Cases

Diagnostics findings

  • The company has set broad goals of growth, whereas the directions of the company’s further development were not clearly defined.
  • The company had an issue of micromanagement and lack of clear responsibility spread among its branches and down the organizational hierarchy.
  • Lack of structured compensation and promotion systems resulted in fragmented motivation and high turnover of mid-level management.

 

Key recommendations

  • Proposed a number of strategic options to set a development vision plan in a 2-3 years perspective synchronized with market developments.
  • Set up cascaded measurable responsibility sharing system through project management levels.
  • Reform the organizational structure and responsibility sharing system. Improve the communication among the numerous organizational units.
  • Introduce performance evaluation system, grading and skills assessment processes.

Diagnostics findings

  • The management of the business unit had an operational planning of only one year, mainly focused on only one of the business directions.
  • The business unit managers used numerous resource planning software programs, not integrated to each other, which caused major inefficiencies.
  • The bureaucratic hassle and complex paperwork requirements were found to be a bottleneck to efficient business processes.
  • The KPI system was in place only on corporate level, and not cascaded down to management.

Key recommendations

  • Extend the operational planning time horizon to 3-5 years, which would efficiently link the operational planning to company strategy.
  • Transform the organizational structure to product based format, centering the product based responsibilities and processes in one place.
  • Install an integrated ERP system connecting all the small software pieces used by the different departments of the company.
  • Introduce cascaded KPI system linking with the bonus and motivation system for the managers.

Diagnostics findings

  • The company suffered from classic syndrome of owner’s “withdrawal” from day-to-day management. The shareholder engagement was sporadic and disordered, leading to suboptimal decisions.
  • Strong internal control department (“eye of the owner”) often interfered in the affairs of executive departments.
  • The company had a significant efficiency problem, with decreasing margins due to overstaffed departments and low level of automation in reporting systems.
  • The staff motivation was low, employee turnover high for some units due to unclear responsibility sharing.

Our work results

After diagnostics we received a large performance improvement mandate. We helped them to:

  • Introduce a modern system of corporate governance
  • Redesign and optimize the organizational structure
  • Cut the total headcount by 10%
  • Develop and execute KPI system on corporate and departmental levels
  • Launch the process of establishing a modern ERP system

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