Tomo Drug Testing

Situation

Mickey Moore purchased the company in 2007 and immediately set to work growing the company footprint by expanding operations throughout the region. He copied the model that had made the Springfield office so successful and expanded to nine satellite offices throughout Missouri. Over the next few years, the company revenue continued growing as the company added new clients in the newly covered regions. However, the profitability of the company dropped significantly. Tomo Drug Testing was working harder for less money. Turnover was also a considerable challenge.

Solution

In 2011, Tomo Drug Testing engaged People Centric Consulting Group in a partnership to help develop a clear strategy. In the engagement, it became clear that the satellite offices were not as efficient as the home office in Springfield. ESS performs most of its testing in the field at the clients’ locations and has a limited amount of walk-in business, though the Springfield office draws significantly more walk-ins than the remote offices do.

Furthermore, they found it difficult to replace staff in remote offices because staff members were responsible for so many differing functions. By 2012, Tomo Drug Testing was looking at a new model for expanding its service. The company and People Centric realized that the company could provide service with an expanded footprint—without the need and excessive costs of maintaining so many physical locations. People Centric helped them reshape its business model from a remote office model to a centralized model, where the company’s personnel in Springfield would conduct all scheduling. This new model would allow them to efficiently, cost-effectively expand into new territories simply by hiring a local technician to perform on-site testing, which would be scheduled from the central office.

Implementation

The centralized model was huge paradigm shift for the entire ESS team. To date, the remote offices each had their own schedulers who knew the individual clients and the areas. There was a lot of concern about whether a central scheduler based in Springfield could provide the same level of customer service or whether they could schedule efficiently. When the change was first discussed, Mickey described the response as “resistance and delay” with a general “lack of understanding” of how the new model might work. His employees were concerned about “possibly letting down some clients.” There was also natural concern over potential layoffs as positions were consolidated. “We’ve always done it that way” was the most common feedback.

The leadership knew the importance of balancing buy-in from the team and overcoming resistance. Doing nothing was not really a viable option, and Mickey needed to communicate this reality to all staff members. The concept was fine-tuned by a cross-functional team of employees and managers. Mickey considered the disruption as necessary “time to develop a plan that most appropriately / honestly presented the changes, to minimize risk, and to avoid unnecessary repercussions.” As the plan was developed, those most intimately involved became less resistant and even started to build energy around the idea. The process of working out the details took about 3 or 4 months.

People Centric later asked Mickey about when he first started seeing people explore the change as a potential improvement. He replied that his people took the concept seriously because they were “following the objective opinion of external advisors” (People Centric). Employees also started buying in themselves when they saw the “buy-in of key leadership and management.” As the details were worked out, group buy-in also increased as many employees saw how the change would align with overall company goals. Despite growing buy-in throughout the process, some employees did not fully embrace the concept until long after it was implemented.

Once all the details were worked out, Mickey and his management team announced the change to the rest of the team. The result was the closing of three remote locations and a few layoffs, though Tomo Drug Testing was able to avoid the need for additional layoffs by earning the business of new clients. Management spent time with each of the affected parties to answer questions and help people understand the change. Mickey personally visited with the employees who were laid off and later described their response: “While it was painful and they were disappointed, they also understood.”

As the changes were executed, buy-in of even the most skeptical people continued to build. Many were afraid of losing clients due to the change, but that simply didn’t happen. People Centric helped Tomo Drug Testing implement a communication plan to let the clients know what was happening. This painless, low-cost plan to openly communicate with clients conveyed the respect and commitment ESS has for each client it serves; as a result, the company did not lose a single client to the change.

Naturally, the centralized scheduling model, which was planned out before making the change, involved details that later proved imperfect. This is to be expected, and with People Centric’s help, the company was prepared to fine-tune the model as needed. Therefore, after implementing the major initial changes, the team continued to meet and make corrections to the process. This also improved buy-in, as it showed management’s commitment to finding the best possible ways for the new model to work. Mickey knew that his people were truly committed to the changes “when staff owned the decision leading to suggestions on how their department could contribute to or handle the change.”

Result

In the first year under the new centralized scheduling model, Tomo Drug Testing’s profits dramatically improved due to the reduced costs (rent, utilities, staff) and improved efficiency gained by centralizing their core competencies. The firm now has a scalable model, which is easily replicable with the centralized support. Tomo Drug Testing continues to use the same team problem-solving approach as regional and national growth continues to challenge the status quo. The staff has grown in size significantly, and Mickey Moore reports that—having solved this challenging problem together—his team is stronger than ever.