When the pandemic, market pressures, and an unexpected health crisis for the owner threatened the viability of an already under-performing manufacturing business, this company’s banker voiced concern that the aging, disengaged entrepreneur needed some help and guidance.
Acting on their banker’s referral, the client brought in Kevin Jansen of Mayhill Consulting to serve as a change agent and temporary President as family relationships and biases were clouding prudent decision making.
The leadership team consisted of three executive level positions that reported to the absentee owner. Two of the owner’s children were members of the leadership team and they had poor interpersonal relationship skills and resisted collaboration. The company lacked performance goals at the corporate and individual levels, with the owner retaining control of most day-to-day and strategic decisions despite limited engagement in the business.
Buyer expectations was shifting away from this client’s product line. Covid-related shutdowns also impacted the client’s customer base, further diminishing market demand.
An easily copied product concept and low-cost opportunities to innovate product improvements had left the door open for disruptors and industry newcomers.
New product development was absent as the company had become a processor of low margin orders rather than an innovator.
As competitors wisely invested in software and automated equipment to drive production efficiencies, the owner and family members were complacent in exploring these options.
The business owner had a deep, keen understanding of the business and its product lines, enabling him to trouble-shoot and solve virtually any operational issues. As his attention to the company waned, the business lost its main creative presence.
The company had cultivated a loyal following of buyer relationships over many years. While these customers continued to purchase, they were buying smaller, non-standard, unit volumes per order.
For ten years running, the company had struggled to break even. Rather than diagnose or correct the issues, the owner had a history of making personal cash infusions to cover expenses.
Mayhill devised a plan to rebuild management functionality, improve financial stability and enable the owner to temporarily relinquish control to turn his attention to his critical health issues with confidence. Action items:
By the end of the four-month engagement, Kevin was able to hand the President role back to the owner with all six steps completed successfully, giving the company urgently needed stability and a roadmap to move forward.