The Clowes Group

Addressing a Sales Constraint

The Clowes Group is a 200-year-old printing company in northeast England. From the start its owners were entrepreneurial and successful. In the 1800s the company was 600 employees strong, had international clients, and boasted that there wasn't a written language they couldn't produce. The company was the original printer of the entire Charles Dickens portfolio.

By the 1980s they had been acquired several times over. In the mid 1990s they suffered what current Chief Executive Alex Evans calls the "Big Crisis." Clowes was owned ("swallowed") by a company that had diverse ("unfocused") holdings. This parent company decided that the labor costs at Clowes were much too high. Morale took a nosedive as the printers' union saw this as a direct attack.

In 1993 and 1994 Clowes saw its net profit plummet. The company brought in Mr. Evans, then a consultant, as its managing director. The first obvious problem he saw was low morale. The next was very high inventory. He immediately made a plan to change the way things were being managed at Clowes. Within three months, the company was out of the red.

In 1996, Mr. Evans was named Chief Executive and decided the company would focus on addressing its constraints in production and strategy. Shortly there after he led a management buyout of Clowes.

In 1998, Mr. Evans read The Goal, and felt it made sense and reflected what he had been trying to accomplish. He and others from Clowes attended an AGI-sponsored TOC Symposium in London to learn more about dealing with the sales constraint that had presented itself.

They felt they had been dealing with their production problems, but now were not generating enough revenue. Their conversion of leads to sales was very low (almost one in fifteen). And they were experiencing idle time in the workforce and on their web printer - the printer they identified as their constraint and the printer which generated the most income.

This created an environment where the workforce blamed the sales people for the lack of work. The sale people were frustrated by this, as well as the pressure from what they perceived to be unrealistic targets. This left management frustrated that the company could not achieve the desired level of performance.

After meeting at the TOC Symposium, Mr. Evans brought in AGI's UK partner, Oded Cohen, to help address the sales constraint and construct the direction of the solution. They started by doing a standard TOC recommendation.

It was decided to get away from simple order taking and move to value selling - selling not just a printing service, but a solution to the customers' problems. This meant they had to develop a better understanding of their customers, which started with listening and developing their TOC analytical tools.

The process used
A combined group of the company's directors and sales team got together to work on this new direction. Mr. Cohen met with the sales force collectively and individually to achieve the buy-in necessary to move forward with the solution.

The sales people were then asked to give case studies of their current customer problems as well as the corresponding Clowes offering. A communication system was established so each sales person was able to see the UDEs of each client, the solutions used/proposed, and comments about how they were working.

This created an enthusiastic team environment - members of the sales force began working with each other, making suggestions on issues based on their own experience.

Results
Many of the problem accounts that Clowes had lost during this time period came back. Some even brought affiliate business as well.

The coveted web printers were fully booked three months in advance - during the quarter which historically had been the worst.

At the end of the first quarter of 1999, Clowes' revenue was 150% ahead of where they wanted it to be by the end of the second quarter.

Clowes is working to evolve its market offer into full project management - handling the details of the client's job from data collection and manipulation through to worldwide distribution.

These results were presented by Alex Evans, Chief Executive of The Clowes Group, and Oded Cohen, Partner, AGI, at the TOC Symposium in July 1999. The presentation is available on video (#JCI-9).