The Client's Challenge
The company’s Revenue Growth was not meeting the private equity firm's expectations.
The CEO was expecting 25% annual organic growth but current sales trends were providing early warning that these expectations may not be met. This raised concerns that the existing strategy may have become obsolete or misaligned to the growth targets, possibly due to significant changes in the business environment during the past few years.
Compounding the uncertainty, some new hires in key leadership positions did not feel the current Key Business Initiatives would deliver the anticipated or expected business growth.
The assignment was to
Evaluate the current strategy’s ability to deliver the expected growth.
Recommend and make the necessary changes to maximize business results and value delivery.
The first step was to assess the current strategies’ ability to deliver expected growth using the TOP® Financial Quantification Tool (Value Equation module).
Then, the Strategic Contribution Assessment Tool, SAT (Strategy Alignment module) was used to identify and prioritize the strategic elements critical to delivering the expected growth rate and then to assess the Key Business Initiatives' ability to deliver the strategic elements in the new business strategy.
This showed that in the original strategy, 18 or 24 strategic elements would not deliver the expected growth rates.
Of the original 15 Key Business Initiatives, 10 of the 15 were not aligned with delivering the strategy.
Then, utilizing the Value Equation (module) Tools and Techniques and working with the leadership team, new Key Business Initiatives were identified, with precisely defined desired business outcomes, to execute on the new business strategy.
Finally, the Change Planning Tools and Techniques (Change Planning module) were used to systematically identify all of the required changes from the current state to deliver the desired future state. The change plans formed the basis for the program and project plans of all the Key Business Initiatives. One of the Sustain activities generated by this process was to establish a method to monitor progress at quarterly board meetings.
In six quarters the business achieved revenue growth of 10% CAGR and EBITDA growth of 32% CAGR.
A new 2012 Strategic Plan with 20 strategic elements was created with a significant shift in emphasis to that of the external customer view. The sales activity shifted from "Trapping and Harvesting" to "Hunting and Farming". The company is now also pursuing new market segments.
15 new Key Business Initiatives were identified that were in alignment with the strategic elements to replace the ones (10 of the original 15) which were not aligned with delivering the strategy.
CEO's entire staff said they could see a clear alignment of the Key Business Initiatives and delivering the new Strategy.
The sales organization was realigned to deliver the growth strategy. A new head of sales was hired to lead the effort.
With the shift to “Hunting and Farming” 1st Qtr. customer visits increased from zero (0) in 2011 to 17 account visits in 1st quarter 2012. These visits resulted in $29 million of additional opportunities.
The business leadership team together identified all of the key areas where they needed to support each other in meeting the Key Business Initiatives and have incorporated those areas into their personal performance and bonus assessment. This has created a cohesive and focused leadership team.
The CEO of the company described the process as “Transformational” as it encompassed not just an assessment of the opportunities and strategic actions to achieve the goal, it actively involved the executive team in evaluating the inter-related elements of the envisioned success to a level of ownership of execution essential to deliver that success.
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