Michael was very concerned. He had been appointed as Chief Executive of Good Limited one month ago and he was shocked at what he had found. It was clear to him that he had many issues to address.
Good was an engineering and construction company that provided turnkey solutions for clients, designing and delivering large bespoke building projects such as schools, railway stations and hospitals.
Michael had been appointed because the Board at Good had become worried that a number of these projects had gone wrong, incurring losses and damaging the reputation of the business. This had meant that sales were falling and the Board wanted Michael to make the changes needed to grow profits.
He had just attended a meeting with the sales team that managed Good’s largest customer, Trouble Limited. Trouble had written to Michael threatening legal action against Good because of what they claimed was a breach of contract by Good Limited. Trouble had contracted Good to build a hospital but the project was failing. Good were late with the building work and they faced substantial legal penalties if they did not recover the position and get the project back on track.
At the meeting, the sales team had explained to Michael that Trouble had been responsible for the delays because they kept changing their requirements which resulted in Good having to redesign the hospital. Good’s lawyer had also attended the meeting and had advised that in fact the blame appeared to him to be equal on both sides. The lawyer also said that the problems in delivering should have been identified in the course of the bid process.
Michael had asked to see the account plan for Trouble limited but had been told that they did not have any form of written plan. Michael had also asked the sales team to explain the bid process by which Good managed bids. The sales team said that there was no written bid process and the business was managed on the basis of people knowing each other. They said they did not want any “silly paperwork” that would stop them selling. The sales team also said that they were not responsible for the problems that had arisen here with Trouble and that in fact it was the delivery team that should take the blame.
Michael asked the people at the meeting whether they had any form of negotiating plan by which to manage the dispute with Good. The head of sales said that she did not believe in too much planning and she would deal with the matter, as usual, by seeking to satisfy the demands of the customer as quickly as possible, even if that meant paying more than was really owed. The lawyer said he was happy to leave it for the sales team to manage the settlement.
Michael considered what he had found so far in his time at Good. He had noticed that there was no reference to Values of any kind. He had also noticed that there was a blame culture as one group blamed another for the difficulties and loss of sales. The marketing team blamed the sales team and sales blamed the delivery team. It also struck Michael that the business lacked leaders.
When Michael had spoken to the team about the bid process, it had become clear that the business had not identified its main processes and had no structured ownership of processes.
Michael decided to look at the pack of KPI’s that the board used to measure the performance of the business. He saw that all the measures were all financially based. He needed a more comprehensive set of measures.
He asked his new team to define the operating model of the business but they had looked at him blankly, as if he was talking a foreign language.
Michael knew he had a tough job on his hands.
He has asked for your advice. He has to outline his plan to the main Board next week, based on what he has found in his first week.
Please write a report summarising the steps he needs to take to change Good limited.