Profitability case studies

The Case Study Collection How nine companies turned their workforce into profit makers

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Contents 3 Nestlé

Thousands of CFOs’ in

Thousands of CFOs in one business: how Nestlé is expanding financial acumen across the globe

5 DLA Piper

How DLA Piper is turning legal s

How DLA Piper is turning legal eagles into profit experts

7 BorgWarner

How BorgWarner transformed

How BorgWarner transformed itself from debt bound to profit laden

9 Compass Group

From Foodies to

From Foodies to Financiers

11 Timken

How Timken employees s

How Timken employees learned to build their business around their customers

13 Diageo

Embedding Shareholder g

How ProfitAbility embedded Shareholder Value Creation into everyday decision-making

14 Molex

The components

Learning the essential components of financial success

16 Parcelforce

How managers are learning to be lean at

How managers learned to make processes lean at Parcelforce Worldwide

18 TNT

How a disjointed business

How a disjointed business developed a common way of making sound financial decisions

Nestlé Thousands of CFOs in one business: how Nestlé is expanding financial acumen across the globe ProfitAbility® has been working with Nestlé since 1999, joining the FMCG giant on its journey to expand business finance beyond the board room and into the mainstream of its management population. Not content to rely on strong specialist and centralised financial expertise, the FMCG giant wants all managers to speak the same language - one of sound financial acumen.

More than 1,000 Nestlé managers go through the programme each year.

Some years ago, concepts such as Shareholder Value and Economic Profit had become central to the then CFO’s pioneering strategy, but were not commonly understood by managers making important decisions every day. The real cost of doing business was not immediately apparent to everyone outside the leadership team. When Nestlé partnered with ProfitAbility, there were two key objectives: 1. Promote the use of a common financial language across the business, in all countries and at all levels, so that meaningful decisions can be made and acted upon with consistency.

2. Enable each employee to clearly understand how their decisions impact Shareholder Value and how each can contribute more value in the light of this understanding.

The ideal outcome was defined as a population of managers across the business that made decisions with a clear understanding of the financial impact, within the framework described by the CFO. From the outset it was clear that ProfitAbility’s business simulations were very much in tune with Nestlé’s approach. Together, Nestlé and ProfitAbility worked on customising an existing ProfitAbility simulation, to match the specific nuances of Nestlé’s activity within the food industry. The new programme was named ‘Value Creation’.

The customisation reflected the relationships between sales volume, price, cost of goods, brand support, research and the capital investment unique to Nestlé. Specific context was created by choosing three Nestlé product categories: coffee, chocolate and ice cream.

For the past twelve years, this customised simulation has been run in 3-day sessions across the Nestlé world.

‘Value Creation’ is popular in all continents, with particularly high uptake in Asia.

Project sponsor, Angus Freathy, says: “The value comes from the fact that the model is sufficiently realistic that we can draw valuable parallels with Nestlé ‘real life’ - without being so complex that participants need years of experience to understand it and appreciate its relevance.”

During the design and development, ProfitAbility trainers led several of the programmes, but Nestlé’s intention from the start was to develop its own team of expert facilitators, who bring intimate knowledge of the business to the simulation. ProfitAbility has accredited Nestlé’s own trainers to facilitate all simulations. The primary focus is to assure the quality of delivery and depth of organisational understanding.

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“In my opinion, there is no better training programme than ‘Value Creation’ in the Nestlé world - and I’m prepared to bet a cup of Nescafé, a giant scoop of Dreyer’s ice cream or a fourfinger KitKat that the participants share my view.”

Angus Freathy, Nestlé SVP, Corporate Training

enables managers to understand how to meet Nestlé’s strategic objectives and, in doing so, positively impact their own bonus.

Nigel Downing, Managing Director of ProfitAbility comments:

“

The quality and style of the programme is utterly consistent across the globe, which suits Nestlé’s desire for a common approach to financial management and decision making down to the ground.

”

Drawing direct comparisons with financial metrics is always difficult with such a large number of variables at work - but it would seem remiss not to mention that Nestlé’s share price has increased by some 50% in the seven years that ‘Value Creation’ has been running.

To Angus, the programme’s value is self evident: “Managers who participate in this programme have a much greater understanding of the financial levers available to them and of their inter-dependent effect.

Over the past twelve years, ProfitAbility has been commissioned to build, customise and deliver five further programmes for Nestlé. l Value

Creation one-day version

l The

Change Simulation (TCS) - Supply Change version l Strategy l The

in Action

Team Puzzle

l Questions

of Principle

The final word goes to Angus: “I never cease to be amazed that mature adults, astute business people, are so totally engaged by what superficially looks like a child’s game. The ‘fun’ element is also a critical element of the mixture.”

“

Nestlé people now speak the same language and use the same terminology, no matter where in the world they work.

”

For example when we talk about Economic Profit in a cross-discipline, cross-continent meeting, everyone who has experienced ‘Value Creation’ has the same, accurate understanding of what we mean.” ‘Value Creation’ also dovetails neatly with many other projects and initiatives across the business. For example, managers’ individual remuneration is influenced by company results, which in turn affect Shareholder Value. The programme

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DLA Piper How DLA Piper is turning legal eagles into profit experts It’s all very well standing up and giving a lecture about finance.

But with Legal ProfitAbility®, delegates can truly experience the highs and lows of the consequences of their financial decisions.

With a powerful vision to be a top five global, full service law firm, DLA Piper has a well deserved reputation for being progressive and astute. The firm’s well rounded service offering stretches across a number of core areas including Commercial, Litigation and Real Estate.

As part of this global vision, the firm is keen to ensure that people at all levels of the organisation understand the financial workings of a law firm. DLA Piper is an organisation which essentially has several hundred owners, all of whom have financial responsibility. So it makes good sense to instil sound financial acumen, in addition to expert knowledge of the law.

Amber Moore, Director of Learning and Development at DLA Piper, has pioneered this initiative, working with ProfitAbility Business Simulations to bring financial management for law firms to life for people in a variety of different roles across the firm.

Legal ProfitAbility®, the board-based simulation developed by ProfitAbility Business Simulations specifically for law firms, was chosen as one of the methods of developing this financial management expertise within DLA Piper.

Amber explains: “It’s all very well standing up and giving a lecture about finance. But with Legal ProfitAbility, delegates can truly experience the highs and lows of the consequences of their financial decisions.”

The programme comprises a one and a half day workshop where attendees from DLA Piper are divided into competing teams, each running their own law firm. Time is compressed so that numerous business cycles play out over the programme. After each business cycle, teams have the opportunity to revise their strategy and try a different approach. “At first, some lawyers are sceptical - we’re talking about very bright, highly qualified individuals who are essentially being asked to play a board game at work! But the competitive element soon takes over and teams generate increasingly sophisticated management techniques which deliver both profit and growth.”

“Many law firms face a similar challenge” explains Phil Walsh, Client Team Director at ProfitAbility. “The firm is a commercial business like any other, but focusing on cost and revenue can be seen as devaluing the professional client service they provide. It’s almost like ‘profit ‘ is a dirty word to lawyers.

Legal ProfitAbility® is designed to enable lawyers to clearly identify their personal role in the firm’s commercial success and to chase away any notion that conversations about money (both internally and externally) are uncomfortable.”

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“With Legal ProfitAbility, delegates can truly experience the highs and lows of the consequences of their financial decisions.”

Amber Moore, Director of Learning and Development, DLA Piper

Legal ProfitAbility is now being deployed across far more than just the partner base at DLA Piper. Its adaptability means that it can be used to give more junior lawyers a great perspective of the levers which impact profit in a law firm early in their career. Similarly, business professionals at DLA Piper are now combining their specialist professional knowledge with sound principles for running a law firm. Their ability to support the law firm effectively is increasing hand in hand.

Anecdotal evidence of improved financial decision making is strong, as is positive feedback from delegates themselves. But ProfitAbility and DLA Piper have a clear plan to measure the impact. Each participant is assisted to leave the programme with a financial action plan to report back on. An individual’s plan might include commitments such as “reduce Work In Progress by 10%”, “improve pricing by 5%”, “improve accuracy of time recording by 10%” or “decrease debtor days by 10 days” - the impact of which can be calculated financially.

successfully reduced his debtor days can share experiences with a lawyer who has successfully increased his fees.

By tracking the achievement of the commitments made in the action plans, plus measuring the influence of coaching/action learning in this process, the impact of DLA Piper’s commitment to expert financial management will be crystal clear.

So far, more than 1,200 partners, associates and business professionals at DLA Piper have experienced running a ‘mini law firm’ through Legal ProfitAbility. With more participants flowing through the learning process on an ongoing basis, DLA Piper looks set fulfil its Top 5 vision rather sooner than anticipated.

Coaching is available to support lawyers as they strive to achieve their action plan. The principle is to help lawyers overcome likely obstacles. This coaching will be offered on a facilitated group basis in the form of action learning. For example a lawyer who has

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BorgWarner How BorgWarner transformed itself from debt bound to profit laden with ProfitAbility “We wanted something that was visual and understandable, something that was proven, with no real element of chance.”

Skip Cline, BorgWarner, Automotive Group Controller

When BorgWarner staged a leveraged buyout in 1987, it assumed a hefty debt of $4.2 billion.

A public offering of company stock offered some relief, but the lingering debt hangover pushed business unit managers to focus on fiscal responsibility and good cash flow.“We surveyed employees to learn what they needed most, and they told us - overwhelmingly - that they wanted more financial expertise,” recalls Skip Cline, who, at the time, was the automotive group’s controller. (Today he’s the VP of acquisition coordination and special projects.) “We had to focus on cash flow, and we needed to train people.”

So BorgWarner engaged a consulting company to test the available educational tools.“We wanted something that was visual and understandable, something that was proven, with no real element of chance,” explains Skip, adding that the visiting trainer would naturally have to be a seasoned professional.

The search company returned with its best pick: Corporate ProfitAbility. Today, twelve years later, with more than 40 ProfitAbility programmes under its belt and in excess of 560 employees trained, BorgWarner is in an excellent position to offer a testimonial.

Nigel Downing, ProfitAbility Managing Director still attends the company’s training sessions, but he’s more of a coach than an instructor.

These days the controllers of the business units lead much of the training. In fact, they’re required to teach up to two programmes a year as part of their performance review and the company’s overall succession plan. Each year the controllers and members of the HR team will sit down and map out the training calendar for 2006. So far they’ve played Corporate ProfitAbility on three continents in four languages - English, German, Chinese, and Japanese. Skip figures the company spent about 15% of its annual training budget on ProfitAbility’s offerings and that his team has been “very pleased” with the return on investment. (The company’s stock price has quadrupled since they started playing.

Coincidence? Not likely.)

“We played Corporate ProfitAbility for about seven years before we BorgWarner-ised it,” notes Skip, explaining that the customised module teaches the company’s specific success drivers, notably economic value, which drives the bonus plan. Players learn the components of revenue and costs and what they can do to influence them. They see the difference between short-term spending and long-term investing and how to balance the two.

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“The simulations can get cut-throat, but people walk away with ideas they can readily take back to their jobs.”

Through years of playing the business simulation, BorgWarner has developed some best practices. The controllers discovered, for example, that they could easily run it at every organisational level, so long as players work in different units and have similar levels of financial knowledge. The cross-business approach gets different types of people mixing it up, revving up the play, says Skip.

At the end of sessions, the controller leads players through a few exercises - some suggested by the game’s designers, others completely home-grown. One called My Job encourages players to reflect on their game experience and brainstorm new ways they can influence economic value, the critical number.

Those scribblings ultimately become personal action plans.

Teams also pick the session’s winning company by investing play money in the one that created the most value in two days.“The teams have $100 to invest in one of the other companies.

They just can’t invest in their own,” explains Skip.“It’s interesting, they always seem to agree with our [the controllers’] assessment and pick the best, most valuable company we’d invest in. They’re obviously learning how to value a company as a whole, and that’s very encouraging.”

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Compass Group From foodies to financiers: how Compass enabled employees in more than 50 countries to speak the common language of value and “We had previously worked with ProfitAbility and based on our excellent experience we turned to them again to help us create a training programme that was completely new.”

Marc van Handenhove, International HR Director, Compass Group

Compass has been pioneering exceptional food for 25 years and now, with help from ProfitAbility, Compass people speak a new common language.

When new CEO Richard Cousins started at Compass Group in 2006, he inherited a fragmented portfolio of companies. His top priority was to create a more cohesive group between these disparate organisations.

Marc Van Handenhove, International HR Director at the Compass Group, explains, “We needed an international ‘Compass language’ to achieve our strategic aims. Teams were motivated, but needed one common platform from which to share.” To address this, the Leadership Group developed MAP (Management And Performance).

MAP is a framework to develop strategy that improves profitability and cash generation. Marc

comments, “People started to realize that MAP was incredibly powerful, and suddenly we saw a thirst to learn MAP terminology across the business.”

ProfitAbility Business Simulations had made an impact at Compass Group a year before, when they created an innovative Senior Management Development programme.

Compass Group was so impressed with the way this experiential learning programme delivered important messages about profit and cash that they decided to translate the MAP approach into Mapping for Value - a programme for senior leaders. Marc continues, “We had previously worked with ProfitAbility and based on our excellent experience we turned to them again to help us create a training programme that was completely new and very different to their usual approach.”

In a joint effort with Compass Group, ProfitAbility created Mapping for Value. This is a simulation based workshop, designed to inspire and drive new behaviour in three key areas: 1. Developing team financial understanding 2. Illustrating cause and effect within the business 3. Showing managers how they can drive profit and cash flow.

Brian Helweg-Larsen, Director of Innovation at ProfitAbility, explains, “For many people, profit is a very abstract concept. The moment they realise how the P&L fits into the MAP framework, they become more effective in delivering value.” Mapping for Value presents each team with the challenge to improve profit and cash flow. The model reacts just like Compass’s financial model, giving every delegate a crystal-clear view of the effect of their decisions.

Mapping for Value has been delivered to nearly 2,000 managers throughout the world and is part of Compass’s ongoing leadership development curriculum. Brian comments, “MAP gets everyone lined up behind the same financial goals and speaking the same language. It’s a great way to show managers

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“Demand for Mapping for Value has been greater than we ever imagined.

This is the best programme they have experienced.

Mapping for Value is to become our flagship in terms of business organisation.”

how they can drive for growth, cash, or profit as the needs of the business change.”

Determined to prove the success of MAP objectively, Compass Group measured the results of Mapping for Value in three different ways: 1. Pre- and post-programme tests illustrate a 36% increase in knowledge.

2. Post-course Participant Satisfaction sheets boast a 92% delegate satisfaction score.

3. Return On Investment - each delegate creates an Action Plan at the end of the programme which becomes part of the country strategy.

The success of Mapping for Value is rooted in the strong and collaborative relationship between ProfitAbility and Compass Group.

Brian comments, “This was very much a team effort. Some of the ways we created synergy were unique. Where Compass were using financial concepts such as ‘Drop-Through Profit’ we were able to create exercises which help managers learn the concept in minutes.

The result is a process which builds the business acumen of every participant in a way which is totally relevant to their day to day work.”

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Timken How Timken employees learned to build their business around their customers ProfitAbility provides... the backbone of the Timken Academy.

When the “big cheeses” in a huge manufacturing company like Timken get behind a major change initiative, you can be sure something very special is about to happen.

2. A need for plant managers all over the company to operate at higher levels of complexity than their ‘one job/one site’ experience permitted.

Recognising that Timken benefited from some of the best sales training in the world, the business’ leaders posed the question: “How much more success could we achieve with some of the best manufacturing training in the world?”

In 2002, the Timken Manufacturing Academy was launched with a vision to change the way manufacturing professionals think and behave.

With the help of ProfitAbility, the Timken Manufacturing Academy addressed these challenges head on by hand picking groups of high potential plant managers (or soonto-be plant managers) and putting them through their paces at a two-week Academy programme. Participants come from all over the world, creating a strong global alumni who can network and continue to discuss business issues after the event.

ProfitAbility provides both a board based manufacturing specific simulation as well as a role-play simulation as the backbone of the Timken Manufacturing Academy. The results have been extraordinary. As a world-leading provider of bearings, alloy steels and related products and services, Timken faces two key challenges: 1. A rapidly changing market place - expanding supply chains, dynamic competitive landscape and evolving customer needs

Dr. Kim Ridgway, one of the originators of the Academy, describes the objective as “giving prospective Timken leaders an opportunity to run a manufacturing plant - and the skills and mindset to make it succeed.

Among the mixture of development experiences the Academy participants are exposed to is The Change Simulation (TCS). This is a scenario-based simulation, designed and led

by ProfitAbility. It works on the premise that if Timken people understand how to build a customer focused business, they will give better service and bring home more profit.

One of the strengths of TCS is its parallels with real working life.

“

ProfitAbility understands our business very well, consistently making the connections between simulation and real life alongside the participants. And after returning home, each attendee has six months to create a PowerPoint presentation addressing, “What I Changed in My Plant” as a result of the academy. Dr. Kim Ridgway, Timken Academy.

”

Anecdotal evidence of the programme’s success abounds. In the early days it was difficult to persuade managers to release their high potentials for two weeks to attend - now the Academy is heavily oversubscribed. When Dr Ridgway wrote an article about the

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“They are behaving as they do in the work place - but the simulation enables them to see the behaviour, understand its impact and make the change.”

Academy for the Timken intranet, it achieved 3000 hits - the most an internal article had ever received. Managers of participants are very clear that the programme has huge benefit. They describe how their people return talking about issues and discussing strategies they have never mentioned before. Plant managers describe their delight at hearing “We shouldn’t do that because it won’t benefit the customer if we… / we’ll save more money if we… / our margin will increase if we…” All change indeed.

The delegates are divided into teams, each team inheriting a manufacturing organisation in disarray. The organisation’s purpose is to manufacture and sell greetings cards. The team’s purpose is to turn around the organisation so that it satisfies its customers’ needs and secures more and more orders at the right price.

The process involves a number of 20 minute ‘rounds’ where the team’s organisation must understand, collect and fulfil the customer’s greetings card requirements. They can change anything about their inherited company (people’s job roles, how orders are taken, prices etc) but have to get approval from their CEO (a ProfitAbility trainer) for financial commitments.

The customer buys just as he or she would in real life - according to whether the products are delivered on time, at the right price, with the correct specification and whether they were treated well as a customer.

Timken’s Academy participants regularly ask the ‘CEO’ for budget to make a change to their team’s organisation e.g. moving a manufacturing plant closer to the customer. More often than not, these changes are approved but not implemented. When challenged, the delegates reply that they are too busy making cards to implement the change - even though it will improve their ability to satisfy customer needs in future rounds.

Dr Fletcher says: “When we run TCS in Timken, we find this trend is much more apparent than when we run it in other programmes such as Ivy League MBA programmes. The reason is because Timken participants bring their business culture with them, making change more difficult. They are behaving as they do in the work place - but the simulation enables them to see the behaviour, understand its impact and make the change.”

ProfitAbility workshop leader, Dr John Fletcher, says “In the first 20 minute round, teams struggle to make the 11 cards required. During the second and third round, teams get their head around reducing the number of admin staff, coordinating sales and manufacturing and making sound logistical decisions. They start to produce 50, 60, 70 cards in the 20 minute rounds. By the time we get to the last round, some teams are selling and manufacturing 150 cards in three different varieties in 20 minutes! It’s quite remarkable.”

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Diageo Embedding Shareholder Value Creation into everyday decision-making ProfitAbility designed four different business simulations, one for each division, and which reflected Diageo’s overall business strategy.

Diageo, the premium drinks multinational, was formed in 1997 and now trades in over 180 markets around the world and is listed on both the London and New York Stock Exchanges.

The company was looking to embed the concepts of Economic Profit, Managing for Value, and Shareholder Value Creation into the daily language and decision making of managers throughout four very diverse divisions l Guinness l Pillsbury l Burger

King

l United

Distillers and Vintners.

ProfitAbility designed four different business simulations, one for each division, and which reflected Diageo’s overall business strategy.

Teams competed to increase market share, while maintaining prices, and managing costs and the balance sheet. Shareholder Value Creation was the ultimate measure of success.

“

The language of Value Creation became completely embedded in the company’s culture, and in the thinking of managers in every discipline.

”

Each group of participants reported back enthusiastically. Guinness liked the programme so much that the division continued the training out of its own budget, and ran courses for another 800 managers and staff. Diageo still runs the programme globally. Pillsbury also continued using the programme, and a modified version runs today within General Mills.

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Molex The components of financial success “The content of the programme is great - sound financial principles which are easy to absorb through the simulated business experience.”

Jeff Ott, Assistant Controller, Americas Region, Molex

When the late Frederick August Krehbiel developed an innovative plastic material called Molex in 1938, he probably didn’t imagine that his Illinois business named after its signature material would grow to become the second largest manufacturer of interconnection products in world by the 21st century.

Known throughout the world for its customer driven operations and committed R&D investment, Molex supplies the small but vital components which power the technology we use every day - from the mobile phone on our desk to the car in our driveway.

In line with Mr Krehbiel’s passion for excellence, Molex today provides its employees with world class training and development. This investment in its people is repaid through great product knowledge, new ideas, a strong sales organisation and excellence in people management and leadership.

However in 2005, Molex Americas Region Training and Development Manager, Joe Misurac, identified a need for strong financial and commercial training to complement the wealth of learning and development available. If employees from a range of functions become skilled in financial management, Joe reasoned, could this dramatically increase efficiency and release cost savings that could be passed on to customers and provide a stronger return on investment for shareholders?

“

Let’s face it, finance can be dull! But the way the Corporate ProfitAbility facilitators run the course, you don’t even realise you’re learning. And the competitive team element really stimulates the desire to try out new ideas and learn from the feedback.

Jennifer Smith, Manager, Corporate Training and Development, Molex

”

Joining forces with the Manager of Corporate Training and Development, Joe searched for a lively and interactive way to teach employees sound financial principles. The ProfitAbility simulation, Corporate ProfitAbility, was chosen as the strongest product on the market. Molex valued its simple but highly effective structure: a two day ‘game’ implemented at various Molex office locations where teams compete to run the most successful business. All materials, processes and structure are provided so that participants can start making decisions and seeing the impact on profitability throughout the two days.

The participants’ experience is extremely action-oriented and when a short introductory session covering the rules of the game is completed, teams are quickly making decisions and running their businesses with vigour.

“

I definitely enjoyed the Corporate ProfitAbility experience and relished the chance to run a business for two days!

Back at work, I now keep a notebook of the insight I gained from Corporate ProfitAbility. I use this to reflect on current business problems and keep the learning fresh in my mind. Anne Knurek, Demand Creation Analyst, Molex

”

Six teams (each running one business) complete a number of full sales and operational cycles based on the sales, purchases and commercial decisions of a typical year. Participants must decide how to price their products, how many contracts to compete for, what type of products and how many to manufacture, how to finance their investments and how to pay their suppliers.

By considering their options, choosing a course of action and witnessing the results almost immediately, the consequences of each team’s

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“I feel that the very positive feedback from the sales people, who are essentially giving up valuable selling and commissionearning time to attend, speaks volumes about the quality of Corporate ProfitAbility.”

Joe Misurac, Training & Development Manager, Molex America’s Division

choices play out very rapidly. This makes it easier to pinpoint ‘cause and effect’ and to try another tactic quickly.

“

Attending Corporate ProfitAbility enabled me to explore the full range of variables affecting profit, cash flow and shareholder value. It was great to experiment with different financial levers and see results quickly via the accelerated business cycle which my team worked through over the two days. Debbie Kiley, Group Product Marketing Manager, Molex

”

Initially, Molex and ProfitAbility ran a pilot to test out the simulation for fit and suitability.

A diverse group of people from different functions and levels of responsibility took part in the programme, using the Corporate ProfitAbility simulation.

Based on the success of this first pilot, more programmes were rolled out - this time a slightly ‘Molex-customised’ version of Corporate ProfitAbility. This customisation geared the simulation towards Molex’s specific business language and structure, making it even easier for participants to relate their experience on the programme back to their role within Molex.

As Corporate ProfitAbility has evolved and rolled out to more and more participants, the simulation has been customised further into “Molex ProfitAbility” and, in addition, Molex Financial Controllers now contribute their expertise to each programme. The input of Molex’s full time financial experts maximises the participants’ ability to apply what they are learning to the real, working business.

Though every iteration of Corporate ProfitAbility involves a diverse mix of participants, sales managers are always well represented among the participant groups due to the commitment of this area of the business to playing its part in improving efficiency and profitability.

The knowledge, understanding and practice gleaned during Corporate ProfitAbility now provides a strong foundation for postprogramme projects, where participants commit to a set of actions based on ideas from the programme. The Financial Controller from each programme champions and mentors the post-programme projects and uses their influence and knowledge to help bring about change. These post- programme projects have become tangible and realistic action plans, with a real chance of success.

“

I found Corporate ProfitAbility a real help in understanding how various functions view the business and how they perceive their influence on profit. The two days were relaxed and fun. An open dialogue throughout ensured that every participant contributed and derived the maximum benefit from the programme.Fred Bell, EMS Vice President, Global Sales & Marketing Division, Molex

”

Joe Misurac comments: “If only half of the actions spawned by Corporate ProfitAbility so far are successfully implemented then it will have paid for itself several times over.”

We think Frederick August Krehbiel himself would have approved.

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Parcelforce How managers learned to make processes lean at Parcelforce Worldwide Parcelforce Worldwide chose to use Corporate ProfitAbility because of its high degree of interactivity.

Over the last two years, Parcelforce has undergone change at pace few organisations would relish. A complete review of the business has led to a new streamlined operation with half the number of depots and a shift in strategic focus away from standard parcels, towards the express market.

The new, lean business model requires managers across the business to be empowered and accountable for their area of responsibility.

Previously, revenue had fallen under the remit of sales and costs under the umbrella of operations. But a redefined structure now ensures that general managers hold the key to both revenue and costs. Jane Smith, People & Organisational Development Manager at Parcelforce Worldwide, explains:

“

We wanted managers to have the power to influence both revenue and cost. Now, managers have a Profit & Loss account at depot level and all the information and levers to make sound financial decisions are available to them.

”

However, making such a fundamental change to the way financial decisions are made means that more people in Parcelforce Worldwide need a solid financial grounding so that the action they take is astute. In some cases this meant filling in skills gaps where managers had not been exposed to this level of empowerment before. Smith considered a range of options to plug this skills gap, including an off the shelf ‘Finance for Non-Financial Managers’ course.

Rejecting this route, Parcelforce Worldwide chose to use Corporate ProfitAbility because of its high degree of interactivity.

“

“Parcelforce Worldwide people don’t sit at a desk all day, so it would make no sense to ask them to learn a new skill in a desk based or traditional classroom environment.” Jane Smith, People & Organisational Development Manager

”

Corporate ProfitAbility was reworked specifically for the Parcelforce Worldwide business model.

During the two day programme, each participant learns and practices eight key concepts of sound financial management from break-even analysis to shareholder value creation. The practical elements include running the full financial year over the two days so that delegates can experiment and view the impact within the programme itself.

Delegates also get the chance to meet with senior members of the finance community who attend every simulation.

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“I never used to be able to contribute at the financial part of daily review, but now I know what all the numbers mean I can offer ideas and suggestions about how to reach our targets.”

Parcelforce course delegate

Jane adds: “Delegates really value the opportunity to ask these senior finance people the difficult questions they have been facing all day! And it’s a valuable networking opportunity for both parties.”

Parcelforce Worldwide has now completed its roll out to managers. Far from the ‘dry training course’ which many expect when faced with the prospect of financial management training, delegates are very enthusiastic about their experience of Parcelforce ProfitAbility. The financial language and principles learnt are now carried forward to the daily and weekly depot reviews taking place across the business.

Parcelforce Worldwide’s Balanced Scorecard now has legs and an army of people who have real influence over its parameters. success of the programme:

The next steps in Jane’s mind are twofold.

Once the existing programme is completed, provision will need to be made for new managers (both new to the company and new to managing).

The logical progression is to create a way of conveying the concepts of financial acumen to those on the front line of delivery so that people in this population also pulls the profit levers available to them.

1. Delegates create a personal action plan as part of the simulation. These are followed up at regular intervals with line managers to check on progress and identify obstacles or further development needed.

2. Depot performance is expected to rise once the managers attend Parcelforce ProfitAbility.

Already, managers are linking what they’ve learned with the decisions they are required to make.

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TNT How a disjointed business developed a common way of making sound financial decisions ProfitAbility was chosen to provide boardbased simulation training to help managers grasp these important concepts in a fun and action-based workshop.

TNT, together with parent company TPG, has long been associated with innovation in logistics and delivery. Among other creations, the business was the first of its kind to launch guaranteed nationwide same day delivery - both for businesses and consumers. So it should come as no surprise that when it comes to teaching its people to make sound financial decisions, TNT chose an innovative, simulation-based approach.

At the annual company conference, TNT Logistics, TNT Express and the Dutch Post Office (all part of parent company, TPG) sought to sing from the same hymn sheet on the issue of financial management of the business.

Nearly 300 of the top managers from the three businesses met together. The conference theme was ‘Managing for Value’. ProfitAbility was chosen to provide board-based simulation training to help managers grasp these important concepts in a fun and action-based workshop.

Because each part of TPG operates in a different marketplace, ProfitAbility created three different financial management simulations: delivery, logistics and post office.

But the underlying message remained the same: 1. Your role is to create value for shareholders 2. Here’s how this is done 3. Here’s how we measure whether or not value has been created

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As a business operating with tight margins in an extremely congested market, TNT reaped the rewards of sound financial decision making throughout their business.

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The conference training proved so successful that many parts of the business rolled out in depth simulation programmes to their key managers in house.

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How can ProfitAbility Business Simulations help you?

For more than 25 years, ProfitAbility has designed and delivered experiential learning solutions for the world’s leading corporations and leading academic institutions including: Nestlé, Volkswagen, Jaguar, Diageo, T-mobile, Siemens, Roche, Pfizer, Novartis, Borg Warner, Marks & Spence, Prudential, Standard Chartered Bank, Royal Mail, TNT, Harvard Business School, Stanford Business School and London Business School...

ProfitAbility creates unique training solutions which add value and deliver business results. Using board-based and scenario-based simulations, our passion is creating “Light bulb moments” and through this, learning that really sticks. By taking employees and managers away from their desks, and allowing them to experiment with a simplified model of their business, learnings which might take years on the job are made in a matter of days.

As you have learned from this case study collection, ProfitAbility offers a range of solutions for your business: from induction programmes, to short simulations to enliven conferences, to components of your leadership curriculum.

ProfitAbility provides more than 100 challenge and industry specific solutions including: l Business/

Financial Acumen

l Strategy l Results-based

Leadership l Working Capital Management l Change Management l LEAN Principles l Customer Orientation l Segmentation l Industry-specific solutions l Bespoke

Programmes.

Ask us today how we can help you.

Call us on: +44 (0) 1491 821900 or email info@profitability.com

ProfitAbility® Business Simulations is a UK- and USA-based company, which operates worldwide. We are a global leader in custom designed, experiential learning. Our solid record of improving organisations’ profitability goes back to the late 1980s.

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