Rapid Change: Lessons Learned in Real Time

John Walsh
Sypris Electronics, LLC, Tampa, FL, USA

Brian Maguire
Veracity Consulting, Simsbury, CT, USA

Steve Puente
Puente HR, Laguna Hills, CA, USA

You have 12 months to double productivity, grow sales and fill the new product pipeline. How would you do it? Would you bet your job on meeting these objectives? A team at Sypris Electronics did it and kept their jobs.

The odds were stacked against success. Poor performance threatened to push away key customers. Shrinking sales made it impossible to cut costs fast enough to hit profit targets. Great product technology and engineering prowess was going to waste because it was mired in development issues and an internal focus. Veteran employees were fully engaged, but in the wrong activities to turn the tide. The organization lacked leadership and vision, was silo-based, and had experienced significant turnover at all levels. Many past failed improvement attempts created a "plaque of skepticism" about investing in one more try. A talented workforce looked poised to lose their jobs.

Using a unique combination of leadership concepts, tools and teamwork, a CEO and his team transformed a fading company. Since the timeline was short, the "tires had to be changed while the car was going down the highway at 60MPH" and mistakes were corrected in real time. This is a lessons learned account of how to achieve rapid company transformation by a team that rolled up their sleeves and got their hands dirty.

The results speak for themselves. Over a period of 17 months, this team: reduced the factory footprint by over 60%; improved production cycle time by 70%; increased customer on-time delivery by 88%; reduced scrap and rework by 70%; drove productivity 61% by reducing direct costs and overheads, and increasing throughput (velocity) through the plant; reduced inventory by 60% and increased turns by 300%; eliminated past due backlog; implemented aNew Product Development & Launch process and successfully launched several new products; redesigned products to improve cost; infused new technology via strategic partnerships & technology product mapping; implemented an MRP/ERP system and metrics-based reporting; restructured around value streams while implementing Hoshin policy deployment and goal alignment; developed a continuous improvement performance-based culture focused on best practices, accountability, teamwork and speed (BATS); and, developed a long term strategic direction for the company. Internal product sales grew 52% while operating results improved greater than 300%.

Business Transformation is a long journey that takes a good approach and persistence. We have come across some key lessons that should improve the odds of success:

1.Create a compelling vision and burning platform. Articulate a clear path by using Transformation Maps as a tool to communicate with the organization. Create new burning platforms to renew the effort.
2.For the Transformation to succeed, the Leadership Team must be mobilized and committed to create a high performing culture. In concert with this, it is vitalto assess the people and get them in the right roles. If necessary, new talent should be brought into the organization. Since this takes time to accomplish, understanding the need to do this must be one of the first actions taken.
3.Make Leadership behavior tangible and measurable through a BATS-like process. Actively coach and mentor leaders to create a high performing culture.
4.Apply a comprehensive, systemic approach to Transformation that develops people, culture, process and infrastructure. Often, people and culture issues are handled late in the Transformation, after the people issues have become a drag on the effort.
5.Use the Baseline Process to establish Stakeholder ownership and advocacy for the effort, and to align the organization around "one plan". This creates the capacity to "go to the next level" because change agency is shared and not centered on one senior leader.
6.Institutionalize critical thinking and the scientific method for solving problems.
7.Use Goal deployment and Improvement Governance as mechanisms to mentor the organization.