Presented By :

Jawaria yousaf ( MMS193047)

 Hiram Phillips,CFO and chief administrative officer of
Rainbarrel products.

Moments later, he was down the stairs, whistling

cheerfully and heading toward the cofeemaker .He was
in particularly good mood .
 Situation Before Hiram

Ten years of continuous growth due to

good economic conditions.
Company was “Fat and Happy”
Then came the economic slump and
Rainbarrel could not cope with it.
The sudden slowdown in consumer spending,
after a decade-long boom, had taken the
whole industry by surprise.
They were slow to react due to their indiscipline and
lax attitude.
 situation before Hiram

Keith Randall, CEO of Rainbarrel, was

known for being an inspiring leader
who focused on innovation.
They operated according to one
simple rule: if its good idea, we say
yes to it. If its bad idea, we say no .
 Hiram‟s Vision

 Focus on cost reduction via “Lean and Mean”.

He reduced labor cost by forced layoffs -
10% reduction in all units.
It was an impressive achievement : a
reduction in labor costs.
Lower costs as a result of higher
productivity.
CONT….

Improved call center metrics.

A year earlier they were spending up to six
minutes per call whereas now the average
was less then four minutes.
Frank asked “I guess you decided to go for
that new automated switching system?
Hiram answered: we got that improvement
without any capital investment.
He brought in “Wall Of Shame”.
New metric of measuring customer service
was brought in.
 The ugly truth .
Standardized the meaning of the term „shipping‟
Consideration of selling price as a measure of
commission to sales people.
Removed the confusion in the minds of the sales
personnel.
Bottomline - Keep things simple.
 Unexpected Backlash
Employee developed tendencies to find loopholes.
Employees started filing patents which were
commercially non-viable.
The current and retired employees were cold
shouldered by the sales people.
Layoffs were reducing happiness.
 Unexpected Backlash Contd..

The headcount reduction was the target and not the

cost.
Firing of low performing employees was crippling
the company.
Even high performing department had to lay of high
performing individuals.
Long term customers were getting disgruntled.
 Contd..

Stocks were not getting replenished.

Stuff was lying on the railroad siding outside the
warehouse.
Customer service personnel were in hurry to hang up
the phone calls from customers.
Hence multiple calls were required to resolve a single
issue.
In short, Hiram had lot of thinking to do.
 Experts‟ take on this case

• Make shipping efficient rather than

faster.
• Layoff increases costs of hiring too.
• It is very difficult to define a right
metric.
• Compromising long term businesses
for short term operating gains.
• PMS should be launched as a pilot .
 Contd..

• The employees were humiliated due to

Wall Of Shame
• Introduction of intangible reward
system.
• Top performer need to be nurtured as they
are 50% more productive than other.
• The pay for performance was illogical
game.
THANK YOU!!!!