Michael was part of a transformational process nearly five years ago when ownership of the consulting service he worked for asked him to step into one of their facilities that was intended to generate $6 million in annual sales but was operating below budgeted levels by nearly 18%. Previous leadership had chosen to accept poor results as the status quo and resisted considering changes. He was directed to reverse declining sales, improve customer reviews, and stabilize employee tenure in the face of expanding turnover.
Immediately, Michael gathered and analyzed as many metrics as possible to isolate the primary areas of failure. To the staff, he demonstrated a change in management attitude by suggesting modifications in processes and procedures and showing an eagerness to accept open and confidential feedback from team members. “Along with staff input, I devised and installed technical training and mentorship programs emphasizing cross-functional communication and personal development,” said Basanta.
Michael Basanta, Director of Operations / Senior Consultant
Simultaneously, he initiated an immediate reduction in all but mandatory spending and mobilized all employees in a waste-reduction crusade to chip away at even minor expenses. “I restructured purchasing, receiving, and handling routines and introduced inventory analysis and the practice of internal logistics. I also moved to cut back the inventory by mentoring buyers on how to purchase only the minimums needed while sustaining proper operations.”
“Since labor cost was also a significant contributor to the profit shortfall, I revamped many work assignments and adjusted scheduling matrices to increase worker efficiency. I inaugurated a recruiting strategy focused on building a diverse talent pool augmented with training to boost retention and mature staff proficiencies,” Basanta said.
By establishing a sense of compassion and relatedness with the staff, Michael acknowledged the context in which this facility was operating, as that of a money pit, ready to close its doors in three to six months if nothing changed. As John Burk said, “leaders must develop a compelling narrative to make a case for change as a necessary part of leading organizations through change management processes.” (Burk, 2020) Michael fostered that narrative with a sense of compassion and relatedness towards the staff by utilizing active listening skills. “I elicited feedback, criticisms, opinions, or concerns from staff who finally understood they would be free from retaliation, retribution, and punishment. I also took this valuable opportunity to clarify organizational goals and negotiate acceptance with direct reports. I established the concept of periodic performance reviews to reinforce individual accountability for their results.” Basanta said.
By controlling inventory procedures, reorganizing operations, applying quantitative planning, aggressive waste reduction, lean purchasing techniques, and continually training section managers, Michael’s effort raised profitability by three percentage points for each of the succeeding nine months. Sales rose 35%, and operating costs shrunk by 10% while the retention rate reached a record 97%. This modification in the facility’s operating procedures empowered the staff to effect the change they sought and instilled a sense of autonomy, relatedness, and competence, bolstering overall efficiency.
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