Case Detail

Case Summary

Leading Corporate Renewal: Selim Bassoul at Middleby Corporation

Case Number: 5-209-253, Year Published: 2009

HBS Number: KEL422

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Authors: James B. Shein; Evan Meagher

Key Concepts

Turnaround, Food Processing Equipment, Food Service Equipment, Guarantees, Customer Profitability Analysis, Diversification, Acquisitions, Covenant Violation, Foreign Currency Fluctuations, Innovation, Morale, Divestitures, Global Branding, International, Motivational Techniques, Customer Focus, Corporate Entrepreneurship, Entrepreneurial Traits

Abstract

Middleby Corporation was a designer and manufacturer of commercial food processing and food service equipment for fast food as well as high-end restaurants. During the latter half of the 1990s, Middleby became increasingly unfocused as its number of product lines increased dramatically. Margins and sales slipped. At the same time, some of the company’s high-profile product development initiatives ended in failure.

Although Middleby’s top management recognized some of these apparent warning signs, rather than take action, they seemed eager to blame the disappointing results solely on the company’s overseas operations. This inaction caused Middleby’s financial performance to deteriorate further, resulting in violations of its loan covenants.

To finally correct the situation, Selim Bassoul was moved from his role as general manager of Middleby’s Southbend plant up to chief operating officer for the entire corporation. Bassoul had taken the underperforming Southbend plant and turned it into a star performer, correcting and improving customer service, operations, and finances and establishing a clear strategic direction.

Bassoul had to craft a turnaround plan for the entire company in the areas of strategy, operations, and finance. He cut the number of products substantially, fired some key customers after a customer profitability analysis, and focused product development on innovative products that saved Middleby’s customers time and money. Following these changes and others, the company returned to profitability and Bassoul was named CEO. Bassoul then decided to present a major acquisition opportunity to the board of directors.

Learning Objectives

  • Successful turnarounds require three essential elements to be addressed: strategy, finance, and operations, all under the CEO’s leadership. Students will learn how each element alone and in combination work to make a successful turnaround.
  • Students will learn turnaround leadership skills and see their parallel as entrepreneurial leadership skills.
  • Students will learn that decisions on products, customers, and employee motivation all affect a turnaround strategy.
  • Number of Pages: 15

    Extended Case Information

    Teaching Areas: Entrepreneurship, Finance, Management, Manufacturing, Operations, Strategy

    Teaching Note Available: Yes

    Geographic: Global

    Industry: Commercial Food Service and Processing Equipment

    Organization Name: Middleby Corporation

    Organization Department: Corporate

    Organization Size: Large

    Decision Maker Position: CEO

    Decision Maker Gender: Male

    Year of Case: 2001