Agriculture Products & Services
This full service country grain elevator had been in existence for 24 years before we encountered them. They had just purchased another similar facility in the year preceding our involvement. They were suffering from asphyxia by strangulation from their GM. He was a micro-manager who could not let go of any major responsibility nor grant anyone adequate authority to accomplish their jobs. In addition, there was no clear vision of where the company was going or how they were going to get there. In short they were suffering from the great American Business disease of "lack of planning". Our consultant also found problems with accounting and management information reporting systems. Finally, we discovered the need to properly market the entity in order to maximize utilization of the physical plants and fully utilize the people.
During our first three weeks on the job we spent a major portion of our time prying the GM's hands off of every single aspect of the business. We took the entire staff through the functional organization concept, getting their input on all of the functions and actions necessary to the operation of the elevator companies. We then began working upon delegation of duties and responsibilities down the organization. As you can well imagine this change was very traumatic on the GM. The trauma to the GM was so great that mid way through the third week, we had a six hour confrontation with him. The fall out from that meeting was the GM understanding that he must let go for the company to survive. When they had come to an understanding about giving people jobs to do and then letting them accomplish those jobs, morale began to improve and attitudes became positive.
Simultaneously with the organization and delegation work, we started to build and implement communications and information sharing procedures throughout the companies. As this process started and especially after the GM had his epiphany about letting go, morale soared and people began giving more input about what was actually happening within the companies. This led to them giving suggestions for improvement and correction.
As the crisis organizational problems came under control, we began with revamping the financial statement structure to provide management oriented statements and the budgeting, break even and variance reporting processes. With the GM and the key managers our consultant built a departmental budget following the format of the new chart of accounts. Having input from all of the managers made the process much more efficient and seamless. Likewise, having all of the managers buy in, made the budgets much easier to enforce with employees since they were responsible for its preparation and adoption.
Reporting systems were refined and changed to gather all pertinent information to give the GM the control that he so desperately wanted but could never have under his old system. He soon knew what inventory he had on hand. Whether he was long or short on grain in storage or at the terminal elevators. What his position was relative to his line of credit balance. What his aging looked like, what his cash position was, and what his accounts receivable were at the end of each week
Among the areas which needed attention was sales and marketing. After fixing the other critical need areas, we began working with the client on market expansion, product mix, pricing criteria, salesman's effectiveness measurement and customer ratings.
We worked with client's personnel to identify logical territories, past sales in a territory by product, market size within territories, market penetration within territory and market and personnel assignment by territory and product line. The company had an immediate bump in sales as a result of letting people know what we expected of them and where they were to concentrate their efforts.
As a final step in our initial consulting project we prepared with the management and employees of the company a performance based incentive plan and required evaluation processes to adequately implement the plan.
With all of the above systems and processes in place we left the client at projects end, with companies running efficiently, profitably and happily. During the course of our initial project we identified other areas that needed attention and have continued working with this client on a regular basis to implement new computer systems and reduce duplication of paperwork between the companies.
We are now glad to report the client is searching for new companies to acquire. We have jointly developed an acquisition model that will make them a regional powerhouse among producer related elevators. They are now capable of competing with Cargill out in the countryside.