Operational performance improvement

Challenge

Our client was losing money and failing to deliver profit improvements promised to shareholders. We were asked to help apply rapid corrective action to combat:

  • Forecast losses of up to $40 million
  • Increasing levels of customer complaints and threats of penalties by the regulator
  • Low morale of staff as a result of poor management

Approach

The turnaround of business performance was structured into three phases.
Phase One: The focus was on identifying the root causes of poor performance, setting the strategy for the following year and on quantifying, prioritizing and launching ‘quick wins’.
Phase Two: We worked with a Change Team to improve staff utilization, to renegotiate contractor agreements, and to communicate the strategy to the organization.
Phase Three: The focus was on driving productivity and skills transfer, including the development of management staff skills, termination of overtime except in emergencies, reduction in the number of contractors and the introduction of new standard job hours.

Results

As a result of identifying and actively correcting the root causes of poor performance, our client saw:

  • Profits of $20.8M against a forecasted loss of $80M
  • Utilization of staff up to almost 100%, with productivity doubling, overtime spend dropping by 85% and overall spend on contractors falling by 27%
  • Improvements in morale across the workforce were measured in the Employee Opinion Survey