InnerWork Team Building Case Study

This $100 million ARKEMA division had been experiencing a steady five-year loss of market share in all of their major product lines.  Competitors had made significant inroads in this division’s business, due to ill-timed price increases by the division’s former general manager, who had been terminated.  There was also a lack of customer focus on their key customer accounts, those 20% of the accounts that were providing them 80% of their top line revenue.

• Internally, the people felt they had experienced three years of  “losing ground” in their industry.  The performance atmosphere and employee language was filled with “victim” language, and “we are failing” interpretations of their situation.
• Also, there were divisive, conflict-laden internal employee relationships, poor cross-functional teamwork, and fear about the new general manager recently appointed, whose job was to effect a “turn-around”.  Many people feared for their jobs as well.

Our team met with this new leader, who was one of the company’s most progressive and people-oriented leaders. His analysis was that his products and pricing were more than competitive, but the level of individual employee engagement and collaborative, cross functional team performance was not sufficient to win new business or even protect the business the division had.

“We need a total mind-set change, a transformation,” he said. “And we need a way to get cross functional high performance teamwork going on with our best customer accounts.  Failure is NOT an option.  France will likely sell the division if we have another bad year”.

The Challenge

This leader knew that the turn around was not going to happen only about lowering prices or improving his product performance.  He knew it had to be about radically changing individual, team and organizational performance.

This leader intuitively understood that higher levels of self performance and team performance would help him achieve much better business results—-if he could focus higher service levels on his key accounts.

Together, we designed an integral change process for the division that would focus on self-change, team change, and organizational change—simultaneously.  In this way, this leader and his managers, and all the employees would have a good chance of returning the division to its former profitability and market leadership.

• At the core of this project was the need to produce significant individual “mind-set” behavior change and gain full engagement from each employee, as well as the managers, so that their “high performance teams” could function and collaborate in high-performing, customer-centered ways.
• High performing teams are always based on higher-performing individuals who are willing to see what they personally need to do to “change from the Inside Out”.

The Solution: Integral Change 

InnerWork recommended that the general manager segment the division’s customer base into “A” level, high-priority accounts currently under contract, and identify key customer accounts in their four major markets to “win” away from competitors.

This segmentation was the basis for a Business Development Plan whose core strategy was the implementation of “Key Account Teams” to “out service” their competition and gain share, rather than gain share by cutting price.

The rationale was that if the majority of these accounts were under contract eventually, market share and profitability would be restored.

• And so, five “Key Account Teams” were formed, made up of Sales, Marketing, Technical Service, Customer Service, and Research.  Two of these “account teams” were organized to strategize and capture prospective key accounts away from their competition.
• Also, three manufacturing teams were formed to optimize plant productivity and increase product throughput, because it was felt that if the account teams were successful over a one-year period, the division needed to have the capacity to meet new levels of customer and market demand.

Initially, there was resistance to forming “key account teams” due to the low morale and internal conflict.  Some employees—particularly a few tenured “old school” sales people—felt it would be “impossible” to work in cross functional account teams with technical people.

The general manager explained the change process that he was seeking from them one more time.  When these sales people continued to resist, he fired them, which sent a clear message across the division that the leader was committed and uncompromising about the needed transformation.  Everybody was expected to understand and engage the necessary changes required at a personal level, team level, and at the organizational level—no exceptions.

Working with the general manager, we decided to highlight for the teams the actual business measures too.  If these metrics began to move on a per account basis, this would verify that there were positive changes underway in the transformation.

And so, each cross functional, key account team had specific goals:

• significantly increase customer service and focus in key accounts
• increase revenue and account share in the existing key accounts
• increase revenue through the acquisition of new “A” level key accounts
• decrease operating costs through cost-reduction solutions with the key accounts
• support the division in gaining the number one market share position in all four markets; and
• increase manufacturing throughput and capacity with minimal capital expense on plant improvements

The Integral Change project was launched, and central to the design was a curriculum of integrated Self Change, Team Change, and Business Change programs delivered to the teams in four two-day sessions over a six month period.

In between the training sessions, our change consultants served as a team coaches and facilitators for the account teams, and helped launch their trust building, communication and meeting management processes, as well as facilitating detailed business and action plans on their accounts.

• Within three months, these teams began to demonstrate new leadership and high performance teamwork behaviors to a high degree on both their existing and high-priority prospect accounts.
• In many cases, our firm worked with each team’s Sales leader to position and facilitate cross-company team development meetings with their best customers, where we helped both companies clarify mutual expectations, and build new levels of trust and relationships at multiple levels and functions in the accounts.
• InnerWork senior performance consultants facilitated these joint cross-company teams to co-develop “Account Service Plans” to meet their customer’s most pressing needs, which delighted the accounts.
• These efforts began to pay off in dramatic ways, and caught their competitors completely by surprise.

The Results

Leadership emerged at all levels, and communication and support began to flow significantly between the functions as they serviced the key accounts as a “multi-disciplinary team of experts” dedicated to their customers concerns and needs.

• The customers were so pleased with this multi-disciplinary team service approach, they began to shift larger and larger amounts of business to the division.
• Manufacturing kept pace with the increased demand, and the prospect account teams landed one new account after another.

Also, a culture of “high performance teamwork” became the normative way of working in the division.  Over time, little by little, “win” after “win”, the team members realized they would never go back to their old ways and patterns.

Within nine months, the division had produced the following results:

• a $17 million increase in new sales for a $100 million division
• a $3 million decrease in operating costs (mainly through reduced shipping / logistical costs)
• a $12.5 million gross margin return on the above two financial results
• a 50% increase in manufacturing throughput with only a minor amount of capital expense
• the establishment of 15 high performance Key Account Teams characterized by high levels of trust, leadership, support, communication, accountability, and commitment

Moreover, what was particularly striking about the “prospect” account teams was that, because they focused on and captured large “A” level accounts away from competitors, this quickly helped the division regain the No. 1 position in three of their four markets, and No. 2 in the fourth market.

These market share gains have been sustainable too because of the increased loyalty, preference, and relationships built between the customers and their preferred suppliers.

After the nine-month period, and for a two-year period after the project, the division had 100% key account retention rate, meaning they lost no accounts to their competitors, and continued in many cases to increase share and position in these accounts. This year-over-year profitability and market share gain has kept them in the dominant market position even today.

Throughout the Integral Change project, each individual employee gained a deeper perspective about how their own inner leadership change and transformation is linked to superior team and organization performance.

They realized the deep power of working collaboratively in teams, both internally and with external customers. They experienced what it meant to have a strong competitive advantage based on their internal network of relationships and expertise they could bring to bear on solving customer problems and providing value-adding solutions.

Indeed, the general manager remarked how much fun and fulfillment he was having by being of true service to others and guiding the transformation.  He said: “I can truly lead this division now, and have more time to think strategically.  I don’t have to deal with all the personnel issues and in-fighting we had when I took over.  I have many leaders now at all levels, and they are leading with me.”

POST SCRIPT

The Wall Street Journal

“One $100 million division of Arkema, North America Inc., part of the French oil and chemical company Total Fina, credits The InnerWork Company with saving it as much as $3 million in operating costs, and increasing sales by $17 million in less than one year, by showing people how to be more inspired about work and how to function as high performance teams”.