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Corus Distribution, Steeled for growth

Manufacturing in Action, Source : The Manufacturer
Zone : Leadership and strategy
Published : May 2008

A radical shift in approach to leadership strategy has led to an equally radical improvement in performance for Corus Distribution and Building Systems in the UK and Ireland. Jayne Flannery reports

The name of Corus is synonymous with the steel industry. Corus Distribution and Building Systems is recognised as having one of the largest networks of service centres in Europe and has the capability to meet the steel requirements of every sector of the industry, no matter how large, small or specialised.

Today, Corus Distribution and Building Systems finds itself in a robust state of financial good health. Over the last four years profitability has been increased by circa £5 million per annum. Moreover, the company can point to a steadily expanding market share and much improved margins. The management approach that facilitated these advances was formally recognised when a major accolade was received last year. Corus Distribution and Building Systems walked away as the clear winner of the Leadership and Strategy Award, won at The Manufacturer Live event of 2007.

It is a radical turnaround from the company that managing director, Theo Henrar, found himself responsible for at the start of February 2004. “This company was dramatically underperforming. We had simply not succeeded in leveraging the potential benefits of our size,” he explained. “Most importantly, the command and control culture that had become established meant that we were simply not getting the best out of our people. The ‘top down’ approach meant that there was a lack of communication and understanding between senior management and staff. It was obvious that a whole new direction was needed if we were to reverse the downward spiral that we were in.”

In 2003, Philippe Varin was chosen to join the company as CEO. His mission was simple. Varin was tasked with restoring the company to success. Alastair Aitken, who was the company’s financial controller at the time, is keen to acknowledge Varin’s contribution. “He implemented a highly effective process to ensure that the entire management team became focused on the key actions that were needed to improve our performance,” he said.

The programme that Varin developed identified four main themes which were brought together under a single banner entitled the Corus Way. “The four drivers were inspiring staff throughout the organisation to feel passionate about its success, selective growth in key market segments, improved productivity through the adoption of world class processes and extracting higher margins by adding value to customer relations.

From the outset it was recognised that success hinged on everyone within Corus, from the boardroom to the sales team and shopfloor, being actively engaged in the process of change,” given the freedom within their business units to build on good practice.

However, managers also had to learn to be accountable for their shortcomings as well as to celebrate and share their successes. “At the higher levels of the company, we were able to portray our vision of how we felt the company could be nurtured and developed, but what really mattered was how we cascaded that message throughout the organisation and engage 2,500 people across 40 sites.

Everybody had to be able to answer the question: What is the goal of this company and how do I contribute?” The initiative was led personally by Theo Henrar. Alastair Aitken believes that the campaign was set apart by the drive and enthusiasm he applied to realising his vision for the group. “Theo made it into a very personal mission. This human style was something different from the approach that we had experienced in the past and I believe it made the biggest single difference.”

His efforts have been rewarded by a rejuvenated workforce that demonstrates much improved levels of enthusiasm and understanding of what they are trying to achieve. “We have moved from being an organisation with very low levels of commitment and confidence to becoming one where everybody feels a responsibility for our success,” he said.

The tangible benefits of the sustained drive to engage the workforce are enormous. The company is restored to profitability and the declines in margin and market share have both been reversed. For example, support from the workforce has helped Corus to achieve a 30 per cent increase in production capacity at its key UK production site at Wednesfield in the west Midlands. This is one of the largest plants of its type in Europe.

Aitken, who has now succeeded Henrar to become the managing director of the Distribution and Building Systems division for the UK and Ireland, believes that the challenge now is to build on the solid foundations that have been laid over the past five years. “This company has been turned around and we can finally leverage the advantages that our size gives us,” he stated.

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