher UK Limited

Releasing the potential from the talent within

Life at the learning edge in a SME subsidiary of an established multinational just after the founding entrepreneur has gone 1. 2. 3. 4. 5. Scene setting Entrepreneurial growth Success then Acute pain Co dependency and Change management failure Creating the right environment to release the potential within Building trust using Champions and Catalysts Using MAS to Survive and Thrive Create the conditions which allow for talent release Then and only then, can your employees reach their potential

Baerlocher UK Limited A brief history : 1973 - 2011

Subsidiary of Baerlocher GmbH Private Ownership, Munich based UK = 12% of EU/MEA Sales (13m) Manufacturers of Plastics Processing Additive systems End users Construction sector mainly PVC building products

Production, Sales, Laboratory, Warehouse Established 1996 in Bury

UK Sales agency, Dorking, Surrey Founded 1973 Office Closed 1990

Change of MD in 1989 UK Office moved to Bury, Lancs

Business and Employee growth over the past 25 years

Revenues and Employee numbers follow same trend
Entrepreneurial start up period
2,500 2,300 2,100 Gross Profit 000's 1,900 1,700 1,500 1,300 1,100 900 700 500 300 100

Manufacturing

Acute Pain

Survive and Thrive

50 45 Average No of Employees 40 35 30 25 20 15 10 5 0

19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10
Employees Gross Profit

Employee Satisfaction and Success

The 7 common traits of a successful business (best financials and highest employee satisfaction)
(Vodafone UK s Working Nation survey 2006)

Leaders (Not Followers) Risk Taking (Not Cautious) Innovative Diversified Clear Single Identity Early Adopters Long Term strategists

Most Commonly found where:Start up s : 4-5 yrs of Trading 10-50 employees Young senior management (<50) YOY Profit growth >20% <5% Staff churn Employees highly motivated and satisfied

Between 1989 1996, these were the traits of Baerlocher UK A highly successful customer orientated selling organisation Power culture, play hard work hard Lead by an entrepreneurial style High level of Autonomy Sponsored by Company owners

Boost in profits follows and further 1m invested in 2000

BUT promised growth turns into decline in parallel with employee departures
Em yees a De art res 1987 - 2011
Manufacturing Acute Pain Survive and Thrive
20

Entrepreneurial start up period

2 500 2 300 2 100 Gr ss r f t 000's 1 900 1 700 1 500 1 300 1 100 900 700 500 300 100

Departures 1996 - 2007 60% in Manufacturing/Lab 40% in Sales/Admin/Management 70% LEFT FOR ANOTHER JOB Early growth years few staff changes 2008 - 7 Voluntary Redundancies, 1 Death, 1 Planned retirement

10

19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10

mployees Leaving

Gross

ro i

Em

yee e art res

15

Organisational development starting manufacturing

Opportunity lost Manufacturing was bolted on rather than integrated
SALES TECHNICAL QUALITY MANAGEMENT PRODUCTION

CUSTOMER SERVICE MANAGING DIRECTOR FINANCE & ADMINISTRATION

EXTERNALS SUPPLIERS (WAREHOUSING) SITE MANAGER SITE MANAGEMENT INDUSTRY

PARENT COMPANY PRODUCTION HEALTH & SAFETY

KEY CUSTOMERS

PARENT COMPANY (MANAGEMENT)

NETWORK

INVENTORY

TRANSPORT

STAFF (THEM)

WORKS (US)

The Site Manager was a self made entrepreneur from the same industry TWO SPIDERS totally controlling their respective webs COMMAND AND CONTROL management style across the company Each SPIDER protects the other locally and with the parent company

The dark side of entrepreneurial management

Creating Employee Co dependency

Intensity and closeness in a start up creates dependency Employees freely concede managerial control to the boss Positive side:Creativity, self reliance, courage and vision Dark side:Preoccupation with control, sense of distrust, desire for applause, greed and lack of transparency. A LACK of TRUST hinders organisational processes - does little to engage employees in their work but people stay around? The nature of the trap is a function of the nature of the trapped

Co dependency what actually happens

People in positions of authority should decide what should be done People consent to being controlled like a thing in the extreme cases Even seeing the need to act, they don t take the initiative and wait to be told what to do and respond as directed Leaders get blamed when things go wrong A fear of change felt by those who are dependent on a few decision makers A fear of change felt by those who make the decisions RESULT = No change, passive middle management, no one takes responsibility, not everybody is clear about what is expected, the rules can change without notice, disempowerment expecting others to change first before they need to

Co dependency & Emotionally Cancerous behaviours

Criticising

Comparing

Competing

Complaining

Security is sought from sources outside the individual because they are co dependent with their environment, they engage in destructive, cancerous behaviours. Almost impossible to deliver high quality to customers And we struggled to recruit key staff from the marketplace

2001 - 2003 Management demand Change

But the Change management initiatives fails

External consultant employed in 2001 briefed to examine why are we not achieving our promised goals after winning investment in 2000 A Quantum leap in Sales is demanded by the BoD Outcomes :Failure blamed on sales and technical functions Management group is formed from silos - department heads Cross functional working parties formed to discuss fluff issues MD control intensifies, employee churn increases dramatically, especially with those < 5 years service in the company or in non management roles Most change management fails because of inherent systemic failings Learned incompetence prevails, survivors know how to survive

What most people actually want

(Stephen Covey the 8th habit from effectiveness to greatness)
Amongst SME leaders and Large, corporate company leaders, strong workforce engagement is perceived to be the single most important attribute of a successful business
(Vodafone UK s Working Nation survey 2006)

Use me creatively
MIND

People have choices

SERVING HUMAN NEEDS IN PRINCIPLED WAYS

Creative excitement Heartfelt co-operation Cheerful co-operation Willing compliance Malicious obedience Rebel or Quit

SPIRIT

Tackling the issues to create sustainable change

ESSENTIAL to remove the causes of co dependency and rebuild TRUST

2004 - New group CEO formulates exit for MD by 2006. Sales Manager and Technical Director form an alliance for the future . - Define and execute business strategy - Turnaround conflict with parent company and foster cooperation - Recruit for planned succession as key customer facing people are due to retire 2005 - Site Manager retires ahead of MD he knows what s coming 2006 - Appointment of New MD and Site Manager (both from deputy positions) - Equality of conditions between staff and works, robust HR introduced - Communication of strategy & progress regularly to ALL employees 2007 - Cross functional project teams solving real issues People want to HELP - Manufacturing Institute and Executive support begins (Exec Coaching) - Employee and role development across the whole company 2008 - Recession = The trapped are released : 25% of employees leave by VR

Re-establishing Trust

Competitive advantage will be gained only when employees trust their company, when their aspirations match the company s strategy and when their hopes stand a chance of being met

Champions and Catalysts

Can you achieve the changes needed alone?

A Catalyst - Nitrogen and Hydrogen when mixed and heated do nothing Add some Iron and Ammonia is produced Using a Catalyst in organisational change An outsider with mysterious ways of getting things done where there s lot s of trust around and then they move on .to propagate additional change A Champion a leader or leaders who champion and sell the idea Generally promotes the cause, leading onward, vision, purpose, integrity Several Champions from different departments and levels creates a

Guiding coalition for change

With the right environment we can turn the triangle

When the true leaders job is done, people will say we did it ourselves

Operator
Instruct & Command

Dir Manager Supervisor Team Leader Operator

Catalysts, Champions, TRUST

Team Leader Supervisor Manager Dir

Support The Process

Using MAS and Manufacturing Institute as catalysts First recommended to us by a customer in the North West 2007 Attended MAS Conference at Reebok Stadium Free Audit by MI Lean awareness training ALL employees 2007

Introduction to 5S 3 day event April 2008 Warehouse blitzed! Customer visits where Lean is well established

Using MAS and Manufacturing Institute as catalysts

Lean implementation in warehouse and production areas Train to Gain Funded NVQ level 2 for 12 employees - 2009 2009 - Accelerated Route to LEAN programme (Warehouse Supervisor & Site Manager) 2010 - Team Leader Development Programme (Production Supervisors) 2010 - Introduction to 5s (for new employees) 2011 Lean Office to be started

We have Survived and are Thriving

In spite of the massive drop in UK construction products demand

First factory globally to stop using toxic Lead compounds (industry commitment
to stop completely in EU27 by 2015)

>40% share of target market = Successful 2004 sales strategy 2 investments - increase capacity and improve productivity (1m) Won Environmental awards (Groundwork Bury) UK personnel heavily involved in directing parent company
High Quality Sales training for all customer facing staff (group-wide) Apprenticeship scheme started in 2010 (Laboratory) 2007 plant and engineering staff training at parent company factory Leadership development courses for Management team First aid, Fire Marshall and manual handling training HGV Class 1 and ADR Hazardous Goods as back up on logistics Site manager qualified NEBOSH Level 3 Professional accountancy qualifications/customer service training the Catalyst and Champions - going about their business as usual

Skills and Talent Workshop

The outcomes of what we have achieved for our employees

Absenteeism - 1.5% in 2007, 0.3% 2010 Staff Churn - constant threat of staff being lured away by customers otherwise nil FLEXIBLE and MOTIVATED workforce prepared to do ANYTHING to meet the needs of our customers Opportunities for ALL to make a REAL CONTRIBUTION High levels of TRUST, low levels of STRESS ATTRACTIVE to talent in the market place JOB SECURITY and JOB SATISFACTION