Return to profitability in a weak economy
This family business had been operating in the services sector for over 20 years and had earned a great reputation for quality and reliability. However sales and profitability had declined and the Managing Director felt that new blood was required to return the business to profitability.
An initial business review priorised a number of areas that we needed to work on. The initial priority was to work out a succession plan and family charter that set some clear objectives and ground-rules regarding future business roles and responsibilities. We then dissected the financial model, benchmarked performance against similar businesses and implemented better reporting with the goal of improving profitability and ways of measuring it.
Toolbox meetings were redesigned to focus on more strategic issues and staff were given greater responsibility to identify and implement opportunities for improvement. The market was segmented into customers and services, key targets identified and sales training provided. After about six months the business started to return to profitability and has since continued to grow.
Addressing the chaos of growth
The life of the Managing Director of this service business was being consumed by his business which was both profitable and growing. An initial business review identified a number of issues that were contributing to his increased stress levels that were also trickling down to his 20+ staff.
Part of the reason was that even small decisions were being referred up to him leaving him with little time to work on the business or have a life outside it. This was resolved by developing a clearer organisational structure and reporting lines to ensure better communication and to set clear responsibilities around each manager and business unit.
The implementation of a more efficient accounts structure and introduction of clear KPIs also ensured that financial performance could be more easily measured and understood for each business unit. Improvements in performance were then achieved by conducting a series of waste audits to identify and remove inefficiencies that were causing frustration for staff and customers.
After these burning issues had been addressed a three year business strategy was developed to ensure that the business could continue to take advantage of growth opportunities while enabling the owner to get back his life.
Achieving sustainability under a new funding model
A recently appointed Chief Executive of a Not for Profit business asked for help to better understand a new fee for service model. An initial business review revealed significant challenges in record keeping and organisational processes which, in conjunction with changes to the business’s funding model, represented a real threat to sustainability.
Following the review, changes were made to the financial system to enable better understanding and control of profitability and cashflow. Some changes to staff were made along with a focus on increased delegation and ensuring problems were solved at the right level. The increased empowerment of staff resulted in a positive shift in organisational culture. The business also identified alternatives to diversify income streams by starting a new service and an operational plan was developed to achieve this.
After nine months governance training was provided to the Board and a simple governance improvement plan was implemented. Six months later a three year strategic plan was facilitated in conjunction with the Board and Executive Director with input from senior managers. This organisation is now in much better position to operate in sustainably into the future.