When the consulting industry hit a downturn in 2002, Jim Taylor had to knuckle down to cut both costs and people at Thomas Group Inc. But despite the hard times, he honestly communicated the reasons for the changes with employees, and when he came out on the other side, he says his relationship with employees was significantly strengthened as a result of his openness.
Maintaining those relationships with his 160 employees still benefits Thomas Group, as it hit 2005 revenue of $43 million, a 44 percent increase over 2004.
Smart Business spoke with Taylor about how to align a company for growth and how he builds cross-functional teams.
Q: How does a company align itself for growth?
We have all been trained, from our school days to when we enter business, to think in a functional or vertical approach to organization. We should align ourselves horizontally and look at our business (the way) the customer looks at our business.
Look horizontally and align the company with what the customer needs are. By doing so, you start to see a lot of nonvalue-added activity. They’re redoing work. We have a rework department. We have a reconciliation department. We have a warranty department. Why aren’t you doing it right the first thing? Then you don’t need those departments to the degree that you have them.
Instead of working in silos, let’s work toward the customer needs.
Q: How can you anticipate those needs?
Do it through cross-functional teams rather than functional teams. Have team meetings that include purchasing, sales, marketing, production, accounting, shipping. Meet periodically to see what barriers are stopping them from moving faster. Identify them and rank them in the order of importance and difficulty in removing.
Knock them down, and do that in a cross-functional team with support from the top management. If a company is more efficient, they’re doing it with less money, and if they’re doing it with less money, they’ll make more profits, and if the customer is satisfied, the revenue will go up.
Q: How do you get employees to buy in to that?
Many CEOs inherit a corporation with so many tentacles and so vertically organized that the culture is difficult to change. Anything you do … to improve it will not last.
If you try to change delivery method or the way you design your product, but you don’t change the culture that was previously there, the old culture will win over the new initiative, and you’ll revert, over time, to doing exactly what you used to do. Culture will overrule any kind of new change you want to do.
Q: How do you change a culture?
It starts from me doing what I’m saying. I must be involved. I must be committed. I must look horizontally across my organization. That can only come from the top.
It’s easy to talk about. It’s difficult to do. Why do I want to change? This company is 100 years old, and we’ve always done it this way.
Times are a changin’, and you need to realign yourselves to put yourselves in the customers’ shoes and meet their needs and wants. Once you do that, then you’re going to find a very successful and efficient company.
Q: How can you help employees change?
We all want to do the best performance we can, but sometimes the incentives that management puts in place may not drive the right action to get you the right results. You’re based on the revenues or the widgets you put out in a certain timeframe.
That drives people to rush it and cram less than standard product out the door. Change the way you’re recognized for what you do.
Imagine a garment shop with 30 women sewing various parts of a shirt. Start at the beginning of the line, and pile it up. Give her 30 collars that she has to sew on. She sews all 30 and pushes it down to the next lady, who sews on 30 left cuffs. If every time you finish one shirt you pass it on, you’ll find the productivity goes up.
Now, if I give recognition to that lady that has sewn 300 shirts with no errors, she gets a silver star. She is elated. But the lady next to her has done 1,000 shirts, so she gets a gold star. Everyone will start looking and performing better to reach the recognition levels because the silver star, the gold star, the $50 bonus, the free lunch, the half-day off is recognition for them for jobs well done.
Quality has improved, productivity has gone up, the customer’s getting their shirts faster at a higher quality, and you’re doing it with less money. You just made more money with a happier employee.
By creating a culture where people are held accountable for creating results and held accountable as a team for producing these results, as opposed to individuals doing their own thing, the results will be fantastic.
HOW TO REACH: Thomas Group Inc., www.thomasgroup.com