TIME FOR A TURNAROUND SALBERG EMBRACES CHANGE TO REAP REWARDS WRITTEN BY JOHN HARVEY
Following a sea of change in the wake of economic hardship, Salberg is enjoying record levels of success in a booming era for the company.
SALBERG CONCRETE PRODUCTS
Established over 40 years ago, Salberg has been a precast concrete industry stalwart with a wide range of specialist products and a diverse customer base. However, since founder Dave Salberg passed away seven years ago, the company struggled in the face of the global economic crisis and desperately needed a new and innovative approach to business in the 21st century.
o this end Dr Rudy Absil, one of the country’s top turnaround
month on month, to date. “It’s been an impressive four quarters
specialist, was brought in as CEO by the newly appointed
and the outstanding performance is continuing. May has once again
Chairman of the Salberg Group, Barbara Parker. Twelve
broken all sales records and we are currently managing our biggest
months later Salberg is closing its financial year with the best results in recent years. According to Absil the new team broke company records in the first six months and has subsequently broken their own records
back order book ever”. Absil attributes successful turn-arounds to five key elements: • Appointment of competent business leaders • Effective cost and cash flow management (Rightsizing ) • KPI based performance management and clear role definition • Culture of learning • Effective and efficient communication channels
Implementing the five key drivers “When I arrived the key executives had already been removed and mind-set of change introduced but it was a long way from a sustainable turn around”. “The first order of the day was to surround myself with competent decision makers in all the key business areas, namely Operations, Engineering, Finance and Human Resources”. “Secondly, we had to rightsize – as oppose to downsize, the staff and in so doing we were able to streamline processes and develop more effective and efficient channels of communication”. Thirdly, we had to develop a culture of continued competency. This was achieved through, among others, the introduction of participative performance management, targeted training and ongoing process analysis and improvement by both managers and workers. “Creating visual indications of how the business is doing to make staff constantly aware of performance has been critical. Performance targets all for divisions are monitored at all levels throughout the organisations at meeting and/or forums daily, weekly and monthly.” “We applied a lot of the consultancy principles including short interval controls, visual measurement and balanced scorecards so people can see where we are, how much we make, how much we sell, the cost of production and cost of maintenance, among others, on a daily basis. Making people aware of how they’re doing makes it easier to improve performance.”
Company culture In addition to developments relating to operations and production, Absil also identified the need to change the company culture and reward employees for good performance. “Prior to the change problems were handling through aggressive and counterproductive warnings and dismissals. A culture of low C
team work, covering-ones-back and grapevine gossip emerged in an M
environment where an average of 120-150 warnings were issued a month. In a medium size company this is excessive”.
“Pivotal to change”, suggested Absil, “was the shift to recognition MY
and reward”. “Giving the workforce incentives and providing CY
opportunities for further training has been crucial in the company’s CMY
success. A competent, motivated and enthusiastic staff are central to a thriving business.”
“We have a monthly incentive for the best employee and a quarterly incentive for the best production team. Every 2 nd week we select the best performing team and on a Friday afternoon they have a BBQ. The sales team now work on commission and we are seeing the obvious results.” “We have developed extensive training, not only on-the-job and technical, but teaching supervisors the principals of business management and the all-important leadership and management of people. We achieve this through regular formal and informal educational sessions during lunch breaks, after work and Saturdays. The staff are beginning to experience the tangibly value of knowledge and skills”. “Living in a country where people have no had little or no access to this makes a great change. We found many supervisors, irrespective of race or gender, had technical knowledge and understood the finer details of the job. But there was a big gap in business and leadership knowledge especially around the management, motivation and coaching of people.”
Recent developments With banks and borrowers reluctant to lend money in today’s climate, Absil admits Salberg’s biggest challenge relates to recapitalisation. “To date we have financed our own recapitalization and, despite the pressure, evidence of capacity through the performance of the past 12 months is a keen indicator of our future growth potential,” states Absil. “We have revived two key value propositions over the past 12 months. ‘Seize-the-Moment’ in Sales and ‘No-Compromise’ in product quality and reliable delivery. We are winning over customers from our rivals because of our ability to live our commitments”. According to Absil electronic are always ditched in favour of a faceto-face engagement where necessary. “Our sales team are trained to not only sell but to service our clients. The complexity of our industry demands a heightened awareness and understanding of the client’s requirements, project to project. We specialise in delivering efficient and cost saving solutions to our clients and in return our client’s retain a deep and abiding appreciation of us. We are winning market share
SALBERG CONCRETE PRODUCTS
one satisfied customer at a time”. Absil has also revived the company’s unique and original
development plan,” states Absil. “The first step is to make the current business highly profitable and the second is to expand our production
requirements”. With global economies in
capacity with modern technology”.
Innovations Division which up
“We have recently returned from a trip to Europe where we
until the loss of its founder, had
companies reeling from the
investigated new technologies and necessary contacts made to
been core to the company’s
manage the planned road to long term profits. We are excited about
brand. As a very proud CEO,
recessions, Salberg is capitalising
the possibilities new technologies open up for us and we intend
Absil highlighted the recent
on the strength of their product
winning of the 2012 Concrete Manufacturer (CMA)
Award for the company’s ATM blast proof housing unit. “Providing cost effective and
& services market and the wins from the turn-around to generate turnover.
There are no plans to slow
solutions is central to our growth
down in the next five years with
plan for both our local and
Salberg keen to continue and
international clients who find our
build on recent successes.
services and the rand favourable
“I’m excited to find that we’ve evolved a team that is forward looking while being able to deliver in the moment. Business and markets are more sophisticated and it’s our business to stay focus and stay in front”, concluded Absil.
capitalising on it in the next financial year”.
“We have quite an aggressive
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