By Paul F. Taccini
Hired by an equity backed Boston-based company, my first task was to integrate two disparate acquisitions into the corporate culture. Each company was to remain free standing. The first of these companies’s product line was to be used as an extension of the main product offering. It should have been a relatively easy task. In reality, it was not.
The acceptable level of product quality was very different in each organization. The acquiring company was recognized for its high quality in the market. It did everything it could to ensure that the product received by the consumer always worked as advertised. At the acquired company, the management team felt it was more important to ship an order to a retailer on time regardless of product quality. At times they knowingly shipped faulty product to a retailer.
- We started by developing an overview to the cost of poor quality.
- Among other issues, it detailed the difficulty in keeping and reselling accounts because the product was inferior.
- Next, we tracked the actual cost in dollar terms.
- This included the cost of extra sales calls, outbound and returned freight, handling the product multiple times, and the effort of attempting to get the manufacturer to replace the faulty product.
- To insure both groups were on the same page, we held a multi-day ‘Outward Bound’ type session in New Hampshire which allowed all the team members to openly discuss their perspectives on quality.
- While it didn’t immediately solve the quality issue, it allowed us to work it out over time, instilling the need for high quality and put in place the systems to insure product quality.
The entire process took over a year before the situation was considered to be fixed.