Problem:

Two childhood friends start a business. Over the course of five years the business has grown but the revenue has plateaued. The overhead and revenue has increased each year but is not in step with the original ratio of overhead to revenue. Both owners are frustrated as this has stymied their long term goal which is to own multiple businesses. The owners spend a year cutting overhead and reducing staff. The removal of staff has caused the revenue to decrease significantly as panic has set in among the staff. The staff is sharing their concerns with vendors and referral partners effectively paralyzing new and current business.

Solution:

It began by interviewing the owners and understanding the long term goals of both partners. The owners’ goals were put into a written format. A meeting was called including all employees and owners. The owners’ long term goals were shared with the staff and the staff is able to vent frustrations and concerns about the decisions of the past year. The overall concern from the staff was that they did not understand the direction the company was moving and which role, if any, they will play in the future.

The staff and owners chose a committee to represent all departments of the company in the strategic planning process. The first day of the process all of the employees and owners are present to define and agree on a Mission and Vision statement that will radiate throughout the entire plan. Over the next 45 days, they met twice a week for 8 hours. First, they determined the strength, weakness, opportunities and threats of the business. Once established operational development including organizational charts, key result areas for each employee and key performance indicators are developed for each department. A training manual format and chapters became the focus of the next sessions which allowed them to discuss and implement organizational development strategies as training on the manual began.

Result:

The owners noticed a change of attitude in the staff the very afternoon of the first session discussing the Mission and Vision of the company. That collective sigh of relief was evident over the next 45 days as the planning committee relayed information to the staff and found that the owners and staff had a very similar agenda and expectations including hours worked and pay increases. As the sessions carried on a restructuring of the owners duties began to take shape and a board of directors was established allowing one owner to focus on the growth goals and the other to manage the day to day operations.

Lessons learned:

With the development of a strategic plan, the owners were able to clearly share their vision for the company and how important each employee is in the process. The employees became more productive knowing their role in the future of the company and having the ability to measure their performance without guessing if the owners felt the individual employee is effective.

A benefit to the staff understanding their role in the company is they began to share their belief in the company to the vendors and referral partners. This communication increased sales and attracted talented staff to add to the team as the revenue increased. Before the official roll out of the final plan the company had turned its sales around for the year and the second quarter became the highest grossing revenue to date.

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Author:

Robert Williams (rwilliams@aegisps.com)
Biography