In a conversation with Private Equity-backed Architectural Light Works (ALW), CEO, Jeff Croskey talks about why getting started early with an outside consultancy like TBM is critical to the success of value creation initiatives to ensure results are delivered and gains are sustained.
Listen to the video or read the transcript below:
I would recommend that a Portfolio Company (PortCo) engage with TBM as early as possible during the ownership period. Specifically, I mean within the first six to 12 months would be ideal.
The reason behind this suggestion is based on my own experience. Initially, I was a bit hesitant. I've worked with many consultants in the past, and while they can deliver impressive presentations, following through on their claims, meeting expectations, and achieving goals is often tough for them to deliver. Past experiences of unmet expectations made me somewhat reluctant to invest significantly in a Lean Transformation Program. However, Ranjith, Gustavo, and the team have shown me that TBM is indeed a valuable investment. This is why I emphasize the importance of early engagement – the benefits became apparent.
We discovered that having TBM actively involved in our daily operations greatly aided in identifying previously unknown issues, which was particularly crucial for our remote operation in Mexico, considering our base is in the US. This improved our understanding of day-to-day operations beyond just performance metrics. It enabled us to address issues that required correction.
As soon as we started our TBM engagement, we involved key individuals such as Ernesto, Gustavo, Ranjith, and others, and challenged the team to eliminate bottlenecks, implement lean practices, and enhance productivity while lowering costs.
This led us to promptly achieve our EBITDA goal. From my perspective, this is a critical factor for the board to consider – initiating such efforts early. You achieve that run rate, you enhance financial performance but also positively impacts trailing 12-month averages (TTM) from the outset. Delaying this process can prolong the time it takes to make a positive impact on TTM.
Our experience with TBM has been positive. This journey began with Ranjith and Gary's contributions and the comprehensive nature of the presentation. Among various presentations from other firms, TBM’s stood out as the most thorough and substantive with clear process definition. It wasn't merely a collection of catchphrases and slides. While it might have been costlier than the others, the value we saw justified the investment.
Key figures like Ranjith and facilitator Silverio, along with our local manager Gustavo, have played pivotal roles. As our collaboration progresses, we're delving into areas such as purchasing and sustainability. This long-term approach is essential – we aim to avoid discontinuity after a few months. If we were to halt our engagement, our team might also cease much of their efforts. The plan involves a strategic glide path to potentially support us in purchasing and organizing sustaining events. Integrating these activities into our calendar and budget is crucial.