Verne Harnish is founder and CEO of Gazelles, a global executive
education and coaching company, Verne has spent the past
30 years educating entrepreneurial teams. He’s the author of
Scaling Up that uses approaches honed from over three decades
of advising tens of thousands of CEOs and executives.
“While we waited for our new strategies
to become effective and grow the
revenues, we were stabilizing the
business,” says Hyder.
To keep team members focused on
the benchmarks that would support its
profitability, Hyder began holding daily
and weekly huddles, where everyone
got clear on what they needed to do.
The meetings reduced wasted time.
“I can’t remember when we last had an
emergency meeting or unscheduled
session to sort out a problem,” says
Hyder. “Everyone can now simply get
on and do their job.”
THE POWER OF KEY
PERFORMANCE INDICATORS
Hyder and his leadership team also put
in place key performance indicators
(KPIs) for every employee. These fed
into the company’s goals.
Employees began reporting on their
leading and lagging KPIs in the
daily and weekly huddles. To keep
everyone’s progress visible, the
company recorded it on a dashboard
they could view on Trello boards—
which were far more efficient than
the company’s enterprise resource
planning (ERP) system. Trello is a
mobile project management software.
Because Geographe had not been
able to offer pay increases for a while
— “Our crew and the staff were getting
a bit unhappy,” says Hyder — the
company introduced a performance
bonus to motivate employees to meet
their KPIs. Coming up with the money
was not easy when the company was
in crisis, but Hyder persisted in paying
it.
“We did have one quarter where
we didn’t pay the full amount,” he
acknowledges. “I agreed to back pay
everyone. I have also increased their
pay permanently.”
“I CAN’T REMEMBER
WHEN WE LAST HAD AN
EMERGENCY MEETING
OR UNSCHEDULED
SESSION TO SORT OUT A
PROBLEM,” SAYS HYDER.
PAINFUL CHOICES
Once
Geographe
was
tracking
employees’ progress in meeting their
KPIs, the company was able to use
the labor efficiency ratio (LER) to
determine how productive they were.
The LER looks at the productivity of
each dollar invested in labor.
This analysis led to some painful
decisions. Hyder laid off about 30
percent of his staff, shrinking the
company from 156 people to 97. “I was
letting go of my mentors and people
who had been here 25 years or more,”
he says.
But Hyder knew he needed to stay
focused on turning the company
around. The lean team that remained
at Geographe focused on a single
overarching metric to drive the new
strategy, the “Profit per Contract.”
To support that effort, the company
has focused on metrics, such as on-
time delivery, that keep customers
happy. “Our on-time delivery is very,
very high,” says Hyder. “The industry
average for manufacturing and mining
supplies is around nine percent. Ours
is around 90 percent. We punch way
above our weight.”
Geographe has also set what Jim
Collins calls a Big Hairy Audacious
Goal (BHAG). That goal is to have $76
million in business under contract by
2025, up from the current $19 million.
To meet Geographe’s BHAG, sales
people now call almost every client
just before the close of business on
June 30, the last day of the financial
year, to seal deals, so they can meet
an annual stretch goal. For the 2016
fiscal year, they met the target.
EXPANSION MODE
By 2015, when Hyder formally
accepted the CEO’s mantle from his
father, Clayton Hyder, now chairman,
the business had done a complete
turnaround. It now employs 115
people and is expanding into local
manufacturing in Africa and Indonesia.
With revenue and profits climbing and
on-time delivery making the company
stand out, Hyder and his team are
focused on deepening relationships
with their customers.
“The systems we’ve put in have built
on and rejuvenated a great underlying
family culture,” says Hyder. “Most of my
work and efforts have been updating
and refining rather than throwing out
the old to make way for the new.” That
approach has proved to be a winning
formula for the company. u
FALL 2017
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