The site I took over in my early 30s had a binder for everything. Procedures, escalation paths, a scorecard that changed shape every quarter, all of it written by people who would never stand on that floor at 3am to see whether any of it worked. Anyone who has read The Goal knows the kind of plant I mean. The recession was in full swing, the asset sat a long way from the top of its network, and it was the first time anyone had handed me the keys to a building.

I came in with operating time in distribution, refining, and chemicals behind me, and a few years in the navy before that. I knew what a plant feels like when it is under control. This one felt like a place where everyone was waiting for permission from someone who was not in the room.

I did not call an all-hands meeting. I did not announce a program or hang a new set of values in the break room. On the first day I made a decision that I have repeated at the start of every operating engagement since: for the first week, I would fix nothing.

The Second Org Chart

I showed up for every shift, including the ones a GM is not expected to attend. I stood where the work happened and watched for one thing, which was where people walked when something went wrong.

When a line stopped, operators did not reach for the escalation matrix. They did not call the number on the laminated sheet by the door. They walked, sometimes the length of the building, to find Johnny, the first shift supervisor. He would look at the problem, say a few words, and the line would be running again. Nobody had told them to go to him. Nobody had to.

By Wednesday I could have drawn the real organization chart of that plant, and it looked nothing like the one hanging outside my office. Johnny sat at the center of it. The formal chart described who had the title. The other one described who had the trust, and a plant runs on the second one whether or not anyone admits it.

The pattern held on the other shifts, with different names. Second shift had its own version of Johnny and third shift had another, and none of them ranked where their influence would have put them on the wall chart. I kept a notebook that week with 2 columns, one for the title and one for the trust, and by Friday the columns barely overlapped.

What I Asked Him

Most new plant managers walk in with an answer. I walked in with a question, and I asked it of Johnny first, because the floor had already told me he was the person to ask. What are we doing here that you would stop tomorrow if it were your call?

He had his answer ready, which told me how long he had been carrying it. A good share of the list was corporate machinery: reports that fed nobody, approvals that added a day to every decision, and rules written for a plant that did not exist. I started removing them one at a time, and I made sure the floor knew whose idea each one had been.

The supervisors on the other shifts got the same question, and their lists overlapped with Johnny's far more than the corporate scorecard overlapped with any of them. That overlap became my first operating plan, and it cost nothing.

That last part mattered more than the changes themselves. A plant reads its manager the way a crew reads its captain. Within a few weeks the people who had been waiting for permission stopped waiting. Johnny had the credibility, I supplied the authority, and together that was enough to get the building moving. Productivity climbed first, then output, and over time the asset went from the back of its network to the front of it.

Then I left, which people find odd. The plant was better, the rhythm was set, and my next chapter was at McKinsey & Company. Johnny was still there. That was the whole point of the exercise.

How I Read a Plant Now

I have walked a lot of plants since, in diligence and from a lot of board seats. The habit from that first week comes with me. I ask for the org chart and read it carefully. Then I go stand on the floor at shift change and watch where the questions go.

Every plant has a Johnny. Sometimes it is a supervisor, sometimes a maintenance lead with decades on the property, sometimes a scheduler who never appears on a slide. The person is rarely the one the formal leaders mention first, because they tend to describe the org chart and the org chart is the part everyone can see.

The tells are small. Who gets interrupted mid-sentence in the production meeting and who never does. Whose desk the new hire is sent to on the first morning. Who the plant manager glances at before answering a hard question. None of it shows up in a data room, and all of it shows up within 2 hours of standing in the right place.

For a founder, this is good news. The people who really run the business are a large part of why it is worth buying, and a buyer who knows their names in the first week is a buyer who will protect them. I would rather find that person before a closing than learn about them after a resignation.

This is also why I ask sellers and their advisors for floor time early. A walk at shift change costs an owner an afternoon and tells both sides more about fit than a month of data room questions. A banker who welcomes that walk usually represents a business that holds up well under it.

Drawing the Map

There is a formal name for this: social network analysis. The idea is simple. We ask people on every shift 3 questions: who do you go to when something breaks, who do you trust to tell you the truth, and whose approval do you need before you change anything. Then we draw the answers as a map, with a dot for each person and a line for each answer. The people with the most lines running to them are the ones the building actually runs on. The people whose lines cross between shifts or departments hold the place together. Leaders with few lines tend to have authority on paper and very little pull on the floor. It usually tells us more about the organization than a year of reporting would.

For years we did this the slow way, with a notebook, a stack of index cards and a whiteboard in the break room that filled up over a week of shift changes. It worked, but it was laborious, and it leaned heavily on whoever happened to be standing near us when we asked. Today digital tools carry most of the load. A short web-based survey reaches every shift at once, including the night crew that a daytime visitor rarely meets. Within a day or 2 the software turns the answers into a map, with the lines weighted, the clusters grouped and the bridges between departments easy to see. The map is where the work starts. We follow it with interviews and time on the floor, sitting down with the people at the center of it and watching where the questions actually go at shift change. The survey tells us where to look, and the conversations and observation tell us whether it's right. Put together, they let us hear from everyone instead of the few people who were closest to the clipboard.

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A Week Without a Committee

Institutional buyers tend to arrive with a plan. A 100 day deck, a consulting workstream, a steering committee that meets on Thursdays. The plan gets written early because an approval process needed it, which means it gets written before anyone has stood on the floor.

A fundless sponsor works differently. The first week in the building is my diligence, my operating plan, and my read on the leadership team in 1 step, and there is no standing committee that has to bless what I learn before I act on it. Full authority comes paired with full responsibility, and a week of watching is the cheapest way I know to earn the right to use both.

Find the person the plant walks toward. Then protect them.

Johnny’s name and the plant details have been changed

I am the founder of Swaney Group Capital, a fundless sponsor focused in the lower middle market. LeverUp® is published weekly. More if I have something else to say.