|
|
This is only a preview of the paper
Click here to register and get the full text.
Existing members click here to login
|
|
|
Buckman Laboratories (A) If you can't maximize the power of the individual, you haven't done anything. If you expand the ability of individual members of the organization, you expand the ability of the organization. —Bob Buckman, CEO and Chairman of Buckman Laboratories A major Buckman customer in Australia announced plans to commission a new alkaline fine paper machine in 1998. Not only was it always attractive to get “start-up” business but this particular machine tended to use more chemicals than most paper machines. In addition, the customer’s tender was broken into two areas machine hygiene and retention, with annual revenues estimated to be $600,000 and $700,000, respectively. Buckman was a world leader in the area of machine hygiene but had no experience with alkaline fine paper. In fact, the on site person in Australia was young and only had a few years of general experience. Furthermore, Buckman was not a dominant player anywhere in the world in retention, especially for alkaline fine paper machines. Unfortunately the customer wanted to choose one supplier for both areas. Peter Lennon, national sales manager for Australia, and Maria Conte, Area Sales Manager, knew that unlike all of their competitors they could not put together a physical team to work on the proposal so they decided to try a “virtual” global team. Maria sent out a call via K’Netix the Buckman Knowledge Network for help answering very specific questions. She received responses from more than 30 associates worldwide. From that group a team of 10 people from Asia, Africa and North America (U.S. and Canada) agreed to commit to the project on a continuous basis. Not only did Buckman win the contract but also they were asked to trial their program on another fine paper machine operated in Australia by the customer. Bob Buckman considered K’Netix to be “the greatest revolution in the way of doing business we have seen in our lifetime.” He attributed much of the company’s 250% sales growth (over $300 million in 1998) in the past decade and high percentage of sales from products less than five years old (34%+) to knowledge sharing. $7,500 per person per year to implement K’Netix was a significant investment for a company the size of Buckman Laboratories. Yet, over the past five years the company had been able to keep net income in the 3 to 6% range, operating income from 7 to 10.5% and gross profits from 52 to 55%, in spite of worldwide currency fluctuations. By early 1999, however, there were growing financial pressures. In the words of one Buckman executive, “our three target industries are in the tank.” With price pressures in all market segments some executives were 899-175 Buckman Laboratories (A) 2 starting to question whether the value Buckman Laboratories added with K’Netix made sense. According to one, “Is it ill timed?” Company Background Buckman Laboratories had been a leading manufacturer of specialty chemicals for aqueous industrial systems for over 50 years. It coordinated the activities of 20 associate Buckman companies worldwide; 19 had offices in more than 80 countries, marketing and selling more than 1,000 specialty chemicals manufactured at eight factories. The 20th company, Buckman Laboratories International Inc., provided support functions to the profit centers. There were 200 shareholders including employees, directors and outsiders. Buckman family members owned the largest block of stock. Founded in 1945 by Dr. Stanley Buckman, the company, from its beginning, emphasized its abilities to create and manufacture innovative and unique solutions for the control of the growth of microorganisms in customer processes. It started with five employees in a small building existing on land that was once a lumberyard. Although offices and laboratories were located on the first floor of the building, a 50-gallon black iron chemical reactor and a steam boiler were placed in the basement. It was sufficient to supply the initial order for 20 gallons of a microbicide, trade named BSM-11, to the company’s first customer, Whiting Paper Company. Three years later BSM-11 and its derivatives had become the industry standard for microorganism control. A new production facility was built next door and Buckman Laboratories of Canada was formed. During the decade of the 1950s, the company’s customer base expanded to include the leather, paint, sugar processing, agriculture, paint, coatings and plastics industries. In the 1960s new manufacturing and sales companies were formed in Mexico and Belgium. This expansion was followed in the 1970s with the opening of sales and manufacturing companies in South Africa and Brazil and a sales company in Australia. New products were introduced for water treatment, ranging from swimming pools to fresh water, and a new international headquarters housing all corporate activities, including Research and Development, were built in Memphis. New Leadership In 1978, at the age of 69, Dr. Stanley Buckman died of a heart attack in his office. His son, Robert (Bob), who had joined the company in 1961 after earning a degree in chemical engineering from Purdue University and a MBA from the University of Chicago, became the new chairman and CEO. With sales of $29 million (slightly over 50% from six non-US countries) the company employed 493 people (29% were college graduates)--220 in manufacturing and 79 in field sales positions. From the beginning of Bob’s leadership at Buckman, he wanted to change the way the company operated. As he put it, “We were getting our lunch eaten. We were a multinational organization and needed to be a global organization.” He also wanted to change the management style of the organization. “I knew I didn’t want to do it Dad’s way. Every single business decision had to be approved by my father. I thought, this is too much work.” Even though the company had adopted the slogan “Creativity For Our Customers” in the 1960s, Bob was convinced that the company was too product driven. The company now sought to become “customer-driven.” This shift reflected Bob’s belief that “cash flow is generated on the front line with customers, by associates … who have built relationships of continuity and trust, face to face with the customer, one individual with another, over a significant length of time.” Buckman Laboratories (A) 899-175 3 A key to the new approach was to expand the sales force—something Bob had tried to convince his father to do for years. According to Bob, “he wouldn’t add them unless he was convinced they could cover cost.” No sales people had been added in the past five years. At the time the average sales person was producing about $400,000 in sales/year. Bob believed that if the number dropped to $200,000 per salesperson, per year, he still could make money. With manufacturing plants operating at 49% capacity, Bob shifted positions from manufacturing to sales. His initial goal was to increase the proportion of sales people to 25% of total employment. When that was achieved, the new goal became 30%. The combination of decentralization and an expanding “multi-cultural, multi-lingual organization” led to recognition that there was a need for a statement of organizational values. According to Bob, it “evolved out of a need to have a common understanding about how we should relate to each other and to outsiders.” Management asked all associates for input and Steve Buckman, cousin of Bob Buckman and CEO of Buckman Laboratories International Inc., spent 18 months collecting and distilling all of the input into what became the company’s code of ethics (Exhibit 1). The code was captured on a wallet-sized laminated card and passed out to every person in the company. According to Bob, “It represented the collective wisdom of a lot of operating companies.” About the same time a mission statement was developed and distributed. Best Practices For many years the company had been sending out its PhDs to gather best business practices worldwide and then share with all associates in the company. The problem was, according to Bob, “we couldn’t hire enough PhDs and run them fast enough to do face-to-face exchanges around the world and this method of information exchange was quite costly.” To speed up the response to requests for information from the field “runners” were used to identify people who could answer requests, take requests to them, remind them to answer and then send out the answers. Requests were paper-based, sometimes requiring weeks to receive, process, and return—particularly from non-US locations. Additionally, runners usually contacted the people they personally knew, and often the same people answered identical requests over and over again. During a 1984 visit to South Africa, Bob and Dr. Dick Ross, then vice-president of marketing, were sitting around drinking beer after teaching a microbiology class. According to Bob, “He was tired and I was tired and I said ‘we’ve got to do this differently.’” Not long afterward Bob read Moment of Truth by Jan Carlzon, the former head of Scandinavian Airlines System (SAS). One sentence in particular struck a chord with him: "An individual without information cannot take responsibility; but an individual who is given information cannot help but take responsibility." According to Bob, “I spent the next two years trying to prove that statement either right or wrong. I found out it was correct, not 100% of the time, but a high enough percentage to bet the farm on it.” In 1986 company leadership began to address a more systematic approach to best practices. First, a database was created to which all general managers were connected using IBM’s network for email. Bob was not satisfied. “It was more patchwork and cumbersome than coherent and we had one phone call for email and another for other stuff. Each person had to have a different user name and access code in every country.” A more serious problem was the managers’ reactions. According to Bob, “During the first six months the general managers didn’t share a damn thing. They might send messages like ‘how are you today?’” He concluded that the reason they were not using it was that “they already had access to all the best practices. The people who really needed the information were the people in front of the customer.” At the next planning meeting Bob announced that field salespeople now were to have access.
Approximate Word count = 6768
Approximate Pages = 27.1
(250 words per page double spaced)
|
|
|
|
|
|