A post merger team approach to process improvement leads to turnaround success
A diversified specialty pharmaceutical provider acquired a larger competitor as part of an expansion strategy for the buyer that matched with the target company founder’s retirement strategy. Each company was highly successful with each having achieved remarkable growth in the year leading up to the transaction that merged these regional client focused market leaders.
Shortly after the merger, the acquired entity began to experience financial difficulties including: quality control and client satisfaction issues; substantial overtime, late deliveries and cost overruns in a variety of budget areas: and very low employee morale due to fatigue and frustration. A CFCS professional was brought in as an interim operations manager to lead the turnaround.
The acquired company founder and client relationship management team played a critical role in the success of the turnaround. In the months leading up to the sale of the company, new client relationships had been added with very demanding, labor intensive product delivery systems. With the creativity of the founder combined with the strength of the client relationships, modified systems were developed and implemented that ultimately relieved the organizational stress. The stress relief on the operations team allowed time for standardizing processes, establishing organizational leadership in each department and each shift with adequate training and coaching so the commitment to 100% client satisfaction while achieving zero tolerance for quality issues with a clear understanding and commitment to conscientious cost management. It took several months to identify and develop the product delivery system solution and another two months for the programming changes to the EAP system and the training for the fulfillment team. Once the systems were tested, a pilot was conducted with a carefully selected client. Following a prompt test and review phase, the program was successfully rolled out.
Within the first month the program was implemented: overtime was eliminated, costs were returned to below budget levels, profitability was restored, quality issues became negligible, employee morale was restored and client satisfaction returned to its pre-merger highs. The interim operations manager replacement was identified, recruited and the organizational transition was successful.
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