“I'm almost 70 years old and I'm already tired,” said Héctor, founder and leader of the food company that, without a doubt, is making a strong presence in the market. “I feel like it's time to start delegating more,” he added.

With 40 years in the market, the firm had gone through many changes, fluctuations and crises. But it had always moved forward thanks to the drive and intuition of the person who created it, towards the 1970s. Enjoyment was also part of the demand: "I want to travel more, share more time with my grandchildren... but day-to-day life consumes me and, when I detach myself a little, things don't work."

The final objective was clear: to achieve an effective delegation that would break with the “sun structure” that had been generated around Héctor throughout the life of the company. It was time to carry out an in-depth diagnosis of the situation to detect key areas for improvement.

Diagnosis and plan

We start working at the diagnosis stage. Héctor seemed very determined to change the way the organization worked and the relationship between his collaborators. We conducted a comprehensive review of the company to identify areas that required modifications and improvements. Thus, we interviewed the most representative collaborators, analyzed the available economic-financial information, and observed how the organization and its processes worked.

We were able to verify that the founder directed every movement, made all types of decisions and definitions, and was involved in daily operational tasks. These decisions were basically based on his intuition. Although Héctor said that the management numbers were available and that this was not the root of the problem, it was clear to us that it was the tip of the iceberg. Because although there were accounting numbers for the company, there were no indicators that reflected its “health”: growth, real profitability, etc. Even Héctor was also not aware of the real profitability that the business was generating. Thus, the lack of management information and measurement parameters made decision-making arbitrary, effective delegation was not viable, and a strategy without clear objectives generated doubts about the direction of the company.

On the other hand, we found that many work processes were not clear to employees, in addition to being rudimentary and inefficient. When asked why things were done that way, the answer par excellence was: “we always did it that way.” Many tasks had to be modernized with appropriate technology and computerization. And, the staff, trained in the use of the new tools.

We detected that there was no budget forecast for investments, nor a salary assigned to the owner of the company (a key factor; you can learn more about this in: https://www.dinka.com.ar/retribucion-del-empresario-sueldo-o-dividendos.php)

After this comprehensive review, the focus of the work was defined:

1- Identify where the business is leveraged, with the corresponding numbers (non-existent until now).

2- Once these key areas have been identified, assemble the work teams so that they function professionally.

3- Implement a system of effective delegation of tasks, so that the parties could carry out their functions with control and autonomy.


The management

We began to work on the parameterization of management information, developing control panels that would allow us to analyze the information for decision making. The idea was to begin to visualize the company “into the future”, planning based on measurable objective parameters. By the way, it was a very different look than the one Héctor had been using, and we were not surprised by his resistance at first. "I hired them for another purpose. What I need is more free time, for them to help me organize, but what they are doing so far is generating a waste of time, and more work for me and my collaborators," he repeated in each meeting.

In this type of project, it usually happens that the client has a pre-conceived idea of ​​the problem. It is instinctive to believe that, to simplify day-to-day life, it is necessary to start acting directly on work processes. But we must understand that, if one is wrongly focused, acting on processes to be more efficient can turn out to be exactly the opposite of the objective.

From our consulting firm, we seek not only to help clarify the objectives and the way of analyzing the business, but we also assist in its implementation, in the search and definition of tools to do so. Therefore, we asked the businessman to trust us. We understood their feeling of “suffocation”, but that for process reengineering to be efficient, it had to have good planning and a clear horizon as a starting point. Every change process takes time, and stages are necessary to achieve real change. Héctor understood it and gave us the opportunity. This is how, during the first months of work, we focused on the control panels, to generate the indicators that would show the profitability of the business and where it is leveraged.

At the same time, we suggest hiring a General Manager. The proposal was to start working with him from our consulting firm already during the change process. Thus, aligned with the company, he could accompany Héctor in its general management.

The processes

Once the real situation of the company was captured and we identified where the focus of the business should be, we detected which processes generated value, as well as which could be delegated to a greater extent, and this allowed us to prioritize them.

For example, one of the most conflictive was the coordination between Sales and Warehouse-Logistics. Sales planned deliveries that could never be met, either because Depósito put together the orders poorly, or because deliveries were delayed. This resulted in customer complaints and claims, returns, and re-work throughout the chain. Thus, Héctor ended up getting involved in the entire chain, asking what had happened with such an order and why it had not been delivered correctly. He tried to solve each case individually, looking for those responsible and maintaining: “If I am not here, no one will do anything and the ship will sink!”

To find the solution, we turn to the management boards. We noticed that there were many very small orders, which generated a lot of work, mixed among the important large volume ones. They were being too flexible with the minimum quantity, even though the company's customers were wholesalers. Under the motto “We want to leave the customer happy”, all types of orders were accepted and, ultimately, all customers ended up being neglected. In conclusion, this was not a process problem, but rather a commercial strategy problem, which was detected thanks to the first stage of work. Once again, resistance to change was present in the leader of the firm, when we proposed modifying this sales condition (the minimum orders), but he finally understood that the company was no longer the enterprise of the beginning, and that this change did not imply giving less service to customers, but quite the opposite.

On the other hand, deliveries were always scheduled for 48 hours after the order was placed, regardless of the customer's location. This generated very long routes each day and additional expenses, disorganization, non-compliance with scheduled delivery times, etc. In this case, although Héctor's custom indicated that this was the way to make deliveries, he agreed to plan them by area, according to the days.

The challenge

Currently, we are working on the other processes pending to be redefined, and on the incorporation of new technologies, to then concentrate specifically on commercial management. Héctor is now much more relieved, seeing that the changes have very positive results. And, step by step, he disengages himself from some tasks. By the way, this does not mean that you stop supervising the general activity of what will always be “your company.”

Sandra Felsenstein

Founder and director of DINKA, a comprehensive consulting firm for SMEs, dedicated to the development of customized projects.

She is an industrial engineer from the UBA, with a postgraduate degree in Strategic Marketing. He advised more than 40 entrepreneurs and businessmen, both in the startup stage and in the resolution of structural and management problems.