Polishing the Diamonds
Interview with Dominic Luzi, Interim Management COO/CIO
First things first: what’s it like to sleep on a Hästens bed? I tried one out at a store in Chicago — all natural materials, layers of horsehair and cotton — and it cost $65,000.
That’s only the high end model, there are less expensive ones. All of them are great quality and value.
But this is a perk, right, having Hästens as a client?
I was interim CIO of Hästens Sangar AB in Sweden. The first time I visited headquarters, I went back to my room after all the meetings. I was staying in a manor house, which had Hästens beds in all the rooms. I put my head down on the pillow, not intending to go to sleep, and the next thing I knew, it was morning, and I was lying in the same position as the night before.
Nice bed. So: 30 years’ IT experience. What are you best known for?
Results. Positive Results.
Can you elaborate on that?
My expertise is really change management. Take Hästens, a company where the information systems didn’t work, the operational systems were very poor and the financial systems were underperforming as well.
I am passionate about turning companies into something more, something beyond world class. I call it ‘polishing the diamond’—turning something that’s rough into a gem that’s sustainable for a long time.
What changes did you implement?
I rallied all the employees around a plan, did a company-wide training education piece, got them all working together, helped them select and implement a new software solution in eighteen weeks, changed the operations environment, and started to redesign the business to go into the future by reaching out to its client base.
And the results?
We reduced inventory by over 70 percent, reducing the number of warehouses from seven to one. We also reduced floor space used in production 43 percent by changing the way the product was being built. We created more consistent quality so that everyone got the same product.
Those are results.
Another example: I took a company that really had no idea of who the customer was, and helped them become much more cognizant and capable of dealing with their customers, so it could be more responsive and more reactive, and sell more products.
How did you get started in IT?
I started out as a computer operator working in a retail environment. Then I took a job as a director at a small company and from that point forward worked in consulting and eventually took over a consulting group that specialized in manufacturing and distribution. I eventually decided to go out on my own. I’ve worked with some companies in interim positions in order to get them online and get their skill sets up, and then I’ll pass them off.
Dominic Luzi has over 30 years experience in IT where he has held various positions focused on the delivery of solutions to support critical business processes. Seventeen years ago, Dominic started his own consulting business with the goal of having a positive, direct impact on client bottom line performance and focusing on transformational projects.
Why are you geared more towards interim management work?
I crave new challenges. I set companies up for continued success and then I leave the tools for others to utilize. I have an underlying thirst for new things.
So the type of interim management engagement is very important.
I do a lot of business transformation work, which is trying to take an existing business and turn it into one that is lean, flexible, and, above all, exceptionally profitable. This can mean taking a business that does exceptionally well and turning it into an even better performing asset, or taking a business that is performing poorly and turning it into a business that does much better than survive.
What skills do you need for this kind of work?
Vision and knowledge of best practices. And the ability to work well with teams—to organize teams and make them self-sufficient. I can roll off a project and know that the company can continue doing as well or better than when I left them.
What is the first thing you do when you step into a company as an interim manager?
I do an assessment to figure out what areas need improvement and how business is currently being done. I get the lay of the land. From that point forward I look at the departmental dependencies – what’s happening, what’s not happening, and what needs to change in order to make them a beyond-world-class business. I look for processes that are mismatched and run them against what are best practices for that kind of business and that kind of market.
What was the state of Control Instruments when you were brought in?
The company was a profitable business but had a lot of waste in terms of work-in-process and inventory. They had a nonfunctional IT system and lots of gaps in operations and planning.
How did you take the company to a 108 percent increase in earnings?
We used existing systems and changed some of the processes to get them functional. Next we educated everyone in the company and brought them all up to speed. We created a vision and a direction, got them aligned to that, then changed out IT systems, and implemented new processes. We basically redesigned the entire company in terms of the processes and realigned them for better planning capabilities. The 108 percent EBITDA gain occurred in the first year of my work. Earnings subsequently went up by 400 percent.
What was your top priority as interim manager?
Sales and operations planning. We had a discussion about prospective business, how we were going to handle it and what the production and operations planning needed to be in order to match the sales commitment.
You educated and trained every employee within the company starting with the management team and followed with four hours of training per employee per week. Why that approach?
My belief is that the management team doesn’t always know the details of what is going on in the business, but employees working on the floor or in different areas, pretty much always have the answers. While the employees know the details they do not always have the vision of how to put things together in ways that really make significant, positive change. We wanted to really get to the core of how to improve the business. This is usually done by getting the people who are in the business and know the business best involved. We needed to get their buy-in and obviously get them to succeed.
What were those results?
Inventory levels decreased by 66 percent from $1.5 million to $500,000 in the first year. EBITDA doubled. Work in process decreased by over 70 percent and delivery times were reduced from 12 weeks to two weeks.
Nice. How do you consistently produce these kind of results?
Creating a strong vision, knowing what best practices are, and getting the business aligned to best practice mode. I am passionate about turning companies into something more, something beyond world class. I call it “polishing the diamond”— turning something that’s rough into a gem that’s sustainable and profitable for a long time.
My belief is that the management team doesn’t always know the details of what is going on in the business, but employees working on the floor or in different areas, pretty much always have the answers.
What have you learned?
Most of the answers are already within the organization. You just need to be able to bring the staff together and get everybody understanding what’s going on and what needs to change — get them united with a single vision and direction.
How do you define success in interim management?
I let my customers define that for me. My version of success is when they’re making more money, when the business is running exquisitely well, and when it’s a lot more fun for everyone to go to work every day.