A UK-based Distributor
signed a Dealership Agreement with a European manufacturer of heavy industrial
equipment during the mid-2010s for the importation and distribution rights to
the equipment within the UK market. The equipment was priced between £25K and
£500K, and UK-sourced options and attachments could add up to 30% to these
prices.
The equipment was
manufactured across several European manufacturing sites owned and operated by
the manufacturer. The Dealership Agreement required that the Distributor import
and configure the equipment for the UK market.
The organisation operated
from nine sites around the UK, comprising a Head Office in the Midlands, a
shared importation and service centre on the East Coast, a used equipment
re-manufacturing facility in the East Midlands, and six additional service
centres in England, Wales, and Scotland.
The Distributor suffered
from many performance issues, making it a low-performing organisation. The
problems centred around the following:
- The construction equipment was
CE-compliant upon import but was sold to customers without CE compliance
when adapted for the UK market.
- Construction equipment options and
attachments designed within the UK were not subjected to independent
safety testing nor endorsed by the construction equipment manufacturer
before installation.
- Safety equipment was fitted to the
construction equipment that failed operationally when used by customers,
putting equipment operators at risk of death or serious injury when using
the construction equipment.
- No construction equipment options,
attachments, installation, or maintenance manuals were specified, approved
by the manufacturer, or supplied to customers.
- There was a failure to implement a
Quality Management System to maintain and ensure the quality and
legislative standards for sourcing or installing construction equipment
options and attachments.
- A product catalogue was not
implemented, resulting in construction equipment options and attachment
failures not being recorded and monitored, warranty claims processed, or
profit and loss ascertained accurately for any option or attachment type.
- There was a failure to mitigate the
commercial risks of construction equipment attachment or accessory
failures by ensuring that the risk was transferred back to suppliers by
having the appropriate coordinated customer/supplier contracts in place.
- Personal Protective Equipment (PPE)
was specified for marketing reasons for Field Service Engineers, which was
not market sector compliant for several industries where the Distributor
operated.
- There was a failure to conduct a
legal risk analysis of purchasing and supplier management activities,
making it impossible to highlight any contractual supply risks or
recommend the necessary actions to mitigate them.
- A category management process was
not instigated to highlight and increase the visibility of purchasing
patterns or trends, putting the organisation at a disadvantage when
negotiating with suppliers to increase purchase leveraging.
- Regular formal negotiations or
tendering activities for an annual spend of circa £40M were not
undertaken, resulting in costs 7 – 9% (£2.8M – £3.6M annually) higher than
the open market.
- Supply contracts were not
instigated for construction equipment options and attachments, failing to
ensure that the appropriate supplier quality or legislative standards were
in place to ensure CE or ISO compliance.
- Recruitment policies solely focused
on increasing the diversity and inclusivity of the workforce, resulting in
performance issues as additional skills were needed to enhance the
commercial performance of the organisation at the Director and Team Leader
levels.
The Distributor suffered
from low-performing Head Office and Service Centre-based Directors and Team
Leaders, whose management actions did not receive any coaching, mentoring, or
coordination at the Senior Executive Team level. The low-performing Directors
and Team Leaders regularly exhibited actions and behaviours such as:
- The inability or disinclination to
deal with controversial issues.
- Subjugating politically tricky
decisions to others.
- Rarely visiting the Importation
Centre, Workshops or Service Centres.
- Not encouraging functions to work
together through collaboration.
- Allowing silo working conditions to
propagate across the organisation.
- Not leading or taking the
initiative with performance-improvement projects.
- Communicating with change managers
concerning organisational issues.
- Evolving the consensus that change
was unnecessary or not required.
- Leaving functions stagnating and
performance dropping to an all-time low.
- Acting for political reasons rather
than the general good of the business.
- Not asking questions to ascertain
basic information.
- Showing little regard for the
opinions of others.
- Appearing distracted when dealing
with organisational issues.
- Not holding staff or Teams to
account for poor performance.
- Ignoring the accomplishments of
high-performing staff and Teams.
- Exhibiting toxic behaviour towards
people with different opinions and ideas.
Organisations rarely fail
because of environmental changes; they fail because low-performing Directors
and Team Leaders are unable or unwilling to deal with change. The most crucial
aspect of any business is adapting to change, especially as a team.
Low-performing organisations
will look to increase their staff to resolve performance issues rather than
review their systems and procedures to enable staff and teams to achieve more
with less. In other words, it means working smarter rather than harder.
Effective communication
leads to action and results, whereas poor communication causes mistakes and
delays that affect performance and profit. High-performing Directors and Team
Leaders:
- Proactively manage the impact of
organisational and industrial uncertainty within themselves before it
impacts corporate change projects.
- Instinctively show that leadership
is not a position. It is about influence or having the power to change or
to be able to change something within the relevant sphere of influence.
- Show that they are responsible for
their performance and that of the organisation, their Team, and their
staff.
- Take pride in their role and skills
and know that if they do not deliver, they let themselves, their Team, and
their organisation down.
- Know that if a team wins, it is not
because of one person but due to everyone within the group, and develop
this attitude in their staff, teams and across their organisation.
- Build a high-performance ethos
where everyone helps bring out the best in each other, knowing that
leadership aims to produce more leaders, not followers.
- Have high enthusiasm for their work
and people across all business aspects.
- Are genuinely invested in
increasing the performance of the organisation, its profitability, and its
customer service offering.
- Dedicate all their efforts to their
job, drive projects or work assignments, see them through to the end and
ensure that all aspects of their duties or tasks are perfect, down to the
smallest detail.
- Pay great diligence and will not
skip parts of an assignment or task to reach a completion date.
- Take calculated risks and do not
fear failure as they take the occasional step backwards on the road to
perfecting the performance of themselves, their Team, and their business.
Staff within high-performing
organisations can decide about their projects and how to use their
capabilities. Making the necessary decisions without asking anyone in authority
for permission allows high-performance Directors and Team Leaders to produce extraordinary
results.
In high-performance
organisations, Directors and Team Leaders become ingrained in group
cohesiveness, getting along, and providing help whenever possible. They step in
immediately with any problem or issue to pick up the slack.
However, the essential
characteristic of all high-performing Directors and Team Leaders is that they
always perform beyond the highest levels of performance and achievements. They
possess a united vision of the organisation and its values. They are aware of
the importance of actively working towards upholding them.
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