What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

Part 2: An Eyeful and an Earful

What I saw, what I heard…

The first post (‘A Fresh Pair of Eyes’) in The 9Stucks Boot Camp Series ended with me getting the approval for a large scale integrated consulting assignment at StorageCo.  This is the second post in the series. It will cover what I started to see and hear once the project started.

Walt Disney once said: “The way to get started is to quit talking and begin doing.”

So, that was what I did – I began doing. Digging in at PaperCo meant that I was a sponge:

  • met with many people in all functions of the company
  • gathered all kinds of paper and reports
  • absorbed data, crunched numbers, then got more data
  • soaked up the atmosphere around the plants
  • watched the products being made
  • took notes and documented what I heard

Remember, I heard these themes from Pete (the CEO) and his brother Jack in my ‘pre-proposal’ meetings:

  1. “we have a cost problem
  2. we need an objective outsider to do an in-depth look at the business
  3. the company had limited growth and marginal profits over many years
  4. most of the personal assets of the aging family owners were tied up in the business

What I found after digging in

What I had heard and what I found were really not close

There was a significant mix of stuck stuff that had accumulated over the years…after all, StorageCo was 100 years old! Here is a long, but not complete, inventory of issues:

  1. Family conflict over business focus and direction
  2. Struggles over how to transition to the 4th generation of family
  3. Overall management team lacked key skills in important areas
  4. Poor communication throughout the company
  5. Incentive systems only set up for a few employees
  6. Rapidly changing industry and customer needs
  7. Taking customers for granted
  8. Not attentive to changing operational needs of customers (i.e delivery, quality expectations)
  9. 3 of 5 product lines were flat and had tired products
  10. 3 of 5 product lines had low profitability (80/20 analysis)
  11. A high potential growth segment was not getting enough people or $ resources
  12. Multiple product lines created unnecessary complexity.
  13. The overall business model created conflict among family members, added to the cost structure and pulled resources from more profitable product lines
  14. The senior lender was upset with poor cash flow, growing inventories, low profits
  15. High capital expense requirements for ongoing maintenance and new equipment needed to remain competitive
  16. Hostile union
  17. Outdated, inefficient plant
  18. Old systems
  19. Business processes and controls that did not meet new customer expectations
  20. Lots of sacred cows:
  • Company’s original, slowly growing product lines were supposedly untouchable
  • A long time, senior employee was disruptive and unproductive
  • Family members in wrong roles

Now what? How would you start fixing this place?

Hint: The ‘signature issues’ that needed to be fixed were related to:

  • the complex business model: numbers 9-13 (shown in red)
  • the inefficient plant, broken business processes and outdated equipment: numbers 17-19 (shown in blue)

The third and fourth posts in The 9Stucks Boot Camp Series will expand on the significance of each of these ‘signature’ issues (and what to do about them).