How did a bold, curious leader use innovative business ideas to turn Laclede Chain Manufacturing around?
In my new book, “On the Brink: A Fresh Lens to Take Your Business to New Heights,” I tell a story about a client, Laclede Chain, that was “on the brink.” Stuck or stalled, however you might like to call it, the company had grown and captured market share but then had reached the point where leadership had to rethink the company’s business model.
Similarly, with today’s market growing but slowly, we at Simon Associates Management Consultants (SAMC) are getting calls from across North America from companies like Laclede Chain that are also facing that “stall point.” They rebounded well from the 2008 Great Recession — although they aren’t quite sure why — and now they are watching as sales slow, client companies get acquired or merged into other companies, and buying processes change. They, once again, have to reinvent their businesses. And once again, they aren’t quite sure how.
How did Jim Riley and his team at Laclede Chain do it? Could their “lessons learned” help you?
How did a little anthropology help?
Let me share with you Jim Riley’s story of how, when had to reinvent Laclede Chain, he was able to see possibilities all around him by using the methods and tools of corporate anthropology — namely, how to step out and look at your business with fresh eyes. (To try some of these tools yourself, check out the tool kit we offer at www.andisimon.com.)
The Laclede Chain story
In 2001, Riley had been part of a group which purchased Laclede Chain Manufacturing Company in St. Louis, MO, a 150-year old company that had started as a blacksmith shop making hardware for westbound wagon trains but that was now focused on snow tires. As its new president and CEO, Riley first grewLaclede’s market share and then its margins. By 2008, Laclede was an industry leader, with approximately $30 million in revenue.
Around that time, two big problems beset Laclede. First, the Great Recession—like thousands of other companies, it was hit hard by the global downturn. In addition, its business was dependent on snow, as most of its revenue came from the sales of snow chain for cars and trucks.
I met Jim in 2009 when he came to one of my Vistage “Change Matters” workshops. (The Chair of Jim’s Vistage group, Allen Hauge, and I work together to help group members understand strategy.) In that workshop, I focused on helping leaders “see with new eyes” and take concrete steps toward building their businesses. I like to remind my audiences that in evolution, it is not the smartest or the strongest that survive but the most adaptive. These are changing times that need new adaptations.
Riley took this message to heart, and it didn’t take long for him to see Laclede with those new eyes and reassess what needed to be done. He realized that Laclede was very good at selling snow chains but in order for the company to keep growing, it would need to find new kinds of customers and innovate new products.
From observation to innovation
After the Vistage workshop, Riley went back to his leadership team with a mission: to make changes inspired by his “seeing with new eyes” and taking a good hard look at Laclede’s corporate culture. Here are some of the key changes he initiated that turned his business around:
- Asking Hard Questions: First, Riley started by asking hard questions. In his words: “We really had to figure out where else we could start selling chain.” He asked:
- “What can we do to grow?”
- “How do we open up sales?”
- “How can we sell more chain, maybe not just snow chain?”
- “What are our customers asking for that we aren’t selling?”
- Listening for Opportunity: Riley knew that customers were asking for things from his service team that Laclede didn’t currently offer. He realized that those unmet needs could be vital to the company’s growth. He started listening in on customer service calls and realized that his telephone operators were turning away potential buyers simply because they were asking for products outside of Laclede’s core business. What, he asked, was stopping the company from making those items? Also, why not ask his employees what they were recognizing “out there” as unmet needs?
Interestingly, this is something I see a lot in businesses that have stalled. Once a company has started telling its story in a certain way, it puts all of its energy into making the story come true. This is great…until the story isn’t working anymore and/or it comes time to create a new story. Where do those new ideas, and that new story, come from? Often, right from the company’s customers.
- Intentional Change: How a change process is designed and managed is crucial to the success or failure of organizational change. Riley focused on two of the keys to making change work: delegation and decentralization. The more employees are on board with the changes and actively take part in making them happen, the more successful and sustainable those changes tend to be. This means having employees throughout the company take initiative and take risks. It also means that executive leaders must create and maintain a sense of trust and value.
- Bold, Curious Leadership: Laclede’s CEO recognized early on that change in his business had to come from change in the culture. Instead of a culture of hierarchy and status quo, Riley put the power to make decisions and try new things into the hands of his employees. Five years later, Laclede now employs more than 50 people making bird cages. (A long way from snow chain!) How did this happen? Because Riley encouraged his people to collaborate, to help each other and to work as a team. This completely revolutionized his company’s tone, culture, and ultimately, what it became.
These kinds of anthropological techniques focus on the kind of organizational and cultural change that can happen when a strong leader makes a bold change, stays curious and empowers the employees around him. In 2010, Riley, another partner and a private equity group took the next step and actually bought Laclede Chain. In 2011, just one year later, business jumped another 40%.
Ready to restart your company?
Are you seeing examples of this kind of bold leadership and culture shift in your company or in companies around you? Or, are they maybe there but you need “fresh eyes” to see them?
You can read more stories like Laclede Chain in my new book, “On the Brink: A Fresh Lens to Take Your Business to New Heights,” available at Barnes & Noble, on Amazon, in Hudson News at airport/train stations, in bookstores near you…and on my website, www.andisimon.com.
Want to learn more about our workshops, seminars and consulting support? We are always ready to help you “soar” so you are no longer teetering “on the brink.” We would love to hear from you.