The Situation

Our client was a prominent Australian manufacturer in the primary industry sector with international operations. They recently acquired a New Zealand competitor to gain access to a niche manufacturing and client base that was highly profitable. The due diligence process had however highlighted an unsophisticated business support function to the extent that people, process and systems were inadequate to support the core business. 

 

They decided to adopt a hybrid approach of engaging several NZ based consultant organisations to work on various elements of the integration.  We were tasked to review the current organisation structure and address the issue around high employee turnover and help develop an employee retention strategy. Total staff numbered 16 with 10 in the core business led by a Chief Engineer. There were a further 6 in Business Support led by the General Manager.  The GM had a Finance Manager with a small transactional team of 3, an HR / Administrator and an Executive Assistant.

 

The GM had commenced the business 20 years prior and was very “hands on” in the engineering services area. Three Chief Engineers had joined and left the organisation within the last 5 years, although the team supporting the Chief Engineer was reasonably stable. The Finance Manager had been with the company for 10 years, but there was high turnover with his support team.  The General Manager was in his early 60’s and was approaching retirement.

 

Our Approach

Our business advisor interviewed all staff to ascertain what the key challenges facing the business were and specifically why people were leaving.

From this we determined:

• The Chief Engineer found the day-to-day involvement with the General Manager intrusive and counter productive with him often going direct to those on the shop floor to change things without consultation.

• The Finance Manager was frustrated with his lack of authority to spend money in Business Services to improve how they were doing things.

• The Executive Assistant was under-utilised and unmotivated.

• None of the staff had any idea of where the business was heading and their role in contributing to it.

• While a profit share scheme existed in the Engineering Services area, it was out of date and didn’t drive the right behaviours. For Business Support no profit share scheme nor KPI’s existed.

 

Client Outcomes

We identified that the General Manager was central to many of the frustrations in the business.  The new owners wanted to retain his knowledge within the business for a period of up to 3 years.

• We established an Advisory Board comprising the GM, an Executive from the New owners and a member of our team to provide commercial insight and business advice.

• The GM was phased out of the full-time involvement in the business over a period of 6 months.

• The Finance Manager was assessed for his leadership ability and promoted to General Manager.  His role was backfilled with a lower- level company accountant.

• A strategy and planning session was conducted with management involving all staff in the process.

• A business coach was appointed to develop a professional development plan for both the new General Manager and the Chief Engineer. That mentorship program continues to be ongoing.

• A new profit share scheme was developed for both the Engineering Services and Business Support functions, tied to quality KPI’s and output. Its aim was to be more transparent and help reduce employee turnover.

• Management also invested in cutting edge technologies to reduce processing backlogs and improve reporting timelines and efficiencies.

• The Executive Assistant role was outsourced and reduced to a part-time basis.

 

As a consequence, employee retention rates improved significantly, as did organisation culture, staff commitment and productivity, and company profitability.