Case Study 3 - Tapping the source of increased profits in a new acquisition
Why we were called in:
This company supplied products and services to the UK and international petrochemical industry and had just been acquired by an investment group. The investors had bought the business for a good price because much of the experience would depart the business with the exiting owner. The new owners were equally aware of the risks that came with the ‘bargain’ as the business would lose valuable management.
The previous owner had been a well-known and highly respected figure in the industry and had been fundamental in the day-to-day running of his business. Following the acquisition concern spread both internally and externally that without him at the helm, the business would fall into decline. This fear was reinforced by the fact that an old adversary, a larger competitor, was taking advantage of the situation through a sustained attack based on aggressive pricing. Morale within the company was dropping rapidly.
What we did:
In close collaboration with the remaining management team, Business Astute developed a strategic plan, which was agreed and rolled out across the company. No area of the business was left untouched by the new strategy.
Through their department heads all individuals in the business were;
- Made fully aware of the company’s new strategy and goals
- Coached to understand the key objectives and, most importantly, how they in their everyday roles could influence and deliver against those objectives
- Kept regularly updated of the company’s progress towards it’s goals
A key part of the strategic plan involved overhauling and re-energising the international sales activity. In a dramatic restructuring exercise the existing number of 40+ international sales agents was halved to just 20. These remaining agents were subjected to an intensive tailored training programme and a properly managed sales support structure was created. As a result, the remaining 20 agents surpassed the sales and profitability figures of the original 40!
The effectiveness of the sales effort was further enhanced by increasing the number of languages spoken by internal sales personnel from two to nine.
Profitability more than doubled in just 18 months!
How the new owners benefited:
An equally satisfying outcome was the fact that the company’s old adversary - who had previously been putting them under pressure - increasingly found themselves outsold and outperformed by the rejuvenated sales agents.
Following the departure of the original experienced business owner, people expected the company to flounder without his strong leadership. The irony is that there was already a pool of untapped management within the company with the capability to outdo previous performance. The key role of the programme was to unlock the in-house management resources by providing structures for a new team to take advantage of their existing industrial knowledge, and to apply their skills and abilities to meet the challenges. The new management team, backed by sound corporate values and armed with clear objectives, consistently delivered against targets and dramatically enhanced the company’s fortunes and their own security.
The increased profitability and reduced risk greatly increased security to staff and significantly enhanced the value of the original investment to the new owners.