1. What impresses you about Norton Lilly International? What has accounted for Norton Lilly’s success over the past 150+ years? What aspects of Norton Lilly do you find unimpressive? Norton Lilly is a company that has showcased its ability to withstand the test of time. The company has steadily grow and expanded both nationally and internationally since getting their start in 1841. The company was able to shift with the tides when cargo containerization came into the fold in the 1970.
The ability to change, but doing so in a strategic manner, put them in good standing up until their point of being acquired in 2005.What I found unimpressive was Thurber and Rutherfords shallow focus on growing the company without having an effective strategy defined or executed upon to handle the growth. They acquired companies outside of the company’s core business, did not effectively handle their M&A responsibilities leading to a degradation in company culture, operational efficiency and profitability. For five years the company grew recklessly putting 150 years of business success at risk before reaching out for help.2.
What happened in 2006 to handicap the company? A series of acquisitions, joint ventures and international expansions increased revenues by $41 million. Unfortunately, acquisitions outside of the company’s core competencies, ineffective integration of acquired companies, poor operational performance resulting in a bottom line loss.3. What is Norton Lilly International strategy? Which generic competitive strategy most closely fits with the competitive approach that Norton Lilly is taking? Norton operated three business units; liner, ship services and overseas. Liner and ship services offered similar services such as fueling vessels, crew transport, medical services, restocking, handling cargo and tows.
The primary difference between the two was that the liner focused on cargo whereas ship services focused on the vessels. Overseas handled liner and ship services outside of the United States. I believe they used a focused strategy based on differentiation.4.
What policies, practices, support systems and management approaches underlie Norton Lilly International’s efforts to execute a turnaround strategy for the company? Has Norton Lilly International built an organization capable of good strategy execution? Focus on quick wins using an incremental approach to win over his team, formed an executive steering committee that included the five execs, the two owners and the chief administration officer to serve as the decision making body slowly moving the majority decision making way from the two owners.Introduction of process mapping to help the execs understand the key processes that were leveraged to deliver services, identify issues, create plans to resolve, close performance gaps, standardize processes, reduce duplication and improve service! I believe that the organization is well on their way. The approach leveraged a top down, eat your own dog food approach that then permeated through the ranks fostering buy in and support from the exec level down to the line level. The implementation of KPIs to track and measure performance and their respective results spoke to their ability to execute on strategy.5. How has Norton Lilly International’s use of the Balanced Scorecard and other performance measures aided the company’s efforts to implement a companywide performance management system? It allowed the company to define the process KPIs, customer satisfaction and financial performance goals that were essential to define, track and measure to determine if they were on track with their goals or if adjustments were required.
The creation of a dashboard allowed the organization to easily view how they were tracking on the operational and financial KPIs. As the turnaround progressed managers would meet on a monthly basis to review, discuss and create action plans when progress got off track. Resource allocation policies that required projects be assessed for financial value prior to committing resources.6.
What is your assessment of the internal leadership of Norton Lilly International? Does the company have the leadership in place to take the company to the next level of performance? My assessment of the leadership is that they did an excellent job at stabilizing the mess that owners got them into during the years of reckless growth strictly focused on top line growth. They were able to take a process improvement minded focus to identify key areas that needed improvement, determine how they would measure its current state, plot a course for the future state goals and track their progress.The proof is in the pudding and the management team was able to steadily improve its performance and in 2009 they had their most profitable year despite a general decline in the industry while being poised for an even better year in 2010. I don’t believe the company has the leadership that it needs to get them to the next level.
In order to truly get to the next level they will need to continue to foster their process efficiency culture while getting back to growing the top line. Process improvement gains will only get you so far…..the need to build and expand more than likely will require new leadership.
