The Challenge
A large industrial conglomerate operated multiple businesses including paper, textiles, chemicals, and energy. When financial statements for the paper and chemical divisions were separated, it became clear that the chemical business had been relying on the profitability of the paper unit. Once evaluated independently, the chemical division showed a loss of $2.8 million against a budgeted profit of $28.6 million for a six-month period.
Leadership began considering shutting down the business, which further reduced morale and created widespread employee disengagement. A comprehensive assessment of customers, employees, and internal processes revealed the core problem: customer satisfaction was strong at 72%, but employee engagement was critically low at 51% and process performance stood at negative 13%.
The Approach
The turnaround strategy focused on improving people systems and process capability through a structured People Excellence Roadmap. Using a 22-step approach rooted in Self-Directed Teams:
- The business shifted from a functional structure to a process-based model.
- Cross-functional teams were created along the value chain.
- Team leaders were elected by peers, employees were multi-skilled.
- Most operational and quality tasks were managed directly within each team.
- Training, transparency, and shared decision-making helped rebuild trust.
The Outcome
Early results were unstable as teams adjusted. By month nine, performance began improving significantly. People scores rose from 51% to 67%, customer scores increased to 78%, and process performance improved from negative 13% to positive 65%. The business achieved an 8% net margin, increased revenue by more than 70%, and delivered savings of $3.4 million. This reversed the closure risk and secured the future of the chemical unit.