How would you describe his leadership style

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Case 9. Noise Solutions Inc.: Adjusting for Aggressive Growth

As companies grow, especially at a rapid rate, entrepreneurs often struggle to keep up with that growth and the organizational expansion that comes with it. Delegating tasks, hiring the right people, and managing the cash requirements of rapid growth are only some of the challenges faced by entrepreneurs, like that of Rod and Scott MacDonald.

Recognizing an unmet market need, this father and son team created Noise Solutions Inc. in 1997. The company's mission was to analyze. engineer, and manufacture custom solutions to deal with noise pollution in a variety of industries, with a focus on the Canadian energy and manufacturing sectors. The Calgary, Alberta-based company quickly became the North American industry leader in turnkey noise analysis and noise suppression solutions for pipeline compressor stations, manufacturing plants and even the NASA crawler that took the Space Shuttle from the assembly building to the launch pad.

Success came early in finding the first "reference" company, mid-sized Stellarton Energy. With this credibility sales began to build to over $1 million by the second year of operation. Manufacturing was originally contracted out but it soon became apparent that the company needed to control the quality and on-time delivery its customers demanded. In 2003. Noise Solutions bought out its manufacturing partner. Scott took over management of the plant in Delburne, Alberta, and says the very first thing I did was hire people to come in and clean up the place. It was a mess." He then consolidated administration and accounting with the Noise Solutions head office and upgraded the information and communication technologies so the manufacturing could be better controlled.

Scott says, in 2003 the management style of the company was very much "command and control-dictatorial" but as the company grew there was a need to build out the team. Originally using Rod's network, people were hired for various positions. There was a need to replace Scott in the manufacturing operation to facilitate the leadership transition of the business from Rod to Scott, so an operations person was hired there. A Controller was hired to oversee the accounting and not too long after a Chief Financial Officer and an interim CEO were hired to work with the MacDonalds to make sure the succession from Rod to Scott was as seamless as possible.

Unfortunately, things did not all go as planned and the CEO and CFO resigned in 2007 over some suspicion of financial irregularities. "Hiring friends and family is a bad idea," says Scott. "We had to regain control and when the economy turned down in 2008 we replaced pretty much the entire accounting and management team. Peoples' skill sets will cap when you grow from $1 million up to $3 or $4 million. We were simply not set up for the kind of growth we wanted. That's when we made the change from hiring people we knew, to looking for the best person we could find-the best qualified people. My role completely changed from the 'command and control' model to a more collaborative approach. building out the management team. Now I can go away for two weeks and not worry. If you give your managers autonomy without clear direction and vision you will get in trouble. We don't have that problem today."

In 2008 Rod opened the company's U.S. operations in Denver, which quickly became nearly half the revenues of the company. As with many business decisions, luck plays a factor and the late-2008 downturn in the economy quickly saw much of that revenue disappear. The company persevered in the U.S and quickly realized it needed to up its presence there in order to properly serve its customers. Noise Solutions opened a sales office in Pittsburgh in 2012 and a new full-service 55,000 square-foot manufacturing facility in Sharon, Pennsylvania in 2013, to supplement the 25,000 square-foot Canadian operation. Canadian sales have stayed strong and the company continued to grow, achieving sales of $25 million by 2013.

Scott became the president of Noise Solutions in 2009 and he embarked on a mission of personal development that included an Executive MBA from Queen's University in Kingston, Ontario, and preparing the company to achieve aggressive growth. This included upgrading technology infrastructure and systems, but more importantly, upgrading the people side of the business. He brought in consultants to assist with an eight-year plan to professionalize the leadership and management of the company, created the "Senior Leadership Team," and in 2014, he created the "Future Leaders Team" of employees identified as having potential to develop into the next generation of senior leaders.
Having already achieved several awards for innovation and growth and being identified as one of Canada's fastest-growing companies in 2013 by PROFIT magazine, Scott is not prepared to have the company rest on its past success. One of his favourite quotes is from Albert Einstein: "A ship is always safe at the shore-but that is not what it is built for." To that point he has positioned the company for an aggressive target-to grow the company from $25 million in revenue today to "the goal of 100/20/18-revenues of $100 million with 20 percent EBITDA (Earnings Before Taxes, Interest, Depreciation and Amortization) by 2018."

The Noise Solutions' ship has clearly left shore and is ship-shape to reach its destination safely.

Question 1. Based on what you've just read, how would you rate the leadership skills of Scott MacDonald? In what ways does he fit the profile of the typical business founder? In what ways is he different? How would you describe his leadership style?

Question 2. Do you think Scott has the leadership skills to ensure Noise Solutions achieves the 100/20/18 goal?

Question 3. Do you think the company is large enough to have expanded to the U.S. or should it have stayed focused in Canada?

Reference no: EM133553645

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