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. Scene setting – Entrepreneurial growth ‘Success then Acute pain’2. Co dependency and Change management failure3. Creating the right environment to release the potential within4. Building trust using ‘Champions and Catalysts’5. Using MAS to ‘Survive and Thrive’

Create the conditions which allow for talent releaseThen and only then, can your employees reach their potential

Baerlocher UK LimitedA brief history : 1973 - 2011

UK Sales agency, Dorking, SurreyFounded 1973 – Office Closed 1990

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

Production, Sales, Laboratory, WarehouseEstablished 1996 in Bury

• 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

Revenues and Employee numbers follow same trend

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Business and Employee growth over the past 25 years

Entrepreneurial ‘start up’ period Manufacturing Acute Pain Survive and Thrive

Most Commonly found where:-Start up’s : 4-5 yrs of Trading10-50 employees Young senior management (<50)YOY Profit growth >20%<5% Staff churnEmployees highly motivated and satisfied

Employee Satisfaction and Success

(Vodafone UK’s ‘Working Nation’ survey 2006)

The 7 common traits of a successful business(best financials and highest employee satisfaction)

Leaders (Not Followers)Risk Taking (Not Cautious)InnovativeDiversifiedClear Single IdentityEarly AdoptersLong Term strategists

Between 1989 – 1996, these were the traits of Baerlocher UKA highly successful customer orientated selling organisation

Power culture, play hard work hardLead by an entrepreneurial style

High level of Autonomy – Sponsored by Company owners

So successful that in

1994 – £2.5m Investment

In Manufacturing ….

Employees and Departures 1987 - 2011

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Boost in profits follows and further £1m invested in 2000BUT – promised growth turns into decline in parallel with employee departures

Departures 1996 - 200760% in Manufacturing/Lab

40% in Sales/Admin/Management70% LEFT ‘FOR ANOTHER JOB’

2008 - 7 Voluntary Redundancies,

1 Death, 1 Planned retirement

Early growth years – few staff changes

Entrepreneurial ‘start up’ period Manufacturing Acute Pain Survive and Thrive

Organisational development – starting manufacturingOpportunity lost – Manufacturing was ‘bolted on’ rather than integrated

FINANCE & ADMINISTRATION

TECHNICAL

MANAGINGDIRECTOR

SALES

EXTERNALS(WAREHOUSING)

INDUSTRYNETWORK

PARENT COMPANY

(MANAGEMENT)

CUSTOMERSERVICE

KEYCUSTOMERS

SITE MANAGER

PRODUCTIONQUALITY

MANAGEMENT

PARENTCOMPANY

PRODUCTION

SUPPLIERS

SITEMANAGEMENT

INVENTORY TRANSPORT

HEALTH &SAFETY

‘STAFF (THEM)’ ‘WORKS (US)’

The Site Manager was a self made entrepreneur from the same industryTWO SPIDERS totally controlling their respective webs

COMMAND AND CONTROL management style across the companyEach SPIDER protects the other locally and with the parent company

The dark side of entrepreneurial managementCreating 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

CompetingComparing ComplainingCriticising

Security is sought from sources outside the individual becausethey are co dependent with their environment, they engage indestructive, cancerous behaviours.

Almost impossible to deliver high quality to customersAnd we struggled to recruit key staff from the marketplace

2001 - 2003 Management demand ChangeBut the Change management initiatives fails

Outcomes :- Failure blamed on sales and technical functionsManagement 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 failingsLearned incompetence prevails, survivors know how to survive

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

What most people actually want(Stephen Covey – the 8th habit from effectiveness to greatness)

MIND

BODY

HEART SPIRIT

Use me creatively

Pay m

e fai

rly

Treat me kindly

SERVING HUMANNEEDS IN

PRINCIPLEDWAYS

‘Amongst SME leaders and Large,corporate company leaders, strong workforce engagement is perceivedto be the single most importantattribute of a successful business’

(Vodafone UK’s ‘Working Nation’ survey 2006)

People have choices

Rebel or Quit

Malicious obedience

Willing compliance

Cheerful co-operation

Heartfelt co-operation

Creative excitement

Tackling the issues to create sustainable changeESSENTIAL 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

Say it how it is

Say what you are going to do

Don’t conceal the truths

…and just do it

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 hopesstand a chance of being met’

Champions and CatalystsCan 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 changeAn 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

Several ‘Champions’ from different departments and levels creates a

Guiding coalition for change

A Champion – a leader or leaders who champion and ‘sell the idea’Generally promotes the cause, leading onward, vision, purpose, integrity

With the right environment we can turn the triangleWhen the true leaders job is done, people will say ‘we did it ourselves’

Catalysts, Champions,

TRUST

Operator

Team Leader

Supervisor

Manager

Dir

Dir

Manager

Supervisor

Team Leader

OperatorInstruct & Command

SupportTheProcess

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

Using MAS and Manufacturing Institute as ‘catalysts’

We have Survived and are ThrivingIn spite of the massive drop in UK construction products demand

• 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

• 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

Skills and Talent WorkshopThe outcomes of what we have achieved for our employees

Absenteeism - 1.5% in 2007, 0.3% 2010Staff 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

Thank you for your

Attention

Any questions?