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 5: CEO Coach or Food Fight Referee?

This is the fifth and final post in The 9Stucks Boot Camp Series.

These five posts illustrate a real example of a stuck project from start to finish. As I said in the first post (‘A Fresh Pair of Eyes’), when I began this project 20 years ago, I had no idea that StorageCo was stuck, nor had I done any thinking about the 9Stucks diagnostic. This was where I saw first hand many of the issues and patterns that would form the 9Stucks.

Food Fight

The project was nearing an end, so I began to share my findings and recommendations with the two owners – Pete (the CEO) and Susan, the EVP.

As I said in the third post (‘Logjams and the 80/20 Rule’), the Logjam product line was hurting the overall company performance. I told  the owners they should sell it. Pete (the CEO) basically agreed with me, but his sister Susan was very luke warm to the idea. Pete suggested that we all go to dinner to discuss the pro’s and con’s of selling the product line. We went to a popular, busy Italian restaurant a few miles from their offices.

This is where the fireworks started. Pete and Susan were sitting across from each other at the table (and I was to their side). As we talked about the potential sale of Logjam, they started to argue (loudly!). They ended up standing face to face at the table in the middle of the crowded restaurant yelling at each other. This was not going well…

The next morning one of the members of the Board of Directors called and asked “What did you say to them!!?” Since he was a long-time family friend, he was able to help diffuse the tension. Susan was being emotional about the Logjam line because it was the original part of the business founded by their grandfather. It was their most significant Sacred Cow. When we were able to get Susan to think with her head instead of just her heart, she became convinced that it was time to change the structure of the company.

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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 4: Go with the Flow(charting)

 

This is the fourth post in The 9Stucks Boot Camp Series.  The third post (‘Logjam and the 80/20 Rule’) identified StorageCo’s two most pressing challenges:

  1. a business model that generated unnecessary complexity, added costs and caused tension throughout the company and the leadership team
  2. plants, equipment, and processes that were old and inefficient
This post will cover the inefficient processes found throughout the company.

What is a Sideways Review?

A Sideways Review was something I did with a team at StorageCo. Years ago a sideways review was called flowcharting; flowcharting was replaced with re-engineering. One of the current terms for understanding the effectiveness of systems and processes is lean manufacturing.

When trying to understand the linkages among business processes within a company, the analysis work should investigate the Ins, the Outs, and Everything in Between. In other words, what activities does it take to book an order, book a consulting project, etc., and then get the product or service made and shipped.

How did we organize the Sideways Review?

We set up a cross-functional project team from the company, got some big rolls of brown paper, hung the sheets of paper on the walls and started to document all the processes at the company. Remember this project was done a number of years ago; ‘brown paper’ was state of the art!

The following chart shows how we organized the overall operations; these were divided up to facilitate that detailed, ‘horizontal’ review of the company. There were four main segments:

  • order processing
  • production planning
  • production
  • distribution

These four sections were then broken down into even more detail.

Notice how this graphic is organized by PROCESS layers (or MAJOR FUNCTIONS), not by DEPARTMENT. The company had many long-standing departments that were contained both within each of these process steps and departments that overlapped the process steps. Given this was a very old company, their organizational structure seemed to be put together more like additions being attached to an old house rather than like an organized remoldeling effort.

StorageCo had a tremendous number of large and small process issues that needed to be changed, eliminated, or replaced with better technology.  They also had ongoing, quality breakdowns in most areas of the plant.

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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 3: Logjams and the 80/20 Rule

StorageCo’s most pressing issues

The second post in The 9Stucks Boot Camp Series (‘An Eyeful and an Earful’) called out a number of StorageCo’s challenging issues (a real Stuck Salmagundi). Typically, there are problems that stand out and dominate all the others. StorageCo’s 2 biggest issues were:

  1. a business model that generated unnecessary complexity, added costs and caused tension throughout the company and the leadership team
  2. plants, equipment, and processes that were old and inefficient (this will be covered in the fourth/next post ‘Go with the Flow(charting)’)

Questions for you to consider are:

  • What is a business model?
  • Why is StorageCo’s business too complex?
  • What can be done to fix their business model?

The Business Model

A business model (i.e. the ‘guts of the business’) is the combination of operating entities, plants/locations, products or services, distribution channels, customers and the associated operational policies that support this unique mix. StorageCo had 2 plants and 4 product lines. For purposes of this discussion let’s call the product lines 1) Specialty, 2) Plain Vanilla, 3) Logjam (hint), and 4) Industrial. Summary product line sales, customer data and order data are highlighted in the chart below.

What makes StorageCo’s business model too complex?

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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 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 1: A Fresh Pair of Eyes

This is the first installment in the 9Stucks Boot Camp, a series of five blog posts that illustrate the diagnosis, treatment, and cure of a significantly stuck company.  This series is a stuck story from start to finish.

A consulting  engagement at this “StorageCo” company is where the ‘stuck’ concept was hatched over 20 years ago.

The five posts in this Series are:

  1. A Fresh Pair of Eyes: How the project started
  2. An Eyeful and an Earful: What I found after digging in
  3. Logjam and the 80/20 Rule: Discussion of StorageCo’s business model
  4. Go with the Flow(charting): The major business process issues
  5. Coach or Food Fight Referee: The Fixes

StorageCo wasn’t a troubled company, it was a stuck company. The company’s management team didn’t know they were stuck, and neither did I. When I began this project, the 9Stucks concept was not even a thought.  This project was how I started my own boot camp years ago.

You have used or seen this company’s products

StorageCo was a proud, 100-year old, third generation, family-owned business owned by a brother and a sister. They manufactured disposable storage products that are used and consumed by millions of Americans every year.

The siblings had been disappointed with the company’s overall performance for some time.  They finally decided it was time to bring in an independent outsider… a ‘fresh pair of eyes’ to do an objective review of the business and help them craft a performance improvement plan.

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