£½million in-year savings for global engineering consultancy
This market leading engineering consultancy business had deep concerns about the efficiency and effectiveness of its UK defence and technology business. The divisional managing director kicked off a performance review by a small team of Monro Consulting specialists. A change programme was established to address the problems and deliver improvements.
The division had been formed through organic growth and the acquisition of six distinct businesses over the previous decade. It had been through several further organisation changes including, most recently, the implementation of a matrix structure mandated for all operating divisions by the Group Board. The divisional managing director had been in post for a year and, despite reasonable performance in that first year, had growing concerns about the division’s ability to achieve its challenging growth targets over the next few years.
Key problems and challenges
The division had a strong reputation in its key markets and a track record of profitable delivery. However, it was facing a significant drop-off in its “win-work’ rate and it had a top-heavy staff pyramid, weighted towards the higher, more costly grades and with low utilisation rates. Staff morale was low and it was suffering from very significant internal operating inefficiencies and high overheads. The managing director needed to act decisively and quickly to turn the business around.
Monro Consulting was commissioned to carry out a high level organisation performance review – a high spot review. The review focused on assessing the effectiveness of the matrix organisation structure that had been designed at group level and rolled out across all divisions over the previous two years.
The high spot review highlighted eight key performance issues, which were reviewed and prioritised in collaboration with the managing director and his senior leadership team. A series of focused performance improvement initiatives were kicked off, including:
- the fundamental re-design of a key underpinning business process;
- the identification and confirmation of a subset of key performance indicators (KPIs) to monitor the business;
- a reduction in the top tier of management of the division;
- a review and restructuring of the overall operating model to establish a much tighter ‘handshake’ between the market demand and capability supply sides of the business; and
- the identification of potential short, medium and long-term cost reductions.
Our recommendations led to an internal change programme being established to manage and deliver the changes.
The change programme was set up using internal resources, with Monro Consulting providing specialist advisory support to the internal work stream leaders. In particular, we helped the programme team during the mobilisation stage to build momentum and ensure the change effort focused on the highest priority issues. We also supported and facilitated the internal team in designing and implementing the improved resource scheduling process.
The new, smaller senior management structure was established immediately following the high spot review and the tactical cost reductions were implemented within the first two months. The new handshake planning process between market and practice teams was inaugurated with Monro Consulting facilitating the first run-through of the process with the senior management team. The new resource scheduling process was designed and implemented with supporting changes to the staff scheduling IT application.
“I was very pleased with the work that Steve Bannister and his colleagues delivered. We had a tough first year – mainly due to adverse market conditions – but the organisation simplification and improvement in our processes recommended by Monro Consulting are now really paying dividends”
Managing Director, Aerospace, Technology and Security Division
International Engineering Consultancy Business