Starbank is a highly successful company. Started in1976 by Gordon and Kathleen Darbyshire, Starbank began as a supplier of furniture components to the caravan industry. It later expanded to service a growing number of industries who required a reliable and quality outsourcing service for the fabrication of high pressure laminates and wood based panel products. Starbank continued to grow organically with an average growth of 20% per annum nearly reaching a £10m turnover and 108 full time employees in 2008.
Phil Darbyshire, the son of the founders, joined the business after college in 1988 and in 2002 took sole control as Managing Director heading up the family firm that employs many close relatives. Starbank now operates from a 3-acre manufacturing base with over 70,000 square foot of production floor space and is one of the UK’s largest laminate panel manufacturers.
With this growth came the realisation that the company needed management and leadership structures in place as well as development programmes to underpin the organisation, providing firm foundations for future growth. As is often the case with SME firms, and especially family firms, people grow and develop with the business often starting in junior roles and rising to the top as the organisation grows.
Phil Darbyshire says, “Like me, our managers and directors had started with Starbank at much lower levels and because the company grew had taken on more senior roles. I recognised we needed to have skills other rather than what we were originally good at. We needed skills as managers and leaders.
“We’d worked previously with a couple of training firms but they didn’t get the company’s ethos or the way things were done. Festo, as an engineering company, understands the manufacturing business. Therefore they didn’t just tell us what skills we needed they showed us how to let go of the operational side, how to be better managers and leaders and how to put structures in place so we can continue to expand.”
Laying the foundations
Festo initially worked with Starbank on a Strategic Management Development Programme. One of the company’s external challenges is handling price pressures, particularly from overseas competitors. To shore up the business for the future the company repositioned itself in the market, focusing on its UK heritage, superior product and customer service summed up by the strapline ‘Growing by working together’.
This wasn’t just an external statement though. It had enormous potential to work internally as a way of demonstrating how working together, Starbank can deliver growth and prosperity for the future.
Understanding each other
This meant that everyone had to understand where the business was going and what their role was – aligning each individual to the goals and objectives of the business. Festo worked with Starbank to develop a Balance Scorecard, starting with the management team then rolling it out through the organisation. “We use it to help communicate. It’s a good way to pull everyone together and make sure we’re working towards consistent goals and objectives. We simply didn’t have this before. Now it’s clear to everyone the impact they have on achieving our aims and objectives.”
What do we really need to know about one another to work together? As a family firm you might think that Starbank knew a lot more about each other than most firms. Festo conducted DISC profiling of senior managers as an exercise in self-awareness, “I now understand myself much better,” comments Phil, “such as how I come across to people. I can also recognise other people’s personality traits and change how I respond and interact with them.”
The pressures of growth
With growth comes pressure. There are high expectations, both internally and externally, to continue to deliver high digit annual growth. For Starbank, expanding into different markets and growing the range of products meant the need for extra capability and capacity was continuous.
“We’d bolted on new buildings and new machinery and put them wherever we could,” says Phil. Once again, more space was urgently needed and Phil was about to sign on the dotted line committing to a new £250,000 machine and additional factory space.
Then the recession hit.
Phil continues, “As a business, all we’d done was focus on coping with growth and meeting customer demand. We hadn’t taken a step back and looked at things. If we made some changes here we realised we could handle all of this extra work without building that new extension, without buying that extra machine if we make things more efficient. Because we’re a family business we’ve had a lot of people with us a long time. Perhaps we didn’t get those new external ideas coming into the business that would have challenged how we were doing things.”
Phil turned to Festo. Drawing on their manufacturing background as well as training experience, Festo had first hand experience of lean manufacturing. They also had a tried and tested programme in place for organisations that needed to streamline their processes and production.
At the end of 2008 the recession had really started to bite and Starbank was looking at a substantially reduced order book. Rather than backing away and reducing spend as many other companies might have done, Phil took a different view. “I realised that we were going to go through a tough period. Perhaps this was the opportunity we needed to reorganise, when we weren’t at full capacity. To move a piece of equipment can take up to a month. Before the recession we couldn’t have afforded to take this time off production. I feel that we made best use of a reduced order book by using the time constructively to reorganise our facilities and place us in a better position going forward.”
During 2009 and 2010, Starbank put half the company through the training. This didn’t focus on just production either. It included people from every part of the organisation. The Lean Manufacturing training takes the form of a game. The participants are confronted with an initial situation involving customer production and other business requirements. The first round of the game reveals the deficiencies. Guided by the trainer, the players analyse the causes of delivery problems and low productivity, develop ideas for improvement and then implement these in the second round of the game. The results improve, but do not yet meet customer requirements. There is then a third round, sometimes a fourth.
This external injection of systems and processes produced some exceptional results. By focusing groups of 12 people from across the organisation including sales, accounting, stores and manufacturing – everyone could see how their role impacts on the business and how slight changes impact other departments. The game works on real life examples so there are definite outcomes at the end of the workshops.
For example, within Starbank there was a perception that product machining was seen as a bottleneck. In particular there was one high value machine that produced product in a very short period of time that was seen as the culprit. Yet on investigation it was found that the machine was only operating at half-capacity because there was no raw material available. The bottleneck was the transportation of raw material within the building, not at the machine.
Duncan Middleton, consultant at Festo who conducted the training commented, “The training gave a great opportunity to see Starbank in action. People are divided into smaller groups and work on live problems. It’s very competitive and can get quite heated. This is particularly stressful for managers. We really saw the management development and DISC profiling come into play. There was a much more conciliatory approach to discussing sensitive issues and people really pulled and worked together.”
And the result? “We used the training as a basis for reorganisation from start to finish of our production process. We continue to fine tune how we operate but it’s made a fundamental difference to our business,” says Phil.
Growing with customers
As well as the development and reorganisation internally, the mission statement is focused on changing relationships with customers in the market. Starbank operates in an increasingly price driven marketplace competing against multiple suppliers, sales channels and low cost imports. At the same time customers are seeking to drive down prices whilst demanding innovation and increased support in order to compete in the global market.
As a British manufacturer with a focus on quality, Starbank needed to move away from a price conversation with potential clients into building a trusting and long-term relationship. From handling initial enquiries on the phone through to a consultative sales force, Starbank is refocusing on how it engages and interacts with its customers to create a point of difference in the market. Currently, sales managers in the company are training with Festo’s ‘Oh Norman!’ consultative selling programme.
“This is the next thing we need to address,” says Phil. “It’s about the way we sell our product by being more consultative. This is about consistently improving our business by building better relationships and partnerships with our clients so we can grow together.”
Training through a recession
Starbank took a brave approach to the recession and saw it as an opportunity to put in place not just systems and procedures for the operational side of the business but also management and leadership development that would see them fit for the future.
And the return on investment? Well, in August 2010 the company matched its single highest turnover month. “We did this with approximately 25% less production staff and we didn’t have to invest in more space or machinery. This simply wouldn’t have been possible before,” says Phil. With these savings on infrastructure, profit has also shot up considerably leaving the company leaner and fitter.
When an organisation is undertaking such fundamental shifts and changes, it’s really important that any change builds on the good things in the business. The commitment to the company is phenomenally high within Starbank as is the knowledge, attitude and energy. There is a culture of pulling together to achieve things, whether this is meeting customer’s (sometimes unrealistic) deadlines or overcoming production difficulties.
Phil says, “We want to maintain all these good things while recognising that there’s always room for improvement. This might be personally – to better ourselves, learn and develop – or organisationally.”
The training has also equipped Starbank for the future. “We need to have these structures and professionalism in place. New people are coming into our organisation and we need to be able to communicate clearly the business objectives, understand how we interact and how to work with clients and customers in partnership.”
With the order book full again and untapped markets still to explore, the future for Starbank looks bright.