The challenge was to take this $125 million organization to the next level, which was defined as a faster, higher performing company with less reliance on HQ and a sales objective of $200 million in three years. The packaging company was comprised of 21 independent distribution centers, housing operational personnel, customer service and sales, and in some cases sales management. Current structure included 7 regional sales managers and a scattered group of operational managers.

Top management that wanted to grow, and distribute decision making, but were adamantly unwilling to give up control or status hindered progress. Field management was weak in certain regions, and business managment acumen was weak within the scope and skill set of existing Regional Managers.

Recruited stronger Regional Manager talent and set in place development process for those current RMs that had the capability of making the grade. Restructured the sales and operational mission around the 21 distribution centers placing regional P&L responsibility with the Regional Managers. Trained operational managers in the area of asset management, both receivables and inventory. Changed the reporting systems to provide managers with the necessary information to manage for profitability.

Successfully recruited three outside experienced Regional Managers raising the bar on the talent pool. Sales grew 20% in the first year and 7% in the second year, while pretax grew 97% and 44% respectively.

Organizational changes distributed the decision making to the field, closer to customers, and led to further success in training Human Resources on profit-based decision making disciplines and customer satisfaction. Raising the bar on expectations and skills proved instrumental at achieving these impressive results.

Sales, Service and Logistics organization was comprised over 300 people representing the front-end customer interface between two stand-alone operating divisions. Customer service teams were scattered across North America in five different locations, with different managment and technology available to each location. The strategy was to consolidate customer service into one operation co-located with the technical service organization in the HQ location.

Sales resisted the extraction of customer service from "their" region or territory citing loss of control and customer intimacy. Where customer service was located in plant facilities, operations argued loss of customer connectivity and information.

Conducted significant research with customers to determine service requirements. Designed a relocation plan, commensurate with service retention strategies for each region, while moving customer service to the consolidated location. Cross-trained employees that chose not to move with the transition in order to optimize employee retention and skill transfer. Hired and trained vacancies as determined by the transition plan. Orchestrated the transition in 4 months time.

Net of new investment in facilities and infrastructure, the actions saved over $750,000 in the first year, and well over $1.2 million in subsequent periods. The co-location of customer service with technical service improved response time to customers' inquiries by an average of 2 days, by creating Customer and Technical Service Teams. The organization was able to leverage technology, by standardizing on a single platform in one location, streamline training and troubleshooting. Single managment philosophy and expectations enhanced performance toward a uniform set of expectations.

This was a significant philosophical shift for the organization. Additional pre-selling of the benefits would have been advisable, although the durability of the strategy is evident by the fact that the same structure remains intact today.

IMTEC Industrial Laminates business unit was experiencing a rapid fall in Operating Income. In less than a year, ROS had fallen from 13% to 3%. In addition, critical decisions were pending related to capital investments for this business. Questions surfaced as to keeping the business unit or divesting.

The former GM was well liked by all the employees, and the relationship with HQ was strained by his reassignment. Employee morale suffered as stories of divestiture or closure ran quickly through the rank and file.

As new GM, promptly focused the organization on the issue of creating as much value in the business as possible, sending the message that regardless of who eventually owned the business, it would be viable and growing. The management team quickly identified key levers in the business that would improve the financial performance while sustaining important customer relations. Set direction in new pricing behavior, raised pricing in loss areas, trimmed unprofitable customers, established shop floor controls to arrest BOM violations and inventory shrinkage, and focused process engineering efforts on key product/processes to raise yields on the largest product line in the mix.

Operating margins improved from 3% to 8% in 4 months. Made recommendation to divest the business, which was accepted by HQ peers and management. A short list of buyers was pursued and resulted in a friendly divestiture to a downstream customer.

This turned out to be a great, yet mature $40 million business. All of the actions were targeted and focused only on those levers that would improve the value of the business. This was truly a success.

IMTEC's Laminate Systems Division in Europe had experienced inconsistent sales and profitability performance over the prior 5 years. The business was trending toward its second year of losses and the market was declining at a double digit pace. The division, headquartered in Germany, needed a strong manager to lead its business renewal/turnaround effort.

An initial cultural as well as language hurdle was the fundamental issue, in concert with a business that was morally defeated. Having an American expatriate as the new leader did not necessarily lend itself to improved morale. The marketplace was experiencing the worst decline ever remembered, dropping by 20% over the prior year. There was extreme capacity overhang in the market, and the DM was inflated, making imports dangerously competitive. The cost structure and overhead were out of line with the position of the business and the realities of the marketplace.

Leadership of the operation was quickly engaged and created the burning platform, and a commitment to doing whatever it took to achieve profitability and restore pride to this business unit ensued. Engaged the entire organization by sharing with them the conditions of the business, the vision and the plan of action, followed by regular communications session with all employees. Downsized the operation by over half. Trained the sales force to emphasize the premium product mix at higher margins, and to focus on higher technology OEM customers. Reconfigured the operation to make higher margin products at a greater throughput, and imported standard materials from lower cost facilities in the US.

Lowered breakeven by over 25% in the first year, and increased sales by 2% in a declining market thus generating a positive swing in pretax income of $3 million in this $68 million business unit. Morale improved significantly as a philosophy of team supplanted hierarchy as the way to get things done.

Turnaround performance fueled by a shared sense of vision and urgency was the foundation for success. Early, however, the German labor union leaders should have been brought into an active role in the decision making process. This was corrected and made execution of future key cost reduction initiatives go much more effectively.

Puget Enterprises management team lacked experience in sales, marketing, business development and strategic planning. Commercialization of the business required direct customer prospecting, presentations to government agencies, and banking institutions. The new venture had no sales or prior promotional impetus. Committed to the partnership 18 months of effort to conduct all sales, marketing, and strategic planning necessary to commercialize the start-up.

Construction aggregate market was extremely competitive and in many ways protected by old informal partnerships and cronyism. Working capital as well as financing of fixed investments had come only from outside investors. No bank line of credit had yet been realized.

Market research determined major customers and market intermediaries. Researched product specifications and downstream processes. Created marketing collateral for direct mail campaigns, customer and investor presentations, and became chief spokesman for customer, investor, banking and government agency contacts. Developed long-range rail and over-the-road transportation networks, as well as a State DOT bidding process.

Cultivated contracts and letters of intent with customers throughout the Northwest with over $4 million in potential. Secured the company’s first State DOT contract worth $400,000 within 4 months of operation. Secured bank financing, with partners, for over $1.5 million.

Contracts and letters of intent are now manifesting in ongoing business, and Puget has access to influential government agency positions that will pay dividends in the future.

Product management strategy and presentations lacked quantitative analysis to substantiate decisions. The process for accumulating inputs from the marketplace, translating those into strategy and integrating operations was not coordinated. As a result there was little cohesion between the sales channel and product mix strategies. Additionally, little to no requirement for ROI hurdles was imposed on product line decisions.

Internal marketing culture seemed to be based on a trial by error marketing strategy. Marketing had been reacting to impulses passed on from the distribution channels. No synergy was being created or leveraged across wholesale and retail channels as relates to marketing strategy.

As new VP of the division, immediately imposed quantitative measures and hurdles on the product marketing teams for justifying product lines and new product introductions. Emphasis was placed on pricing targets, margin hurdles, volume and cannibalization metrics. Formed partnerships between sales channel directors and product marketing managers and ensured manufacturing representation on product line decisions.

Good-better-best product marketing strategy brought a rational strategic framework for analyzing product mix and new product development decisions. Margins improved in the ride control segment by 5% points. Quality of marketing decisions improved dramatically because of the quantification mentality. President of the company applauded the new mindset and introduced it to other divisions.

This was a mindset and philosophy shift for the marketing culture in the aftermarket. Prior marketing leadership led product market managers to leverage only promotion, flare and emotion into their strategy and decision making process. Changing the principles on which good decisions should be made was the critical lasting effect of this work.

Earnings were being hurt by negative variances in the period cost line as a result of poor information systems giving operational personnel visibility around freight costs. A negative variation of $400,000 was recorded in the prior 10 months.

Information systems were not capturing variations nor providing actual cost detail in terms of both inbound and outbound freight. Different practices and experience levels existed across the 21 distribution centers. No standard operating procedures were in place to address the issue and to provide instructions to operations personnel.

A team was quickly formed, comprised of Operations managers from distribution locations that exhibited positive as well as negative period cost variations. As a stopgap measure, standard costs were artificially boosted by 8% to guard against further negative period cost variations, which provided for margin cover over the potential for negative cost variations. Explored best practices of those facilities showing positive results. Distribution facilities began sharing operational resources to spread best practices and to train operations and customer service. Standard operating procedures were developed from trials of best practices across distribution locations.

Generated a positive variance over the course of 12 months resulting in a positive income swing of $450,000. Operations and customer service now had a standard operating procedure for training and trouble shooting. New costing procedures were introduced to ensure inventories reflected accurate inbound freight costs, and all outbound costs were captured for pricing passthrough to customers.

This trouble shooting exercise uncovered a number of opportunities where standard operating procedures were lacking. Training was highlighted as a key enabler to ensure common practices are followed. New standards provided a platform for enhancement, as innovation is best measured and conducted around standards.

The Product Identification Division serviced over 1000 customers and had the broadest product line serving all of the traditional packaging market segments. Our product mix, however, required significant upgrading, and to boost sales growth we needed to penetrate several niche markets. The pressure sensitive label market was in decline and there was excess capacity among competitors.

R&D resources were centralized and not embedded within the division. SKUs had multiplied over the course of time; as a result there was resistance to add product variety to the manufacturing mix.

Established product/market segment specialist teams with manufacturing and R&D representation to accelerate communications between functions and departments. Launched three specific product development efforts. To penetrate two niche markets, product development activities were pursued in the Fruit and Vegetable market, and Dairy Label. Proliferation of SKUs was addressed by redesigning core product/adhesive system with the intention of upgrading the core product as well.

Launched a new product for the Fruit and Vegetable market that facilitated labeling in the field at harvest, resulting in new sales of $6 million over 18 months. Successfully introduced an improved, lower cost dairy label product, increasing sales by $5 million in the first year and improving margins by 5% points. Redesigned core product was introduced on time and transitioned into the product mix over 6 months. SKUs were trimmed by 33% in the first 3 months of product introduction.

The formation of product/market specialist teams accelerated the new product development process and became the model for other divisions.

As the new Vice President of Sales and Marketing, encountered a sales and marketing team that had poor chemistry, were acting independently and in many cases not acting at all. Unilateral decisions by upper managment had left the team indifferent to anticipating customer needs, creating strategy and making decisions. It was time to regroup and instill desire to control the destiny of the business

Management had decided to flush the distribution channels with inventory, selling product at deep discounts and dating invoices. The automotive aftermarket for exhaust systems had been severely impacted by the OEM's transition to stainless steel exhaust cans, thus extending the life of original equipment. The retail do-it-yourself aftermarket was taking share from the traditional 2-3 step wholesale channels.

In order to stimulate discourse and progress, sales and marketing leaders and subordinates were aggressively engaged in open debate about the strengths and weaknesses of the business, inputs from customers were exchanged, and marketing was organizationally integrated with the channel sales teams. Efforts went forward to change the sales compensation systems to reward new business development, implement a good-better-best product strategy in the wholesale channels, introduce new exhaust product line for imports, increase coverage in the premium product line, rationalize pricing and coverage in catalytic converters, and enhance consumer promotions. Two under-performing wholesale channel organizations were collapsed and sales and marketing were pruned of under-performing and redundant individuals. Funded much-needed internal training staff.

Reduced layers of management and $7 million in overhead, just in the sales and marketing area. The good-better-best product strategy garnered new business contracts of $65 million over 3 years. Salvaged the NAPA customer relationship, protecting sales of $120 million and setting the stage for increased business.

Clarifying accountability and emphasizing cross-communications enabled the sales and marketing leaders to make decisions more quickly and restored pride in running the business.

The Sales, Service and Logistics organization was the front-end face to the customer on behalf of two large operating divisions. Combined sales were $700 million and served over 3000 diverse customers. This organizational approach was not sensitive enough to the various customer market segments and diverse needs of over 3000 customers. As General Manager, the need for customer segmentation and value pricing as a means for increasing sales, margin and market share was evident, and it was quickly addressed. This presentation was instrumental in launching a major organizational strategy shift to break up the current operating divisions and the front end organization into customer segment operating divisions.

Resistance and uncertainty surfaced in the field sales organization regarding how they would be deployed in the new organizational scheme. How would manufacturing assets be redeployed? How would customers feel about the segmentation? After all, was the reorganization not intended to provide customers with more exacting service? Day-to-day operations needed to proceed uninterrupted during the redesign and implementation of the new organization.

Created the benefits from action document to gain buy-in by the Sales and Service organization, and the manufacturing teams. Led the customer segmentation effort using buying behaviors, product mix, technology, and margin divisions to allocate customers into distinct groups. Established a large cross-functional team to complete the task of redeploying sales, marketing, product management and customer service functions into the customer-segmented divisions.

Created 6 stand-alone operating Divisions based on customer segmentation distinctions. Redeployed a 300-person Sales, Service and Logistics organization into the 6 operating Divisions. Overcame significant resistance in the Sales team, eventually rallying them and gaining their support. The process allowed for an assessment of current talent in field sales, marketing, product management and customer service leading to a much-needed pruning activity. This further resulted in a cost reduction of $500,000.

The customer-focused operating division format resulted in sales growth in each of the operating divisions and a composite growth of 8% over prior year in a 4% market growth backdrop. The new structure is still in place and has provided a keener view of critical success factors starting with the customer.

In the early 1990s, when "Total Quality Management" and SPC were making headlines in managment journals, IMTEC’s progress was sporadic and faltering. Senior and middle managers were skeptical of the team problem solving and decision making processes and empowerment principles. Introducing new process control techniques into manufacturing was viewed as time consuming and a useless diversion. Corporate officers approached with the challenge of re-igniting the TQM initiative and a desire to embed statistical techniques into the manufacturing arena. Future profitability and market reputation was at risk.

Old management culture viewed many of the manufacturing processes as "art" rather than science, further hindering progress. Management practices centered more on command and control and were less accepting of distributed decision making and team-based work.

A cross-functional planning team was created to establish a comprehensive plan that linked benefits to actions that touched every operation and functional discipline in the manufacturing, engineering, technology and quality areas. Established TQM as the umbrella initiative with problem solving techniques, employee involvement, and quality procedures as the critical elements for success. Well over 1000 employees were trained in team skills and problem solving techniques that emphasized the imperatives of data and facts.

SPC was implemented on critical processes, such as treating and lamination in all facilities worldwide. Successfully registered 6 North American and 2 international locations to ISO 9002 on schedule. Yield improved by 1.8% points resulting in $18 million cost reduction dropping to the bottom over the course of 2.5 years.

Emphasis on data and facts in the problem solving processes and incorporation of cross-functional teams introduced a very positive energy for taking on significant challenges. SPC and TQM were breakthroughs for IMTEC. The key to implementation was illustrating a clear connection between the effort and the payback at the individual level.

IMTEC had just completed the acquisition of a major competitor that would add $125 million in sales and 2 manufacturing locations. The company needed someone to assimilate and restructure the new acquisition from an operations perspective. Including the acquisition, the North American platform included 9 manufacturing sites. The newly acquired company came with an outdated manufacturing location in Southern California, comprised of 9 separate, non-integrated buildings located within a 10-mile periphery.

Acquired workforce in California was 99% Hispanic. The cost structure of this facility was 20% above accepted standards. In spite of the operational hindrances, customer reputation associated with this location was very high. Any abrupt disruption of this facility would result in loss of customer sales.

Assessment of the acquisition and post-acquisition due diligence led us to close the Southern Cal facilities. Transition plans were created to move product and customers to other existing facilities in the IMTEC network. Conducted open communications meetings with IMTEC Human Resources officers. Employee retention plans were put in place to ensure customer order fulfillment during the manufacturing transitions to other facilities. Marketing, manufacturing, and engineering teams were created to ensure customer transition needs were satisfied.

Southern Cal facility was successfully closed 2 months ahead of schedule, reducing overhead by $8.5 million, without any loss of customer sales. The largest military electronics customer associated with the acquisition, and threatening loss of business when the plant closure was first announced, was retained and complimentary of the transition.

Cross-functional teams and early, frequent communications with customers represent the clear enablers of this project’s success. In the end, having a single management decision maker protected customers, employees, and technology from risk.

The markets in Eastern Europe and the former Soviet Union were beginning to open up for western investment and penetration. Potentially large competitors as well as customers were evolving in these markets. IMTEC was interested in penetrating these new markets. In conjunction with the business renewal objectives in Western Europe, developing entree to the Eastern markets was pursued.

Language, culture, business practices, and government agency relations were all new and different for the management staff. Rules of engagement between business partners were only just developing.

Customer relationships were first developed by working through existing agency and distributor channels in Eastern Europe and the Soviet Union. Contacted government agencies in the Soviet Union to establish relationships and further understand the process for foreign direct investment. Conducted market research to determine the best approach toward penetrating eastern markets. The analysis pointed to establishing a joint venture with an existing laminate operation in the Soviet Union.

After months of business development efforts, a binding letter of intent was signed with the largest vertically integrated laminate operation in the Soviet Union. Moldavisolit was backward integrated in three of the critical raw materials in laminate production and had over 1 million square feet of production facility. IMTEC's investment was restricted to technology infusion, access to western markets, and hard currency foreign trade. The Soviet JV partner contributed access to the large local market, and raw material sources available for local production and export.

The letter of intent was signed leading to contract resolutions. IMTEC corporate visits were planned to Moldavisolit, Kazakhstan, in 1991. The integral visit was scheduled but cancelled at the last minute, as the trip was to occur on the very weekend of the Gorbachev coup. Despite progress and hard-won partnerships, all contact was lost thereafter.