Norton Lily

Topics: Balanced scorecard, Strategic management, Due diligence Pages: 6 (1616 words) Published: March 23, 2013
PHASE 1 OF THE TURNAROUND : Building The Foundation
Jim Burton set about analyzing the business with an emphasis on quick wins that would contribute to developing the long-term “execution” foundation. * He was dealing with seasoned industry veterans, each with deaply held beliefs and paradigms about the business – how it had been and should be run. In an effort to build confidence and gain acceptance among his senior peers ( it had to be an incremental approach) * With encouragement and support of the owner, burton first formed an executive committee of nine, including the five business unit. The objective in forming executives committee was to begin decentralizing the decision making process away from the two owner. ( The owners not actively participate in committee sessions, but would instead attend summary reviews, at the conclusion of each meeting, to provide counsel and advice ) * He was to transform the company and build the sustainable growth platform the owner wanted Identifying and Understanding Value Creating Processes

Burton focused on its execution and on helping Norton Lilly’s executives understand the key processes that enabled good strategy execution and value creation. * Burton first launced process mapping in the linier group, which operated in eight different US offices * At the time, the liner division offered a fragmented mix of services across its eight location, with each location performing some activities more effectively than other location and all location failing to provide adequate service in some regard * By late 2007, mapping the key processes involved in delivering each type of service had helped management and employee understanding of processes led to improved process standardization, end administrative procedures that duplicated work, improved costumer satisfaction, and penalties * By the end of 2007, Burton had assigned responbility for achieving KPI goals to individual managers and supervisor overseeing specific value creating process within the liner division Implementing a Balanced Scorecard Performance Measurement System Accompanying the KPI’s rollout was a balanced scorecard, wich further focused managerial employees attention on the performace of value creating process. Metrics included in the balance scorecard system used at Norton Lilly included process KPI’s. costumer satisfaction and financial performance * In late 2007 Norton Lilly’s balance scorecard system was expanded to included a “ dashboard” of performance indicators that could provide overview of business unit level * The dashboard contained :

* Revenue compared to budget
* Expense groupings compared to budget
* Capital expenditures compared to budget
* Top 10 Costumer profitability
* By the end of 2007 Norton Lilly business unit leaders were holding monthlymeetings to review KPI status and propose corrective action to resolve differences between expectations and actual performance Resource Allocation Policies

Other foundation building actions undertaken in 2007 included in the initation of various policy changes. One such policy change involved the company’s capital outlay policy, which was the first new policy established by the executive committee. * The capital outlay policy came about after Burton discovered that the company had variously launched into a number of ventures without much success. * The policy called for a nine step due diligence process, that nine steps were as follows: 1. Description of the opportunity

2. Description of how the opportunity fit with Norton Lilly’s objectives 3. Assessment of the competitive threats
4. Assessment of the competitive landscape
5. How success whouldbe ensured
6. Proposed exit strategy
7. Business case
8. Financila pro forma
9. List of major assumtions and risk
* The capital outlay policy would ensure that decision to...
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