12/01/2023
How a legacy family-owned millwork dealer with strong brand recognition transitioned to a President from outside of the family.
EXECUTIVE SUMMARY:
A family-owned and operated millwork dealer had a long legacy and strong brand recognition in the local market. The owner struggled with creating a culture of accountability and hiring a strong leadership team. This led to lack of empowerment of employees, no metrics to drive high performance, and a break-even 0% profit on a $20m business.
Without a succession plan in place within the family, the owner needed to hire a new President to take over the day-to-day operations.
Misura Group recruited an executive who took on the financial and cultural turnaround, resulting in revenue of $41m with 8% EBITDA and a high-performing team.
THE CHALLENGE:
LACK OF EMPOWERMENT, ACCOUNTABILITY, AND PERFORMANCE
Our client is a family-owned and operated millwork dealer selling to single-family home builders and remodelers. The owner spent years operating the company as President, building a state-of-the-art custom millwork manufacturing and distribution facility. They had a long-standing legacy and strong brand recognition in the local market.
What the owner struggled with was creating a culture of accountability and hiring a strong leadership team. This led to a lack of empowerment of employees, no metrics to drive high performance, and a break-even 0% profit on a $20m business.
Without a succession plan in place within the family, the owner needed to hire a new leader to take over the day-to-day operations.
OUR SOLUTION:
CONSULTATIVE PARTNERSHIP
As a full-service recruiting partner, the first thing we did was consult with the owner to help them understand the importance of self-awareness to their strengths as an owner and limitations as a day-to-day operator.
Based on the challenges the company was facing, we identified the need for a large corporate executive leader who could embrace the family legacy and tradition while respectfully shifting the business model and raising performance standards.
CRITICAL ACTIONS
Maintaining a highly confidential search to not alarm the long-standing customer base and employees
Including the owner’s children in the hiring process, they sit on the board and this was a key step to gain their support of the new leader
Enlightening the owner to understand the value of the position and the ROI expected from the role was essential in attracting and retaining the desired top-performing leader
IDENTIFYING TOP TALENT
Hiring the first non-family President in the company’s history was a giant step. The new leader needed to gain the trust of the long-tenured team who have been protective of the family culture. While protecting the established brand and reputation in the local market, the President needed to implement a culture of accountability and improve performance to drive company growth.
THE RESULTS:
The new President led an activity-based costing analysis of the customer base, resulting in walking away from low-margin business. To improve the company’s value proposition and increase margins, they held town hall meetings to better understand the customer’s wants and needs. These town hall meetings were also used to inform customers of the breadth and depth of their service offering. This action increased total sales per customer, raising awareness to the fact that they are a one-stop solution for all millwork needs.
FINANCIAL IMPACT:
Having inherited $20m with 0% profit, the new President grew the business to $41m and 8% EBITDA.
CULTURAL IMPACT:
The new leader earned the team’s trust by going on deliveries, being hands-on in the business, and listening to everyone’s perspective, remaining open to ideas.
Now 40% of the employees are new to the company since the President started, attracting talent that wants to compete and perform at a high level.
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