Case Study

Parag.: 1	SET is a privately-owned business that enjoyed steady and sustained growth throughout after it was formed in 1997 by recognising a niche in the market using specialist knowledge put forward one member of staff.  After a five-year period, the company reached a plateau and performance began to decline, following the product life cycle projections.
Parag.: 2	The company had become dependent on one major customer and was chaired, part-time by a local dignitary with significant outside interests; he was looking to withdraw his capital from the business.  “This company has run its course, it should be sold, then we can all get out with some return, I want to concentrate on my family business and personal interests,” was a board meeting comment from the chairman.
Parag.: 3	Other senior staff had failed to secure additional business as the tender period to bid for retention of the core business approached.   “This situation is outside my experience, I feel we are very dependent on one customer, nobody goes out selling, we are a recycling business and that is a growing area, people expect it to happen – but we are not making it happen,” said the environmental technician.
Parag.: 4	One manager had previously worked for SET’s dominant customer before taking early retirement.  He said: “I helped in the original tender, but it is up for renewal.  The processes have become more automated and sophisticated and I think we will have to present and negotiate next time around.  We need a recognised industry standard to support our bid, we need a senior manager with authority and credibility, the company has grown – it’s not just a husband-and-wife operation anymore – it won’t survive in the present format for long – it’s alright for me, I’ve got my pension.”
Parag.: 5	Operations staff had been recruited without a formal interview held in the office, by the field manager.  Induction and training were limited and contributed to recording errors and subsequent invoicing errors.  The field manager said: “I need to replace staff quickly, at times other staff will recommend a friend or relative, it’s an easy way to get someone into the vacancy.”
Parag.: 6	Administration and finance were headed up by the managing director’s wife who had previously worked in clerical positions and as the company developed it was a classic case of position power, with erratic time-keeping and retaining the sole authorized cheque signatory.    Her management style oscillated from being close and friendly, to distant and remote and the office staff gauged her approach on a daily basis, reacting accordingly.   There was no training and development for the staff and the systems management resulted in duplication and poor record-keeping.
Parag.: 7	Turnover in 2000 had peaked at €5 million and the company employed 25 staff all working from an outdated though spacious site on Seedhead docks containing office accommodation, parking, tank washing equipment, and separation tanks.   Very limited resources had been allocated to company branding and marketing and there was no expertise in this area within the company.
Parag.: 8	Operating in the disposal of marine-related wastes, the sector was becoming increasingly regulated as the Environment Agency. The regulations required more-sophisticated separation and disposal techniques which in turn had led to innovative practices and readily available sources for recycling the majority of wastes.  Traceability and audit trails were a pre-requisite throughout the business process and government agency inspections were becoming a regular occurrence as legislation was introduced and expanded in response to public reaction.  High-profile media reporting of oil leaks resulted in the local community becoming more vocal when tankers were required to collect and remove the on-site wastes for recycling.
Parag.: 9	A widely reported court case following suspected contamination resulted in the Environment Agency requesting an in-depth inspection of the processes and procedures.  In addition, the local community demanded to know the contents of the tankers that were traveling past their front doors and several letters from high-profile residents appeared in the local press. This resulted in reporters contacting the company for further information.
Parag.: 10	As a result of a merger, a new shipping terminal adjacent to the SET site was announced.    Amid a flurry of activity, 200 new jobs were expected, multi-million-pound investment from a Brazilian-based consortium had been secured to provide a route for the lucrative waste metal market.  Initially, 12 regular sailings per week from the terminal were planned, each docking would require a waste disposal service.  Tanker Lorries using the shipping service would also require the washing service.
Parag.: 11	At a Board meeting in 2001, it was proposed by the managing director that to protect the future of the company and take advantage of the potential opportunities from the new terminal that a change manager should be appointed.
Parag.: 12	Two months later the new change manager presented plans to the Board – see notes on the next paragraphs.
Parag.: 13	The proposals were all agreed by the board – through the change manager decided to discuss point 12 with the managing director outside the board and present the plan at a subsequent board meeting.    Following the board meeting, the change manager met the existing customer to provide a formal expression of interest and prepare a tender bid in line with the customer’s requirements.  Three months after the appointment of the change manager the SET bid, valued at €4m per annum, was accepted for a three-year period with an opportunity to extend for a further two years.  The chairman accepted an exit package.
Parag.: 14	Initial Notes for Board Meeting - Many areas of the company require considerable attention: 1.      Priority - Preparation of tender documents to bid for the continuation of existing business – use customer format – not an update of the previous submission 2.      Have a conversation with all staff – establish their thoughts and ideas – what is SET good at doing? 3.      Make contact with – new terminal manager, local environment agency manager, local council – join local business networking groups 4.      Agree on a growth and diversification strategy 5.      Accredited quality management system to be implemented 6.      Actively go out and sell SET services 7.      Write business contract – terms and conditions 8.      Revise and implement recruitment and selection processes 9.      Create SET brand and values, develop a website 10.   Refurbish office 11.   Design appraisal system and training needs analysis 12.   Devise exit strategy for chairman 13.   Plan regular management meetings – frequency to be discussed 14.   Consult Board members - ask what they believe should be changed. 15.   Revise internal systems to reduce duplication and adopt TQM practices  16.   Utilise change management practices to project manage a company-wide strategic change in practices and procedures
Parag.: 15	The proposals were all agreed by the board – through the change manager decided to discuss point 12 with the managing director outside the board and present the plan at a subsequent board meeting.    Following the board meeting, the change manager met the existing customer to provide a formal expression of interest and prepare a tender bid in line with the customer’s requirements.  Three months after the appointment of the change manager the SET bid, valued at €4m per annum, was accepted for a three-year period with an opportunity to extend for a further two years.  The chairman accepted an exit package.
Parag.: 16	12-months after the appointment of the change manager the new terminal became operational and appointed SET as the sole provider of waste disposal services for a five-year period.  The contract value was estimated to be worth €12m per annum.  The managing director’s wife retired and was replaced by a qualified accountant/office manager at the same time the change manager was appointed to the board as Commercial Director and the company achieved ISO  9000 status, enabling SET to bid for the additional business.