It was 2018, and Randy De Guzman, the new Regional Sales Director of Control Techniques (CT), found himself with an exciting and terrifying target: to double sales in two years.
CT produced drives that controlled the speed and direction of motors, and had just been bought over by the Japanese firm, Nidec, which sought to become ‘the world’s number one for everything that spins and moves’. Unfortunately, CT had been suffering a negative 40% growth rate when De Guzman joined.
After visiting CT’s offices in South Asia, Southeast Asia (SEA), and Oceania, De Guzman realised that it would take too long to inculcate a customer-obsessed company culture given the firm’s bureaucratic and ‘cruising’ culture. So, he decided to start building the culture he envisioned—from scratch.
First, he laid off most of the salespeople across the various offices, who were resistant to change and were part of the "cruising culture" problem. To manage this smoothly, he did on-the-ground research, presented affected employees with a clear rationale and a reasonable severance offer. Next, he reorganised operations, hired people who embodied the new company culture, and stopped doing business with clients that he felt had been “bleeding the company dry”. His efforts paid off in three months when CT began seeing growth. Not only had De Guzman met his sales targets, but by 2024, CT had expanded geographically, and raised employee morale to an all-time high. That year, he was promoted to the position of Vice-President of CT’s South Asian and SEA, and Oceania offices.
This is a story about diagnosing cultural diagnosis, understanding its impact on performance, and developing strategies to lead effective change.
The Mindset for Embracing Change
Born in a small town in Northern Philippines, De Guzman was an electrical engineer by training, and began his career as a power plant designer at a South Korean power plant. He moved to French automation and energy management company Schneider Electric’s business development unit in France, where he experienced and learned how to survive the chaos unleashed by the collapse of Lehman Brothers in 2008. In 2013, he joined Singapore-based German start-up company Lenze, with the aim of growing the company’s business in SEA.
It was at Lenze that De Guzman learnt how challenging it was to wean the management off unproductive business partners, and how to manage low-performing staff who did not have a growth mindset. He eventually began hiring new staff while simultaneously commencing with layoffs. It was a humbling experience that exposed his knowledge gaps in finance, risk management and labour law, and spurred him to pursue an MBA.
When he joined CT in 2018 at the invitation of a former colleague who had become CT’s President, he thought it was quite a ‘dead’ company with ‘zero market share’. Established in the UK in 1972, CT had once been a leader in the production of automation drives, but has since been struggling to keep up with the competition. Apart from employees who were ‘cruising along’, De Guzman found that CT’s offices were stymied by bureaucracy, unequal rewards and a high attrition rate. More alarming was that most offices had exclusive distributor partnerships which were disadvantageous to CT. The distributor partners purchased parts from CT and resold them at a higher price, which ensured they earned a healthy profit margin.
Pushing a Hard Plan
De Guzman thought long and hard and realised that he had to go all in, or he would miss his targets and be fired. CT’s new owner, Nidec, had lofty ambitions in the high-potential markets of Asia and Africa. He visited CT’s headquarters in the UK and presented two plans. One offered a sales projection of US$17 million until 2022, with current staff, and had a chance of failing. The second plan was for the company to be number one in the region, with sales of US$50 million by 2024, surpassing the current US$11 million in sales. “I reminded them of Nidec’s vision, and how we currently had less than 1% of the market share. If this had to change, we had to revamp everything, which meant letting people go,” he recalled.
The upper management did not respond for two days. He sought out the opinion of the president of CT, who finally agreed to provide him with the financial resources and the backing for layoffs, hiring new staff, raising marketing budgets, and restructuring.
Trimming the Fat and Injecting New Blood
De Guzman estimated that the cost of the entire layoff exercise of the sales staff would amount to nearly US$500,000. Prior to the layoffs, he researched into the labour laws of the respective countries, and then gave the staff a clear rationale for the exercise at each office.
After the layoffs, he made the culture nimbler. Decisions had to be made within two to three hours, and then employees were expected to move on to the next issue. De Guzman limited team meetings to an hour, every Monday, compared to 10 hours over a week in previous years. He also hired young to middle-aged employees who were eager for growth and quick decision-makers.
De Guzman personally hired each salesperson, relying primarily on interviews that featured high-pressure situational questions. Many candidates buckled under the pressure and exited the interview. Those who had an answer—even a wrong one—were shortlisted.
De Guzman also decided to prune away pre-existing distributors, by raising the price of CT products by 10%. As he predicted, many of them eventually left.
When COVID-19 struck, he decided against salary cuts and instead gamified the sales process to encourage the switch from in-person sales calls to intense online outreach. Each employee was to make nearly 50 online sales calls a day and earn a total of 50 points per day. A text from the salesperson to a client earned the salesperson 0.1 point, a video call was worth 0.8 points, attending a webinar earned them 1.5 points, and so on. This was a tremendous success. However, when the lockdown was lifted, CT immediately switched back to in-person meetings while their competitors continued with only online meetings. This strategy contributed significantly to the company’s growth.
Powering Ahead
By improving his knowledge of finance and labour laws, having his ears close to the ground and thinking creatively, De Guzman engineered a massive culture shift at CT that sparked rapid growth. He demonstrated how cultural awareness and strategic leadership can instil agility and drive business growth.
This case study offers much insight into assessing and choosing appropriate change management strategies, which De Guzman used to propel the company to success.
The case study ‘Control Techniques: Change Management for Company Growth’ was written by Associate Professor Tan Hwee Hoon, Mahima Rao-Kachroo and Dr. Lim Wee-Kiat at the Singapore Management University. To read it in full, please visit the CMP website by clicking here.
