Takt-ical Leadership – The (mostly) True (excerpted) Story

“Good morning Mr. Puls!” The front desk attendant interrupted her data input work instantly when I gave her my name. “I know the leadership team is anxiously awaiting your arrival. Please, you don’t need to sign the guest register, after all, you are our new president.”

She immediately picked up the desk phone and punched in an extension number. “Hello Maria, Mr. Puls is here. Should I show him to the conference room?” there was a short pause as she listened to the answer. “Very well, thank you.”

“This way please.” She led me down a long hall, adorned with framed photos of long-term employees, customer appreciation awards, and community recognitions. I looked at them with interest as we went by, on our way to a vacant conference room.

“Can I get you some coffee?” She asked pleasantly.

“Please do, and if you have it in IV form, just go ahead and plug me in.” She chuckled at my comment.

Unfortunately for the current team, all of this customer goodwill was in the past, the newest award going on four years old. The business had been on a downhill slide for some time and at this point was truly at risk to lose come major accounts.

It would be my third turnaround from the leadership chair, having spent much of my prior career resolving business-critical issues such as scaling capacity to meet increasing market demand, cleaning up quality spills, replacing problem suppliers, and developing and implementing complex worldwide footprint strategies. Managing and deploying an appropriately paced sense of urgency comes easily to me, but based on what I’d learned during and after the interview process, this transformation would be a real test.

DFC-P Products Inc., with over $400M in revenue was besieged with both customer complaints and labor challenges, and was losing accounts quickly as a consequence of poor customer service. Somewhere along the way, they had lost their commitment to fulfilling their mission of delivering high quality products to their customers’ expectations. Clearly disconnected from their market, they would need some serious “Lean Thinking” applied to their processes in order to get things moving forward again. Currently, their perspective was turned inward, tracking metrics that were more effective at rationalizing their poor performance rather than at meeting the expectations being demanded by the customers. Even their strategies regarding production and sales seemed to be in denial of the market itself.

I was doing this introduction alone, with the hiring manager based in Europe and unable to make it here in time. As I looked at some of their policy documents and metrics hanging on the wall, the management team members began to drift in to meet me.

“Hello, I’m Maria Adams, your Director of Human Resources.

“And I’m Geoff Little, head of Operations. With me is Dick Schuster, our game show host, I mean Vice President of Sales.”

Dick gave him a light shove in shoulder for gigging him that way. “If I’m in charge of the game, at least it isn’t a stoplight fire drill like the one in operations.” Geoff was mute to that return shot.

“I’m Janet Kim, director of Supply Chain and Materials.

“Very pleased to meet you Janet, I’ve heard a lot of good things about you.”

“I’m better late than never, John Riley, VP of Engineering!”

“And I’m just pleased to have you here.” I responded warmly. “My challenge for the coming weeks is to help you achieve an immediate impact on our quality and customer service levels. At the same time, we’ll do a budget assessment to see how far off we really are. I’m looking forward to getting to know all of you, and plan to meet privately with each of you over the next few days to hear your views on the causes of these severe performance problems. Once we have all talked individually, I’ll digest what I’ve heard, rephrase the details to preserve confidentiality, and feed a summary back to you as a team. We should then be better equipped to determine our best course of corrective action. It’s critically important that you are open and honest about the problems, or else we’ll waste time pursuing the wrong solutions. Until then, are there any questions?”

 “Do you anticipate making any immediate changes?” asked Maria.

“Yes, to some of our processes – mostly to get containment around they key customer issues. Nothing with people at this time though. It’s essential for the entire organization to develop confidence in this team and in me, because we’ll really need everyone’s trust going forward. What that means is, we can’t afford to flail around and make mistakes out of haste.

“I will want us to focus very hard on both the plan and the message. Once the interview process is complete, we’ll all agree to a plan which can be executed with the appropriate urgency. That said, however, some changes are inevitable. Are there other questions?”

There was a nervousness about the room, and since there were no takers for my second offer, we put together a schedule for the individual interviews before adjourning. 

A week later, we met for our first staff meeting to review the interview results. It seemed as if the team was a bit nervous, unsure of how their input would be used or how candidly my summary of my input might be. They were in for a surprise.

During the interview process, the team was unanimous in indicating that the company wasn’t servicing their customers adequately nor fulfilling the commitments we were making to them. Our market research also confirmed the fact that we weren’t delivering what they wanted or expected. As I engaged the team in a standard “Five Why” approach to our market issues, the input that the various team members had confidentially given me was selectively interjected. Not only did this keep the conversation stimulated, but it helped us narrow the list of root causes so that we could proceed toward addressing the primary issues.

“Why are customer service levels so poor?” I asked.

“Because their demand is so erratic that we can’t forecast it properly,” Geoff, the operations director, said.

“Well, yeah, but even if we forecast it correctly,” injected Janet, our Director of Materials, “our manufacturing time is longer than the market lead time allows anyway.”

I asked, “What is the market lead time?”

“Usually about sixteen weeks,” said Dick, VP of Sales.

“Says who? How do we know?”

Dick looked somewhat confused. “Uh, because that’s the lead time our competitors quote. It’s kind of always been that way.”

“Really? Okay, back up a minute.” I paused. “Do we always quote 16 weeks?”

“Yes, we do,” Dick stated flatly, as though this was common knowledge. “Well, most of the time we do. Sometimes we’ll take an expedite order and push it through.”

“I’m aware that a number of our products are custom built. Can anyone tell me what percentage?”

Dick shrugged. “One hundred percent. Shoot, everything we do is custom.”

I looked over at John, our VP of Engineering. “Does that mean your people touch every order? Geesh, what’s your typical process time?”

“Some things can be done in a week, but others can take up to a month. It all depends on the product, the customer request, and the level of engineering required.”

I weighed that for a moment. “If every order is custom to some degree, then are they just custom-assembled, or do they require specially designed parts as well?”

“Special parts are often required and usually have two-to-four weeks of procurement time. We have some pretty responsive local suppliers,” Janet answered.

I turned to her. “What are the longest lead-time parts we buy for our products?”

“It’s the Asian stuff, so count on six months for steel foundry castings and around eighteen months on proprietary subassemblies.”

I tapped a few notes to myself on my tablet. “Okay, Geoff, can you give me some kind of idea what your manufacturing time is like?”

“What, for normal runs? Sure. Usually, we can complete Product A in four weeks if it has minimal customization. Product C is always customized and can take up to twenty-six weeks to make and ship.”

I sat quietly for a moment, writing more notes and organizing my thoughts. Finally, I looked up at the whole team. “So, if we take one to four weeks to engineer an order, then two weeks to eighteen months to buy the stuff that goes in our products without using a forecast, and finally four to twenty-six weeks to produce it, how on earth do we deliver anything in the sixteen weeks quoted?”

“We don’t,” Dick answered, somewhat sheepishly. “Leastwise, not very often.”

“How often?” I asked him pointedly.

He swallowed. “Well…uh…other than the standard versions of product A, I can’t remember the last time we did so.”

I looked from one face to the next around the table. “Are you serious? Then why on earth do we quote it that way?”

“Have to,” his tone was getting defensive. “If we didn’t, we wouldn’t get the order!”

I just stared at him, clearly taken aback. “What do our distribution partners think about us then?”

“Honestly, they think we’re pretty incompetent. The only thing that keeps them coming back to us is the reputation of the equipment we build,” Dick added.

“Okay, let’s go back to why. Why are our customer service levels so poor? How did this happen?”

“Our systems are broken!” Maria from Human Resources said, jumping into the fray. Her flushed cheeks matched her curly red hair. She had been reticent to talk to me at first during our private appointment, but once I’d gained her confidence, she became a bit more comfortable, rattling off a checklist of things that had been bothering her for a long time. She wasn’t trying to be a troublemaker. She had given fourteen years to the company and was fiercely loyal to it. Seeing it flounder was upsetting to her personally and professionally.

“Thanks for that blunt honesty, Maria. I think your confession of reality just opened a door that may lead to some potential answers for us. Okay, I want the same from the rest of you. We’re behind closed doors, and no one is recording us, so go ahead and put the elephant on the table.”

Walking through the remaining “whys” took a couple of hours, and I could see the frustration and concern building in each of them. However, at the same time, we were successfully narrowing down to our top priority: to restore our former high-quality customer service. Ultimately, it became obvious to everyone in that room that if our company couldn’t make good on its commitments to delivery schedules, production excellence, and follow-up service, nothing else mattered. Without satisfied customers, none of the other stuff made a bit of difference. On that, we agreed, and having formed that consensus, I gave them a two-hour break to grab some lunch and to check in at their offices. At the same time, they were asked to mull over what we’d covered that morning and to come back in the afternoon with additional comments, suggestions, or even rebuttals.  

You can read more in the book "Takt-ical Leadership" by Lowell J Puls. All rights reserved.

"Takt-ical Leadership" is available now through Authorhouse and Amazon.

ISBN 978-1-5462-7044-7 Softcover / ISBN 978-1-5462-7194-9 Hardcover