Spotlight On... Contact
Tom Pickering BA (Hons) FIET
Tel: +44 (0) 207 1935518 Mob: +44 (0) 772 0597869
Email:
office@icebreakerexecutive.com Web:
www.icebreakerexecutive.com
team that must deliver and fully commit to doing what they say. Provide the support structure, create the right organisation, get additional funding organised as required to support the plan, or ratify the plan with
creditors. Take insolvency advice to confirm the legitimacy of the approach.
In some instances the business will need to be cut back to a defendable core, which might
Case Study Prompt to engage: The directors thought they could cope until they had a meeting with the
bank in late May, it was clear the bank would no longer tolerate further losses.
1st half day evaluation and engagement: An electronics business turnover dropped from 17m in 2011 – £7m in 2013. The business haemorrhaged cash for most of Q1 and Q2 2013., and revenue was 40% below breakeven. The management team has failed to manage the sales pipeline and or achieve monthly sales targets. Product pricing was inconsistent and key customers were being let down. The business balance sheet was £1.5m negative as funding was still geared to the 20m revenue level and working capital. The business failed to retain attract or recruit effective staff and the two founder directors micromanaged the business intensely and undermined the staffs efforts. Historically the business had failed to achieve any forecasts, cash and financial governance and systems were not in place and teamwork ineffective. Tom adopted the role as chairman to get to grips with the governance and deliver the change top down as the two directors were so central to correcting the deep rooted management problem in the business.
Containment: Headcount was cut to reduce the breakeven to just less than £7m. A realistic sales forecast was created, and profit and pricing per customer established.
Implementation: Tom created a myopic focus on achieving a minimum of 600k monthly revenue and put the supporting management and team structure to return the business back to profit by delivering more output from less head-count, and making direct savings across the board.
1st 2 weeks outcome: Two weeks after engaging in June 2013 the business achieved £640k revenue and returned a 10% profit (including restructuring costs). Tom engaged with the directors and completed an IBR to establish the financials and governance gaps. A sales director was appointed, and means of managing existing and new customers put in place. A turnaround plan was created to recover revenue back to profit which included putting in place the right organisation, educating the directors as to their roles, and how to interact with the team and new structure. An initial view of customer strategy was taken with pricing and profitability per customer targets and new business.
Cash return: The recovery plan to improve the banks position by £1m cash by the end of 2013. The staff were fully engaged in achieving this and had the resources to do so.
Working style: Completely focussed on immediately correcting the governance and correcting the cash position by developing a highly motivated, high performance accountable team capable of achieving the plan. Strong motivational, capability assessment and delegation skills and lead at the top and cascade the change throughout the organisation to develop the capability for the long term.
47
mean restructuring the business, and or if the business is viable moving forwards but not with the current debt a prepack or CVA may be a course of action worth exploring. The key is to keep ALL the options open, and investigate them fully without trading to the detriment of creditors, and measuring and communicating with creditors frequently and accurately. The directors’ responsibilities change to the focus on duty to the business creditors, which often conflicts with their own interests.
The directors and staff need much advice and action
Icebreaker deploy our professional development program in these situations to ensure that we evaluate the situation, engage and deliver change much faster, provide the right structure flexibly to suit the scenario, and deliver to meet the stakeholders expectations. Specific sector, functional, financial, scenario experience is drawn in from our vast experience of doing these projects many times, and our focus and specific skills in creating cash.
Q
Is there anything else you would like to add?
The ability to reach the right decisions in half a day by recognising the scenario, recognise whether the business has a sustainable margin, recognise what good looks like, understand what you are being told (beyond the face value of the words), and the ability to permanently change behaviours. The financial results and successful legacy follow if you get the strategy and deployment right.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66