CASE STUDIES

  Cargill DSO

 

Abstract – US Unit of a US Based Global Conglomerate
# of Employees Annual Turnover EBITDA Was EBITDA Result Amount of EBITDA Increase % Annual Increase Overall Time to Produce Result
1000 $1,000M $23M $41.3M $18.3M 80% 10 Months

Prior to working with Sage, this company had been achieving a 12% annual increase in EBITDA year over year.  We began working with them two months into their fiscal year with their annual EBITDA targets having been set by the Board.  For the full bonus to be paid out, they would have to achieve 15% EBITDA growth.

We began working with the senior executive team and the extended leadership team, approximately twenty individuals.  Within this group there were various opinions and moods about the annual targets they were “given” by the Board, and the feasibility of achieving them.

After our first month of work with the team, all twenty members of the leadership team aligned and committed to achieving $42M, a staggering increase of 83% with only nine months left to produce that result.

We continued working intensely with the senior leadership team throughout the year while expanding our work to all of their direct reports, approximately another seventy individuals.

At the end of the year, they failed to achieve the EBITDA goal they set of $42M coming up just short at $41.3M.  They were initially disappointed that they had come up short and by such a narrow margin, but they subsequently realized that an 80% increase was in fact quite a transformational result, which was highly celebrated.

The following year, they posted an EBITDA of $51.5M for a 25% increase.

Many of the members of that twenty-person leadership team look back on their experience together as one of the greatest achievements in their professional careers.  Several have gone on to become CEOs of other companies, taking what they learned with them.

 Roquette America 

Abstract – US Unit of a Eurpoean Based Global Business
# of Employees Annual Turnover EBITDA Was EBITDA Result Amount of EBITDA Increase % Annual Increase Overall Time to Produce Result
850 $680M $27M $47M $20M 74% 3 Years

When Sage Alliance Partners arrived, this was a business in trouble and had the following issues:

  • EBITDA had been bouncing between $14M and $27M year after year with no trend upward, with a $40M EBITDA requirement set by the board to meet the required ROI.
  • Aging plant equipment – underfunded maintenance and a lack of new investments in plant and equipment due to not meeting the ROI requirements.
  • Major quality issues resulting in declaring “Force Majeure”
  • Environmental consent decrees
  • Fires and floods
  • A union lockout
  • Employee Sabotage
  • Chronic safety issues
  • Union distrust of management
  • High turnover
  • Worry the unit would be sold
  • Low employee engagement and morale

We began working with the senior management team, focusing on developing them individually as transformation leaders and collectively as a high-performance team.  After six months of ongoing work, they were ready to enroll the next layer of managers into the journey of transformation and high performance.

That kicked off an 18-month process of creating a high-performance team culture inside the entire business which was led by the senior leaders and managers, coached by Sage, and which would reach every employee, including all hourly plant workers on all three shifts.  After a total of two years of work, it all came together in the third year in which they produced the following results:

  • EBITDA $47M (a 74% increase)
  • Quality dramatically improved resulting in their getting more business overall,  and customers they served typically becoming return customers
  • Record safety performance
  • Improved trust and relationship between the Union and management
  • All environmental issues resolved and Consent Decrees lifted
  • Dramatic reduction in turnover
  • Improved employee morale and engagement

This positive trend in EBITDA continued into year four in which they produced and EBITDA of $60M.

Our Approach/Rx:

  • Improved leadership skills and capabilities for the senior leaders
  • Improved sense of a true, trusted team among the senior leaders
  • Reduced emphasis on hierarchy and silos
  • More collaboration among everyone and less internal competition
  • Produced alignment among all employees on a shared vision and purpose for the business
  • Increased everyone’s capability to effectively work together while simultaneously enhancing relationship and trust

  AAK Foodservice

Abstract – US Division of European Global Business
# of Employees Annual Turnover EBITDA Was EBITDA Result Amount of EBITDA Increase % Annual Increase Overall Time to Produce Result
180 $150M 6.7 9.2 2.5 37% 2 Years

Our client was installed as CEO and subsequently struggled to build an effective team. He spent a year and a half attempting to run this complex business in a cutthroat market before turning to Sage Alliance Partners to boost his efforts.  We engaged with them in a broad effort to shift the leadership style and culture in the organization, first with the senior leadership team and then eventually with all 180 employees.

We assessed that there was a massive trust deficit among the leadership team and also between the leadership team and the rest of the organization.  We determined the project to be that of repairing and rebuilding trust among everyone to create the foundation for high performance, and then set out and achieved that very goal.

With trust restored, the newly engaged and energized leadership and management teams were able to engage the rest of the employees to join them in achieving the business’s true potential.

Not only did they produce a 37% increase in EBITDA, they were also able to produce the best employee engagement level compared to dozens of other operating units globally, won the “Most Improved Quality” award and produced a culture shift so noticeable that leaders of other business units wrote letters of praise remarking on the amazing transformation, all commenting along the lines of how they had gone from worst to first.

“The results from working with Sage were phenomenal! In addition to improving our bottom line profits by 37% in a single year, Sage worked with my team both collectively and individually to show us how to be better leaders for our people. More importantly, the lessons we learned at work carried over to how we chose to conduct ourselves in every aspect of our lives; making us better spouses, parents, friends, and teammates.” – Duke Gillingham, President AAK Foodservice 2014-2018

 

  National City Bank

After a few smaller projects for the Chairman of the Board, David Andreas, and the senior executive team which had helped to facilitate better executive team coordination and cohesion, Sage’s Scott Coady made the bank a bold proposal. He could teach them methods to transform the culture of the bank from a “quality” and “process” orientation, to a “people first, human centered” way of doing business that would have a dramatic effect on the bank’s profitability and customers.

Key internal processes at the bank were broken, resulting in sudden dramatic shifts reducing the quality of the commercial lending portfolio.  This caused a number of surprises for the Board requiring them to suddenly have to set aside significant amounts of capital for “loan loss reserves.”

As the third largest commercial bank in Minneapolis at the time of the project, the bank had 250 employees and had been in business for 35 years. Additionally, interest income had remained flat at $52.3M for the three years prior.

The bank accepted Scott’s $1.0M proposal and instituted a complete transformation from top to bottom, embracing and relying on the “human centered” approach to radically re-design the key processes connected to loan quality and customer satisfaction.  These changes produced a dramatically higher level of engagement with the employees and the required improvement in the quality and stability of the commercial lending portfolio.

In the first full year after completing their transformation, interest income jumped to $68.4M, an increase of 31%, while the number of employees remained stable.   For key metrics, please click here.  The bank was ultimately acquired for many multiples more than had previously been estimated due to their improved financial results and game changing organizational culture. 

  Crown Iron 

 

Abstract – Global Business  (Private Equity Owned)
# of Employees Annual Turnover EBITDA Was EBITDA Result Amount of EBITDA Increase % Annual Increase Overall Time to Produce Result
225 $150M 13.6 18.1 4.5 33% 2 Years

This company was created by combining several businesses through Private Equity acquisitions to form a global business in the industrial equipment engineering space.  The CEO was relatively new and brought in by the PE owners.  Also on the Senior Team was the founder of the legacy company and former CEO with deep and valuable expertise (who had been cashed out but was still an active member of the senior team,) some of his former direct reports with long tenure at the company, and the former heads of the other businesses that were acquired.   While they all wanted to be successful, they were at odds as to which direction to take the company in and acted more like a management committee or board than a high performing team.

Initially we focused our efforts on creating a true team among the senior managers and on ensuring alignment on achieving what was possible for the business.  Due to the global nature of the business which made it difficult to physically get everyone together very often, it took a year for their new culture of team to form.

From that point on it was all about enrolling the others in the business to embrace and get behind this new effort and direction and to have effective execution which enabled the stellar results in year two.

Key to this success was helping create a culture of innovation throughout the business enabling everyone to contribute their ideas and energy toward creating more value for the customer.

 Office of Financial Planning and Analysis Transformation – OFPA 

Commonly known as a “budget shop” the Office of Financial Planning and Analysis (OFPA) over saw the $1.4B annual spending of the US Federal Government’s office of Assistant Secretary for Preparedness and Response (ASPR) which is part of the US Department of Health and Human Services (HHS).

When Sage started with OFPA, they had a negative culture, depressed workforce and work environment and the lowest engagement score of any of the offices organized under ASPR.  Given that the work that the men and women of OFPA were doing to support some of our nation’s most vital and important functions such as emergency medical response and the early development of vaccines for pandemic bird flu, Ebola, biological and nuclear attack, a method of crisp and timely service to these agencies and authorities that they supported was key.  Rampant bureaucracy, lack of a customer-centric approach and a disengaged workforce combined to produce unsatisfied internal customers.

Their transformation started with a transformation of OFPA’s Director and his Senior Team.   As a result, they were able to lead the creation of the “customer service” culture designed and recommended by Sage.   For their customers to be happy, they had to be well served by the men and women inside OFPA.  For OFPA’s workforce to provide great service, they needed a much better work environment and to have a more human centered leadership approach, which OFPA’s leadership learned how to give to them.

The results were a dramatically improved culture with OFPA’s engagement scores becoming well above average for all groups measured inside of ASPR.

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