Case Studies Explore the Benefits and Challenges of an Independent Director on a Middle Market Manufacturing Board of Directors
February 9th, 2023
Many middle-market advanced American manufacturers are strong companies, building amazing products and creating well-paying and meaningful jobs.
But many could be better.
The gap can be traced to the difference between how they run the back end of their business compared to the front end. Operations and manufacturing are run with rigor, precision, and carefully engineered processes. In contrast, revenue growth is frequently more haphazard; viewed as a black box.
It's understandable. Often the culture of the company is built around the technical products, and key employees are themselves products, in turn, of that environment. Traditional marketing and sales approaches served the company well in its growth years, but as buyers and marketing expectations change, results are less predictable.
Management may not have significant, recent, outside sales and marketing experience or context. They're world-class experts on manufacturing best practices, but don't have familiarity with contemporary marketing and sales best practices, nor the background to evaluate, benchmark, and drive consistent revenue growth.
In rapid-growth companies, investors often augment the directors and boards with independent experts, which add experts, perspectives, and skills to support management. But in long-standing traditional industrial companies, these critical skills are often lacking at both management and board levels.
There's an opportunity to improve the function of a private company board of directors with the addition of independent directors with revenue growth related skills.
This is the focus of two case studies authored by Ed Marsh, an NACD Directorship™ Certified Independent Director, and presented in conjunction with Board Options, a retained search firm for independent directors run by Larry Stybel and Maryanne Peabody.
An Independent Director, Inertia, Tradition, and a Family Business Collide
Case Title: YOU ARE CHAIR OF THE BOARD OF A FAMILY-DOMINATED COMPANY. AN OUTSIDE BOARD MEMBER IS PROVIDING A PERSPECTIVE YOU HOPED SHE WOULD PROVIDE….AND NOW THAT’S A PROBLEM.
Downloadable Case: Independent Director, Right Ideas, Wrong Fit?
Executive Overview: Robbins Industries recently brought an experience executive in to run the privately held middle market machinery company. The CEO agreed to take the role contingent on the board adding several critical skill sets via new independent directors. Now one of them is at loggerheads with long-time executives. How can this be resolved?
Recorded Discussion (video):
Subscription Models, Traditional Sales, Paralysis in Business Innovation
Case Title: THE BUSINESS STRATEGY THAT "GOT YOU HERE," IS DECAYING. AND THERE IS THAT NEW MODEL THAT COULD DESTROY YOUR BUSINESS…..
Downloadable Case: Changing Markets; Stagnant Strategy
Executive Overview: Sigma Industrial Technologies manufactures machinery used in the food processing industry. Rising generations of buyers are seeking integrated Product-as-a-Service (PAAS) solutions that integrate machines, support, and data analytics. Sigma's sales team resists selling subscription-type models, preferring traditional capital equipment sales approaches. And now the industry scuttlebutt is that prime competitor, FEI, is making the first move. Can the company change? Should they?
Recorded Discussion (audio): Listen here
About Consilium Global Business Advisors: Consilium assists American manufacturers in applying process excellence to their business development. In other words, we help lean, well-managed companies with rock-solid bottom lines effectively and consistently grow their top lines to match. We work primarily with mid-size industrial manufacturing and capital equipment companies, guiding them through a journey toward Overall Revenue Effectiveness™.