Driving Strategic Change in a Rapidly Changing Market
1. Executive Overview
SHM was acquired by the Gordon Brothers Group in 2004 as a turnaround project. Corrective action had been undertaken to address the financial shortfalls in the business and attain financial stability. Although the business was now cash positive it remained fragile and wasn’t meeting its acquisition expectations.
2. Challenges Faced
Fundamental questions therefore need to be asked,
- Is the business worth the significant amount of management time and resource required to sort out the strategic issues?
- Will there be a viable commercial business in the UK alone following the economic crisis?
Economies throughout Europe were experiencing significant economic uncertainty and slipping into recession. The UK markets within which SHM operated; Property, ABL and corporate were all experiencing difficult conditions. Markets in Eastern Europe were deteriorating and so the business needs to respond to maintain its profitability.
Longer term it was recognised that the business would need to address its Strategic issues. In this context it was agreed that a strategic review of SHM’s options and prospects should be undertaken.
3. How We Helped
The focus of the assignment was on a number of key objectives:
- To conduct a market assessment and internal appraisal of the current business.
- Identify the key issues facing the business and the options available to address these.
- Outline potential strategic options and possible plans for SHM within a Gordon Bros Group context.
- Provide a summary plan for SHM for discussion with the US Parent Group.
- Outline and agree the key actions for an operating plan for the business.
- Articulate and agree key objectives with measurable KPI’s, within this operating plan.
4. What Was Delivered
The key challenge was to support and guide the executive team through a process to analyse and evaluate a series of potential options within extremely short timescales. A full assessment was undertaken of SHM’s relative strengths and weaknesses within the context of the current trading environment and the competition faced.
The internal issues facing the business were fully evaluated and four areas were identified as needing immediate action:
- People: Lack of quality, poor clarity around roles, responsibilities and accountabilities and poor performance management
- Proposition: The need to address the historical perceptions, raise the profile of the business in the market, and set a clear vision for the future
- Service: Ensure consistency of standards, processes and templates for servicing clients
- Sales: Improve clarity and focus on channels to market and commerciality of jobs undertaken
A series of alternative scenarios were evaluated from; exiting the business, to completely revamping the SHM operating model, with the financial best case, worst case and most likely case for each scenario being calculated and compared.
Alongside this the degree of difficulty to deliver each option the level of risk was assessed. An outline action plan was constructed for each of the strategic options, capturing the strategic priorities, objectives, actions, responsibilities and key goals.
5. Summary
Within 10 weeks IwP guided the executive team through a creative and analytical process to evaluate the potential strategic options the business had available. The outputs delivered allowed the parent company to assess the alternatives in the knowledge they had
- An external perspective gained from dealing with similar issues within diverse organisations.
- Heads up’ on key issues and opportunities, delivered quickly and effectively.
- Options had been robustly challenged and supported with honest, constructive feedback
- The Priorities had been clearly laid out with the resources of; time, people and costs to deliver options fully evaluated.
With the work undertaken the Group was in a position to make an informed decision, an option was selected and the restructuring of the business commenced within 12 weeks form the start of the engagement.