Case #1 From prolonged crisis to growth in 6 months

Posted bytatevikcoachPosted inCase Studies

CLIENT

An international direct selling company. Launched in 2003. The representatives are operating in 22 countries around the world.

INLET CONDITIONS 

The prolonged crisis at one of the representative offices: 

  • management crisis – the CEO is the sole decision-maker and has complete authority to manage and control the business. The autonomy of other managers has been denied. The leaders of the Back Office and Trade Representatives (TR) have complicated ties and a conflict of interest;
  • team crisis – poor engagement and productivity, missed OKRs, loss of cohesiveness, suppression of conflict, emotional exhaustion, leaving of key team members;
  • failing in average monthly sales by -15%-12% of the current year compared to the prior year. 

THE CONTRACT

HQ Board of Directors replaced the CEO intending to get the X Regional Representative out of the crisis within 6 months with the accompaniment of a business consultant-coach.

Because of the complexity of the situation, I took the offer to join the company as an internal coach-consultant for 6 months, until the first results have been got. Afterward, I could continue to accompany them externally for the next 10 months.

GETTING STARTED

There were in-depth interviews with the new CEO, back office Executives, and heads of Trade Representatives aiming better understand the current situation, hear their POVs, and determine their readiness to change.Based on the results of the interviews, they created the SWOT analysis and defined the Growth Points.

GROWTH POINTS

  • Because of the former CEO’s complete control over the management of the company, executives are not involved in the decision-making process.
  • The conflict of interest between Executives of the back office and heads of trade representatives (TR) causes delays in important decisions.
  • The tools of the directive leadership approach (DLA) are outdated and no longer capable of supporting leaders in dealing with complex challenges in the face of uncertainty.
  • Back office Executives remain silent about conflicts between themselves and inside their divisions.
  • MVGO remains written on the sheet of paper.
  • The team is little engaged in achieving shared objectives.
  • Work across related divisions is less cohesive because the team is disconnected.
  • The sales training system, along with motivational and compensation plans, are all fuzzy.

DONE

  • Change-driven leaders pulled together in a team powerful enough to guide and support teams in change (ChOT Change oversight team).
  • The new CEO delegated the empowerment of making decisions to Executives.
  • The Leaders who were involved in conflicts of interest were replaced.
  • Executives analyzed the consequences of the directive management approach (DMA) right on the case studies of the Company. Here are some of them: the instability of the team, lack of enthusiasm and commitment, less initiative and creativity in solving tasks, mistrust, ignoring of emerging problems, lack of feedback, suppression of conflict, resistance to change, avoidance of responsibility, missing deadlines and OKRs, high rate of team turnover.
  • Together with the executives of TR, we unpacked the case studies of suppressed conflicts full of contradictions and misunderstanding, hidden motives, suppressed emotions, resentment, and differences in values and interests. The leaders realized they had a deal with a time bomb ready to explode at any moment.
  • Implemented the practice of confidential communications at informal meetings.
  • The VMGO was tested on the team for validity, relevance, and achievability. The priorities’ consistent set has been determined based on this. 
  • We link the personal goals of employees with the companies.
  • Conducted sessions to attune Executives.
  • Created an internal system of continuous learning for the Sales Team.
  • Created and implemented a transparent and understandable system of motivation, which includes encouragement and recognition of merits.

OUTCOMES 6+10 MONTHS LATER

  • Working toward shared objectives helped the Change Oversight Team be attuned and created an overall sense of purpose within the team, which increased the efficiency and effectiveness of solving shared tasks.
  • The general manager focused on strategic tasks.
  • Freedom of decision-making made managers more involved in achieving the company’s Goals. It made problem-solving in teams more efficient.
  • Mastering the tools of the non-directive leadership approach (NDLA) opened up for managers the prospect of making non-standard decisions, turning on the energy of the team, rallying them around a common Goal, building effective communications, and creating trusting relationships, resolving conflicts in the most ecological way. This increased the company’s viability and gave them more opportunities to accept tough challenges.
  • Informal meetings allowed each team member to voice their opinions, share experiences, and give constructive feedback. Team members learned in this way to detect conflicts themselves, formulate the problem clearly, propose solutions, discuss and evaluate the merits of each one, and accept the best settlement option for all.
  • Most of the team members accepted the company’s MVGO. When they realized the urgent need for change, they became motivated to take action. Managers updated the strategic plan every Q depending on the current situation.  
  • In the context of a common goal, team members could see their goals. Meanings and emotional connections appeared. OKRs have gone up.
  • The related divisions started to work together in a more coherent way. They identified the common values and indicators of success. Everyone could see the contribution of their colleague thanks to the transparency of the reporting system. Communications have improved. The teams realized they could find the best solution if they worked together while maintaining their individuality.
  • The new Sales managers became more quickly involved by taking the basic on-site training course.
  • Current sales managers who passed the first training pool showed the progress of OKR metrics in the long term run. A transparent motivation system, where each participant sees how his colleagues contribute to the progress and success of the whole company, has increased the atmosphere of trust in the SD. Rewarding and recognizing those whose actions are in line with the vision of the company has increased team engagement and motivation to achieve a common goal.
  • After 6 months of transformation, the average monthly sales growth increased to + 35% from the previous year’s -15%.
  • Annual sales growth rate attained +3% from the previous year.
  • Annual sales growth rate attained +28% from the second year.
  • The opening of 50 trade representative offices in the next 10 months increased the market share by 15%