Verax Case Studies - Private Sector
Verax OTI - Mini Case Studies
A U.S. owned chemical giant acquired 4 European loss makers in the same industry. The 4 were merged to create a “newco.”. Within 4 weeks of this happening Verax facilitated the Board in creating their “Strategic Profile” based on their strategy, focusing on improved financial results, customer satisfaction, consistent and improved product quality.
The Strategic Profile identified the need for excellent leadership, efficient and effective systems and processes and a devolved organisation structure.
2 days after the Board signed off the Strategic Profile, Verax started data collection in 17 languages at 24 sites around the world. 3 weeks later the gap analyses were reported globally and site by site. Work-teams were set up to deal with each significant issue, each championed by a Board member and project managed and supported by Verax and some 40 internal facilitators trained by Verax. One site was closed, as it was not cost effective to bring it in line with the Strategic Profile.
OTI Real Time provided the Board and local managers with monthly analyses, updates, and forecasts, as the change programme was implemented.
Within 6 months the “newco” had broken even, continuing in the same vein for 4 years enabled the business to report pre-tax profits (EBITDA) of over $600m. At that point the business was sold!
Recently OTI was used by a household name company in the UK that had a shrinking customer-base. The OTI analysis pointed to the Customer Relationship Management system as the main culprit along with very ineffective (non existent) management at three levels of the organisation. When provided with this analysis the Chief Executive Office was surprised that this was the case, citing the fact that £20 million had already been spent on the installation of a new CRM system. However when this new system was discussed with call centre staff, they confirmed that it was worse than the original system it had replaced. It was less flexible, provided fewer ways of helping the customer and was more cumbersome to use. However, this had not been communicated and staff had not even been asked before. Following the OTI analysis the new system was considerably modified and a comprehensive management development programme was instigated resulting in a major turnaround for this company. Today, more customers are continuing to return to the tune of over 1 million per annum and the net inflow of customers is positive reversing the trend over the past five years. Other efficiencies and cost savings directly due to the use of OTI intelligence is saving over £1 million in costs.
A further example illustrating the effectiveness of the OTI system involves a civil engineering company. This organisation turned a loss making division into one making £2 million per annum profit in two years by using OTI information and recommendations. Sales volumes were increased over the same period by over 70%. The analysis highlighted five issues that were impacting on business performance: a poorly communicated vision; lack of any clear goal setting; inconsistent leadership; little evidence of teams or team working; and inappropriate reward and recognition. The main reasons for losses identified by OTI were ineffective middle management, overly bureaucratic systems and processes and poor performance management. The company’s management team used the analysis to re-focus their priorities leading to enhanced profitability.
Using the same system , an international FMCG (fast moving consumer goods) company’s supply chain was able to reduce costs by £3 million in year one and £5 million in year two and ongoingly. OTI identified the key issues. The analysis highlighted a need for change in senior leadership (providing clear direction and communication), the organisation structure and some inefficient systems and processes. The organisation set up a project team to deal with the issues and this team was responsible for implementing the required changes.
OTI within the company’s supply chain highlighted three areas where change seemed necessary:
Strategy and Vision
Leadership and Structures
The project used a five point plan for managing change, focusing on
A shared vision, where sharing helps achieve good buy-in
A target culture, best expressed as a “new way of doing things around here”
Good leadership, e.g., having a strong role model behaviour from relevant departmental heads
Performance…achieving sustainable performance from team and individual effectiveness
Communication and commitment, the success of which is based on the idea that people will only support what they help to create.
Generally, these examples illustrate that by accessing good information, conducting an accurate diagnosis and acting positively on that information to produce high quality, appropriate solutions, the change process does not need to be so problematic. Information is key to the process and systems such as OTI provide excellent tools for implementation of change programmes.
OTI provides special intelligence to organisations not available from anywhere else. Many other information systems are often purely descriptive e.g., Management Information Systems, customer satisfaction and staff surveys. They describe issues and outomes but give no insight into the causal factors. OTI not only describes the results and outcomes achieved by organisations but also uniquely analyses – using a variety of statistical techniques – the most probable causal factors to a sufficient level of precision that enables the simplification of the process to design the appropriate solutions. As Kepner and Tregoe asserted working on causes is generally more cost effective and longer lasting than working on effects.