Operations Evaluation and Rationalization
Companies carry inefficiencies. Excess non-revenue generating overhead; outmoded pay structures; incentive schemes not aligned to the current markets or creating disharmony within the company divisions; executive compensation out of alignment with those achieving the results can all manifest in inefficiencies.
Acquire a new operation then the inefficiency content is likely to increase, whether through unrealized opportunity to rationalize operations ( merging plants) or overlapping office overhead (duplicated personnel and accounting systems). Divisional expansion can cause territory overlaps and divisional conflict on who gets the customer credit and inconsistency in the rewards structures.
- Strategy, Plans & Processes
- “End to End” Process Assessment
- Economic Analysis
- Business Impact Assessment
- Performance Monitoring, Controls & Reporting
- Customer, Supplier & Employee Feedback Evaluation
- Employee Skill Match Evaluation
- Communications Processes
Analysis and Rationalization
Addressing inefficiencies through and Analysis and Rationalization review, particularly if company expansion is through merger, acquisition and joint venturing for product and market expansion, is a key part of assessing the bottom line health of operations and how added stockholder value could be extracted.
Inefficiency Consequences
Carrying inefficiencies has direct consequences for the bottom line, either directly through excess overhead, or the missed opportunity to re align production and development. Further, the cost of ineffectiveness due to misalignment of remuneration and discord can have a material effect on organizational effectiveness and hence be a drag on bottom line performance.
Implementing Change
Most critically is the approach to implementation. Managing change is difficult so a unified approach is needed. The approach combines 5 key attributes:
- Executive lead team structure tasked to manage the process and extract the value
- Resulting clear work plan and timetable
- Full transparency of what is happening, why and regular communication on progress
- Fairness to all and be seen by all to be fair.
- Everyone should know when the restructuring is complete and what has been achieved for the benefit of all. Shareholders and both present and former employees.
Managing change is not a “one off” activity. Just as the company has to constantly adapt to market and customer changing needs, so do the internal mechanisms of the company need to adapt through an ongoing structured process of review and action. This has to be top down. Managing change is not an executive delegated task.
Operations Solutions
Inventing Email: Growing a startup email provider for acquisition into global system
An early email pioneer sought to expand its market reach beyond Washington, D.C. A licensing and integrated services strategy was crafted to establish anchors worldwide with telecoms providers.
By implementing the strategy, the startup achieved global adoption of its email technology with leading service providers. As a result, revenues increased along with bundled services and the company was acquired in a multi-million dollar deal by a global operator.
Wireless Systems: Transforming a key provider into a diversified, growth-oriented enterprise
A major telecommunications enterprise sought to become an integrated services organization. A three-phase strategy was developed to increase reach through local joint ventures and market share through acquisitions. Through the strategy, the organization significantly expanded its portfolio and established a strong presence in US and European markets. The portfolio enabled substantial cross-marketing and integration of services that propelled the enterprise as a leading telecoms provider.
Restructuring and diversifying a major 100-year-old family steel fabrication company
For a 100-year-old family steel business, the future was uncertain as contracts ended and leadership passed. To tackle the challenge, a three-pronged strategy was created to improve revenue streams, processes, and planning. Internal reforms improved cash flow and banking arrangements while front office initiatives secured major new clients. As a result, the business expanded into a larger facility to meet its diversified offerings and was recognized as the best steel contractor in 2018 by a major regional developer.