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Imperial Manufacturing Group’s Normand Caissie (Nauman Farooqi/Hemmings House Pictures)
Imperial Manufacturing Group’s Normand Caissie (Nauman Farooqi/Hemmings House Pictures)

CASE STUDY

New management structure pays off for Atlantic Canada manufacturer Add to ...

THE CHALLENGE

Back in 1999, Normand Caissie reflected on the two decades since he had founded Imperial Manufacturing Group. As the sole owner and manager of the Richibucto, N.B.-based company, he felt he was pushing himself to the limit and potentially missing out on opportunities.

Although he had taken the company to a 300-employee operation with a North American footprint by the late 1980s, he realized that, to ensure its long-term viability, he would have to introduce a corporate management structure.

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This meant finding the right professional managers and, more importantly, and possibly a bigger challenge, considering relinquishing control of his company.

He knew that he needed to find smart professionals who had both an entrepreneurial bent and a “can do” attitude. His challenge was to accomplish this transformation while maintaining the competitive advantage and growth of the company.

THE BACKGROUND

Mr. Caissie belongs to a family of entrepreneurs; both his father and grandfather established and led successful businesses in the Richibucto area of New Brunswick.

After graduating with a business degree from the Université de Moncton in 1975 and working briefly for both the Bank of Montreal and Seagram Distilleries, Mr. Caissie turned to his entrepreneurial roots.

At that time, demand for the sheet metal duct, pipe and fittings business in Atlantic Canada was being met by central Canadian manufacturers. Seeing an opportunity to introduce a local producer, Mr. Caissie set up Imperial Sheet Metal Ltd. in Richibucto to manufacture these products with a skeleton crew of just four employees. By 1982, the operation had grown to 40 employees working three shifts to maximize the use of limited equipment.

Over the years, the product offering was diversified through the acquisition and absorption of 17 companies. The diversified group began to market itself as Imperial Manufacturing Group.

As his business grew, Mr. Caissie realized that he was in a commodity business that competed on price and was highly dependent on the seasonal nature of the residential construction business. To address these issues, he introduced value-added items to his product line which provided higher margins and also addressed the seasonal nature of the original product line.

Understanding the limited scale of the Atlantic Canadian market, he knew the only way to grow was to expand his business beyond Atlantic Canada. Initially he set up operations in Quebec, followed by Ontario, and soon expanded into the United States. Being a strong believer in delivering a superior product at a competitive price, he invested heavily in R&D.

THE SOLUTION

Mr. Caissie recognized that the most important step in the transformation process was to recruit highly talented individuals and give them the accountability and authority to do their jobs. Once he had come to terms with the notion of giving up control of some aspects of his business, he initiated a two-step process to move to a professional management setup.

In the first phase that spanned five years, he focused on hiring the best people for the job and placing them in the right roles within the company. During this phase, he continued to make both strategic and most day-to-day decisions, and depended on the professional managers to execute based on his decisions.

The second step that occurred over the next eight years saw him gradually relinquish the day-to-day decision-making to his management team. During this phase, Mr. Caissie also relied on his management team to provide advice and expertise to assist him in setting the company’s strategic direction. As he continued to pursue opportunities to build the company, he relied on his team to lead the implementation of the strategic direction. He also instituted an advisory board.

Mr. Caissie believes that setting up an advisory board was key to the management transformation from an owner/manager to a professional management structure. His advice for choosing board members is to seek out the best people, approach individuals who are most difficult to get, have all functional areas of the business represented and have geographic coverage of all key locations where the company has active business.

THE RESULT

The fact that the company was recently recognized as one of Canada’s 50 best managed companies for the second year in a row is strong evidence of the success of the management transformation.

Being a private company, Mr. Caissie did not disclose any figures but, as measured by the stringent requirements of the 50 best managed companies by program sponsors Deloitte, CIBC, the National Post and the Queen’s School of Business, the company has performed well across various matrices, such as profitability, productivity, employee morale, customer service and satisfaction while benchmarking against market leaders.

The company has seen tremendous growth since the change was initiated. This growth is reflected in areas such as product lines (more than 7,000 heating, air conditioning, ventilation and building products for resident and light commercial applications), managed employee growth (currently numbering more than 550) and geographic growth (five facilities in Canada and three in the United States).

As for the future, while Mr. Caissie remains chief executive officer, he looks to the next generation of his family to lead the company. Both his son and daughter hold senior positions: daughter Andree is manager of global customer service and pursuing her EMBA and son Mario was recently appointed president.

Special to The Globe and Mail

Nauman Farooqi is a professor and head of the department of commerce in the Ron Joyce Centre for Business Studiesof Mount Allison University.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

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