Downturn Management

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Final Presentation

John W.T. Cronin

Franklin Pierce University

Downturn LeadershipPractical advice for new managers

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• Goals– Learn– Share

• 2007 vs 2009 economy– Markets– Employment– Productivity

• Interview two managers– Top-level, 20+ yrs exp– Mid-level, 7 yrs exp

Introduction

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• Oct. 12, 2007– Dow Jones sets all-time

HIGH closing at 14,093

• Mar. 6, 2009– Dow Jones sets 12-year

record LOW 6,626

Stock Market

-53%

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• US Unemployment Rate– September 2007 = 4.7%– September 2009 = 9.8%

• Job Loss– Slowing, but ongoing– Hardest hit:

• Construction• Manufacturing• Retail trade• Government

Employment

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• Productivity is flat from 2007-2009

• Q2FY09 productivity is up 6.6% compared to Q1

Wages up + Output up + Hours worked down Increased efficiency

Productivity

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• Founded 1819 (190yrs)• Privately held• Paper products• 160 Employees in NH• Unionized labor• $80-85M Annual Rev.• Eco-Friendly

Company Profile

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• Helping reinvent the business

• Title: VP Supply Chain• Position: Top Management• Sector: Manufacturing• Experience: 20+ years

Chris Benincasas

“Leaders emerge during downturns. As veils are lifted on underperforming businesses people gravitate toward fresh vision.”

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• Motivation– Fear and loathing ineffective– Don’t over-staff– Ask more, give more

• Corporate interest– Churn hurts P&L– Erodes a business

Personnel

“The real capital leaves at 5PM. It’s not the plant, equipment, IP or cash….it’s the people.”

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• Defend COH/Resist RLC– Shorten Daily Sales

Outstanding “DSO”– Stretch terms with vendors– Tighten terms with customers– Don’t tie up cash in inventory

• At least 12 turns per year

• Safety, Quality, Production.

Cashflow

“Requisitions aren’t green…but they should be. Get everyone thinking about how they can conserve resources.”

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• During good times– Invest in systems– Seek out partners– Work on culture

• Size to Sales– Headcount, equipment, plant,

inventory, product lines… everything…honestly

Preparation

“Complacency is a death knell. When things are good, get people out of their comfort zones.”

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Company Profile

• Founded 1910 (99yrs)• Privately held• Military Vehicle Armor• Non-union labor• Estimated total rev: >$350M• Location annual rev: $25M

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Chris McGinnis

• CoorsTek Armor Solutions• Title: Plant Manager• Position: Mid-Management• Sector: Manufacturing• Experience: 7 years

“You’ve got to get your hands dirty. You can’t control production with emails and spreadsheets.”

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Leadership

• Supervisors set the tone• Energy and optimism

– Starts with your health– Drink the Kool-Aid

• We’re all in the same boat

“Treat people fairly and stay visible. Your people should see you working as hard as they do.”

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Efficiency

• Cross-training• Build a culture of quality• Focus on value• Move forward

“Get it right the first time. Sounds simple. It’s not. You’ve got to get to root cause on non-conforming product and fix it or it’ll reappear at the worst possible time.”

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US Bureau of Labor Statistics, OCT-2009, The Unemployment Situation – September 2009

US Bureau of Labor Statistics, SEPT-2009 Productivity and costs second quarter 2009, revised

GoogleFinance, “Dow Jones Industrial Average”, SEPT-2009 Retrieved 10-09-09 from http://www.google.com/finance?client=ob&q=INDEXDJX:DJI.

References

http://www.nrx.com/solution.php?pg=16

http://media.realscoop.com/static/upload/image/BillClintonPresident_.jpg

www.coorstek.com

www.mpm.com

Images