How Bedcolab achieved growth despite a labor shortage by increasing productivity and improving mobilization
In 2015, manufacturing company Bedcolab found itself with its back against the wall. A year after a 50% cut to its workforce, due to a sharp drop in sales, strong growth resumed and the company’s manufacturing operationswere struggling to keep up with the pace of growth. Whereas most other companies in the same situation would have looked to recruit more staff in order to support production, Bedcolab’s management asked themselves if their existing teams could absorb this additional workload. This question is even more relevant today, in the context of labor shortages and a mismatch between available talent and the needs of the labor market.
Indeed, it’s rare to find a company that, instead of increasing its capacity immediately, starts out by examining whether their initial assets are being used to their full potential, whether best business practices are consistently implemented, whether identifying opportunities for improvement is a day-to-day priority or if the flow of information is efficient.
These issues fall under the responsibility of first-line managers, but how many of these managers have actually undergone management training? How have they been supported and developed during their transition from technical experts to team leaders, now held accountable for team performance? Even with decades of experience, first-line managers often measure their own performance by their ability to resolve crises on a daily basis. Rather than being team coaches or leaders, they remain technical experts, despite their supervisory This has major repercussions for many companies: recurring problems, confusion regarding performance accountability, “blame culture” within the organization, investments failing to deliver the expected results, etc.
Bedcolab’s strategy and visionary approach in resolving its production issues has been to invest first in its human capital and then in its infrastructure. The company therefore chose to strengthen its management capabilities at the point of delivery before embarking upon a recruitment drive or before purchasing new machinery. The goal: to increase productivity and motivation. The results were conclusive. Five years after cutting its workforce by 50%, sales have risen by 135% and the company operates with 40 fewer employees than would have been necessary to deliver the same sales revenue 5 years ago. By investing in management at the point of delivery, Bedcolab has succeeded in increasing productivity by 40%, has raised its production capacity by 30% without any injection of capital, and has also reduced staff absenteeism by 40%.
Bedcolab’s management called upon Proaction International to obtain the fighting force necessary to accelerate the implementation of the management team’s vision: “I knew where I wanted to go, but the need to act was urgent and the Proaction International team had the expertise, the experience both in Québec and internationally, and the references in the manufacturing sector.” Three main change areas were prioritized:
1. IMPROVING THE EFFECTIVENESS OF MANAGERS AND OF THE WORK ENVIRONMENT
Through a better understanding of their roles, first-line managers started moving away from their reactive mode and began to place more emphasis on monitoring performance, on planning and on team mobilization. By shifting their focus away from manual tasks and the resolution of recurring issues, Bedcolab’s supervisors have adopted a management approach aiming to steer their teams’ efforts, to recognize their work and to empower each employee towards communication and the resolution of day-to-day issues.
2. ONGOING USE OF PERFORMANCE INDICATORS
The ability to meet daily targets depends on one’s capacity to measure performance in real time. Yet, too many companies have insufficient knowledge of their production standards or are unable to justify a wide variation between technicians doing the same job. At Bedcolab, supervisors placed particular emphasis on determining production standards, on respecting best practices and on communicating the importance of always reaching targets. This focus gradually allowed the company to set ever more ambitious performance targets and therefore become more competitive.
3. INTRODUCTION OF A CONTINUOUS IMPROVEMENT TEAM
Introducing a continuous improvement team has become essential for any company’s competitiveness in our ever more complex, competitive environment. Companies aren’t just hounded by local players any more. Technological improvements and the proliferation of international trade deals are factors that influence competitiveness, yet over which companies have little control. At Bedcolab, the introduction of this team allowed the work initiated by Proaction International to be continued, and for management coaching methods to be applied, ensuring the necessary management maturity to achieve world-class performance.
The case of Bedcolab demonstrates the determining role of first-line managers on business productivity and mobilization. This is all too often neglected by management teams, despite the fact that it is a key factor to competitiveness. Before investing time and money in recruitment during a labor shortage, businesses must first ask themselves whether their workforce is conscious of their daily performance levels, and whether they are constantly reliving the same issues, which impact upon performance. In many cases, they already know the answer…
Click here to learn more about how Proaction International's experts can help develop your teams' leadership to increase business productivity and mobilization.
Ready to take action? Let's discuss your project.