The Challenge
A large industrial conglomerate operated businesses across paper, textiles, chemicals, and energy. When financial reporting was restructured to evaluate each division independently, a critical problem surfaced: the chemical business had been masking its underperformance behind the profitability of the paper unit. Evaluated on its own, 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 closure, which accelerated the very problem it was trying to solve. Employee engagement fell further, morale collapsed, and the organization entered a cycle where poor performance and disengagement fed each other with no obvious way out.
The Approach
A comprehensive assessment examined customers, employees, and internal processes. The turnaround strategy focused on people and process rather than cost-cutting, recognizing that sustainable financial recovery required engaged employees and reliable operations. Using a 22-step approach rooted in Self-Directed Teams:
- The business shifted from a functional structure to a process-based model built around the value chain
- Cross-functional teams were created along the value chain with team leaders elected by peers
- Employees were trained across multiple skills to build workforce flexibility and resilience
- Most operational and quality decisions were made directly within each team
- Transparency, shared decision-making, and genuine investment in capability rebuilding helped restore trust over time
The Outcome
Early results were uneven as teams adjusted to a fundamentally different way of working. By month nine, the trajectory had changed decisively. People scores rose from 51 percent to 67 percent, customer scores increased to 78 percent, and process performance swung from negative 13 percent to positive 65 percent.
The business achieved an 8 percent net margin, grew revenue by more than 70 percent, and delivered $3.4 million in savings. The closure risk was reversed, and the chemical unit secured its future.