A UK-based Distributor signed a Dealership Agreement with a European manufacturer of heavy industrial equipment during the mid-2010s for the importation and distribution rights to the equipment within the UK market. The equipment was priced between £25K and £500K, and UK-sourced options and attachments could add up to 30% to these prices.
The equipment was manufactured across several European manufacturing sites owned and operated by the manufacturer. The Dealership Agreement required that the Distributor import and configure the equipment for the UK market.
The organisation operated from nine sites around the UK, comprising a Head Office location in the Midlands, a shared importation and service centre on the East Coast, a used equipment re-manufacturing facility in the East Midlands and six additional service centres located around England, Wales, and Scotland.
The Distributor suffered from many performance
issues, making it a low-performing organisation. The problems centred around
the following:
- The construction equipment was CE-compliant upon import but was sold to customers without CE compliance when adapted for the UK market.
- Construction equipment options and attachments designed within the UK were not subjected to any form of independent safety testing nor endorsed by the construction equipment manufacturer before being installed.
- Safety equipment was fitted to the construction equipment that failed operationally when used by customers, putting equipment operators at risk of death or serious injury when using the construction equipment.
- No construction equipment options and attachments installation or maintenance manuals were specified, approved by the manufacturer, or supplied to customers.
- There was a failure to implement a Quality Management System to maintain and ensure the quality and legislative standards for sourcing or installing construction equipment options and attachments.
- A product catalogue was not implemented, resulting in construction equipment options and attachment failures not being recorded and monitored, warranty claims processed, or profit and loss ascertained accurately for any option or attachment type.
- There was a failure to mitigate the commercial risks of construction equipment attachment or accessory failures by ensuring that the risk was transferred back to suppliers by having the appropriate coordinated customer/supplier contracts in place.
- Personal Protective Equipment (PPE) was specified for marketing reasons for Field Service Engineers, which was not market sector compliant for several industries in which the Distributor operated.
- There was a failure to conduct a legal risk analysis of purchasing and supplier management activities, making it impossible to highlight any contractual supply risks or recommend the necessary actions to mitigate them.
- A category management process was not instigated to highlight and increase the visibility of purchasing patterns or trends, putting the organisation at a disability when negotiating with suppliers to increase purchase leveraging.
- Regular formal negotiations or tendering activities for an annual spend of circa £40M were not undertaken, resulting in costs of 7 – 9% (£2.8M - £3.6M annually) higher than the open market.
- Supply contracts were not instigated for construction equipment options and attachments, resulting in a failure to ensure that the appropriate supplier quality or legislative standards were in place to ensure CE or ISO compliance.
- Recruitment policies solely focused on increasing the diversity and inclusivity of the workforce, resulting in performance issues as additional skills were needed to enhance the commercial performance of the organisation at the Director and Team Leader levels.
The Distributor suffered from low-performing Head
Office and Service Centre based Directors and Team Leaders whose management
actions did not receive any coaching, mentoring, or coordination at the Senior
Executive Team level. The low-performing Directors and Team Leaders regularly
exhibited actions and behaviours such as:
- The inability or disinclination to deal with controversial issues.
- Subjugating politically tricky decisions to others.
- Rarely visiting the Importation Centre, Workshops or Service Centres.
- Not encouraging functions to work together through collaboration.
- Allowing silo working conditions to propagate across the organisation.
- Not leading or taking the initiative with performance-improvement projects.
- Communicating with change managers concerning organisational issues.
- Evolving the consensus that change was unnecessary or not required.
- Leaving functions stagnating and performance to drop to an all-time low.
- Acting for political reasons rather than the general good of the business.
- Not asking questions to ascertain basic information.
- Showing little regard for the opinions of others.
- Appearing distracted when dealing with organisational issues.
- Not holding staff or Teams to account for poor performance.
- Ignoring the accomplishments of high-performing staff and Teams.
- Exhibiting toxic behaviour towards people with different opinions and ideas.
Organisations rarely fail because of environmental changes; they fail because low-performing Directors and Team Leaders are unable or unwilling to deal with change. The most crucial aspect of any business is adapting to change, especially as a team.
Low-performing organisations will look to increase their staff to resolve performance issues rather than review their systems and procedures to enable staff and teams to achieve more with less. In other words, to work smarter rather than harder.
Effective communication leads to action and results, whereas poor communication causes mistakes and delays that affect performance and profit. High-performing Directors and Team Leaders:
- Proactively manage the impact of organisational and industrial uncertainty within themselves before they impact corporate change projects.
- Instinctively show that leadership is not a position. It is about influence or having the power to change or to be able to change something within the relevant sphere of influence.
- Show that they are responsible for their performance and that of the organisation, their Team, and their staff.
- Take pride in their role and skills and know that if they do not deliver, they let themselves, their Team, and their organisation down.
- Know that if a team wins, it is not because of one person but due to everyone within the group, and develop this attitude in their staff, teams and across their organisation.
- Build a high-performance ethos where everyone helps bring out the best in each other, knowing that leadership aims to produce more leaders, not followers.
- Have high enthusiasm for their work and people across all business aspects.
- Are genuinely invested in increasing the performance of the organisation, its profitability, and its customer service offering.
- Dedicate all their efforts to their job, drive projects or work assignments, see them through to the end and ensure that all aspects of their duties or tasks are perfect, down to the smallest detail.
- Pay great diligence and will not skip parts of an assignment or task to reach a completion date.
- Take calculated risks and do not fear failure as they take the occasional step backwards on the road to perfecting the performance of themselves, their Team, and their business.
Staff within high-performing organisations can decide about their projects and how to use their capabilities. Making the necessary decisions without asking anyone in authority for permission allows high-performance Directors and Team Leaders to produce extraordinary results.
In high-performance organisations, Directors and Team Leaders become ingrained in group cohesiveness, getting along, and providing help whenever possible. They step in immediately with any problem or issue to pick up the slack.
However, the essential characteristic of all high-performing Directors and Team Leaders is that they always perform beyond the highest levels of performance and achievements. They possess a united vision of the organisation and its values. They are aware of the importance of actively working towards upholding them.
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