12/01/2023
How a lumber and building materials dealer hired a General Manager who performed a turnaround by empowering the team and creating a culture of accountability.
EXECUTIVE SUMMARY:
This full-line lumber and building materials dealer had a yard in disarray with no operational processes in place and a “just sell it” sales mindset that resulted in poor margins and no profit. Misura Group recruited a General Manager who aligned with the company values and saw the disarray as an opportunity. By listening to employees and following through on what they had to say, the team was empowered to reformat the yard and increase efficiencies. The leader is now mentoring young talent poised to become managers within 6 months.
The impact in less than one year:
Improved overall gross margin from 18% to 24%
Increased revenue 60% from $15m to $30m
Cut inventory loss in half from $50,000 to $25,000
THE CHALLENGE:
CUSTOMER FOCUS
A full line lumber and building materials dealer had an owner who held being popular over holding people accountable. To keep the top customer happy, the owner allowed them to receive preferential pricing. Unfortunately, that customer made up one-third of sales at negative profit margins, they were losing money on that account. The sales team followed a “just sell it” mindset, with a goal of keeping customers happy with no strategy or sense of gross margin accountability.
OPERATIONAL PROCESSES
The owner had created a culture focused on the customer and not the employees or clear operational objectives. With no accountability, metrics, or strategic direction, the yard became piled with returns with no operational efficiency or drive to make improvements. This resulted in safety hazards, disorganized deliveries, and poor customer flow.
OUR SOLUTION:
INSPIRING LEADERS TO HIRE SMARTER
Misura Group helped the client understand that making customers happy isn’t a strategy, and that culture starts at the top. The client needed a leader who could empower the team, create a culture of accountability, then tackle the pricing and yard issues. We created a scorecard for the position that focused on operations leadership with a history of success developing teams, gaining trust, implementing metrics measurements, and increasing gross profit.
CULTURE FIT
This opportunity was a good fit for the top candidate due to the alignment of their personal values with the organization’s faith-based mission and involvement with the church and community. The leader saw the disarray as an opportunity to come in and optimize yard flow and efficiency while making an impact on the people side as well. The ability to create a pricing strategy and improve P&L was the ticket to entry – what made the top candidate stand out was their ability to engage the team.
THE RESULTS:
The General Manager shut the yard down for a week to optimize the layout, improve safety and flow, and increase efficiencies. They listened to employees (and implemented their ideas), resulting in an empowered team. They were able to increase pay for employees, some of whom hadn’t received a raise in several years.
The top customer that made up a third of sales went from -10% margin to 15-20%. Overall, margins went up to 24% for 2021. Revenue increased from $15m to $30m.
FINANCIAL IMPACT:
In less than one year:
Improved overall gross margin from 18% to 24%
Increased revenue by 60% from $15m to $30m
Cut inventory loss in half from $50,000 to $25,000
CULTURAL IMPACT:
The General Manager lives by the motto “become the person you want to follow, not have to follow” and drives that mindset on the yard. The employees are no longer clock punchers but invested team members and developing leaders.
WHAT THE CANDIDATE HAD TO SAY:
“I’ve worked with recruiters in the past. What made Misura Group different was how professional and down to earth they were at the same time. They were personable and understood my needs, priorities, and values. By paying attention to the whole package – the work, the values, my family – they found the right match for me at a perfect time to make a career move.”
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