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Case Study 01: Interim CEO Management

Enterprise Value increased from a negative $81 million to $95 million:
An increase of $176 million.

The Situation Upon Arrival

Business

  • Backlog business based on public bids
  • Coast-to-coast locations
  • Built by a series of acquisitions
  • Revenue producing equipment intensive
  • Skilled labor

Results of Strategic & Operational Evaluation

  • Major unreported losses
  • $750,000 weekly cash burn
  • "Pumped up" backlog
  • Multi-year deferred maintenance for revenue producing equipment
  • No strategy
  • Debt agreement in default
  • Construction bonding agreements in default

How we approached it

01. BUSINESS MODEL

Reconfigured the business model and redeployed assets away from high risk/low ROIC assets to a business unit that had growth potential but was starved for resources.

Sold the cornerstone business unit that was high risk/asset intensive/low ROIC/slow cash velocity.

Sold a low margin operation.

Closed down two cash draining operations.

02. STRATEGY

Developed & implemented a comprehensive strategy that focused on a previously cash starved business unit & avoided non technical customers; such customers caused major production delays, inflated costs & reduced cash velocity.

Targeted the demanding highly technical/experienced customer segment.

Changed bid pricing methodology, improved bid intelligence and implemented a rigorous job walk before bidding a contract.

Included skilled on-site workers in the bid meetings; dramatically improving bidding competiveness.

Trained and developed 50% additional highly-skilled production crews to generate incremental margin while reduced fixed overhead.

Changed field workers’ compensation; enabled more aggressive and much more profitable bids.

03. ORGANIZATIONAL STRUCTURE

Changed organizational structure to match the "renewed" culture and new comprehensive strategy.

Reduced corporate overhead by 60%.

Moved corporate headquarters into a business unit

Upgraded management team at each business unit by promoting mid-level managers.

04. MANAGEMENT PROCESS

Established a management process that focused on a cash mindset and continual interaction among the entire organization that provided a foundation for decision making.

Implemented rigorous weekly reviews at each business unit; used these reviews to train and develop the new management team.

Implemented a 13-week cash forecast and detailed collections forecast for each business unit.

Established gathering market intelligence as part of everyone's job.

05. SUPPLY CHAIN

Radically changed the value chain and supply chain to create a string of activities that was unique and provided what the targeted customers wanted most: more competitive prices and improved cycle time.

Focused production workers on installation & removed their distraction of being responsible for material deliveries and equipment maintenance.

Developed an in-house maintenance function that became a sustainable competitive advantage:

Increased equipment availability and dramatically reduced emergency breakdowns. Refurbished used equipment rather than buying new to stretch limited CAPEX dollars.

Established supplier partnerships for non-core functions.

Eliminated an "old boy" procurement process.

06. CULTURE

"Renewed" the culture to continually challenge the status quo, leading the entire organization to work together to identify and solve problems and rewarded (bonus & options) all levels of the organization for exceptional performance and a can do/team attitude.

As Interim CEO, spent 75% of time in field establishing relationships with entire organization.

Interim CEO & CFO along with remaining corporate HQ's people established a customer service mindset with the field.

Business units began sharing skilled workers and production equipment.

Began awarding bonuses and options to the field organization.

Implemented a safety program that dramatically reduced the MOD Factor from 1.13 to 0.79

We've been named as Interim CEO for organizations located throughout the U.S., France, and the UK.

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