Algoma Steel

Organization's web page url
https://algoma.com/

Note: This information was produced using AI analysis of the video presentation transcript and has not yet been reviewed and approved by the client or the consultant.

The Issue:

  • Financial Distress: Two bankruptcies in a decade placed the company's very survival at risk.
  • Legacy Debt: Prior business decisions left the company with substantial debt even as it tried to revitalize operations.
  • Operational Inefficiencies: The high-tech Direct Strip Production Complex wasn't operating near its design capacity, undermining plans for greater efficiency.
  • Mismanagement: Previous strategies failed, suggesting problems with decision-making, execution, or unclear expectations and accountability.
  • Unmotivated Workforce: Concession agreements with the union had eroded management authority and may have fostered an employee mindset of entitlement rather than a drive for results.

The Intervention:

  • Stratified Structure Review: The article hints that an excess of management layers in manufacturing existed. RO emphasizes eliminating any levels exceeding the true complexity of the work being done.
  • CEO Role Reassessment: Turcotte restored the CEO position to stratum VI (level of complexity). This enabled appropriate, 12-15 year strategic thinking that was required.
  • Accountability Focus: Turcotte challenged a culture of inaction and entitlement. His messaging emphasizing 'earning your keep' reflects RO's insistence on clarity of roles and expectations.
  • Functional Realignment: Turcotte made internal structural changes in sales, production, and product development with the goal of improving overall processes and strategy. RO provides models for how functions should interact to ensure clear decision-making authority.
  • Performance Appraisal Focus: The new 'effectiveness appraisal' system strongly aligns with RO's dedication to regular feedback systems that define both the work to be done and how success will be measured.

Results:

  • Financial Turnaround: Algoma went from near collapse to being highly profitable with significantly reduced debt, improving stability and investor confidence.
  • Operational Improvement: Optimized production, process changes, and focus on product quality helped the company meet its market potential.
  • Culture Shift: The shift to 'keeping your word' and 'earning your keep' indicates greater accountability and likely more engaged employees.
  • Shareholder Value Delivery: This success translated into positive financial returns for those who had invested in the company.

Project Information:

Industrial sector Types of organization Governance RO Stratum of the organization Number of Employees Labour relations Region Country
Manufacturing
A fully integrated steel producer
Private
6
2800 Unionized
North America
Canada
Types of interventions Specific functions targeted if any Strata in which RO interventions were used Approximate Years of project interventions
CEO & general management, Human Resources, Operations or production
6, 5, 4, 3, 2, 1
10 years from

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Project principals

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Managing Partner in Brookfield's Private Equity Group
Brookfield Asset Management
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President and CEO
Kraines Consulting
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Vice President - Education and Training
The Levinson Institute

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