Ne restez pas seuls face à la crise
The upstream Operational Audit is the backbone of the intervention.
It is identifies root causes of the business under-performance and its key success factors.
It sets guidelines for the Operational Performance Improvement Plan in itself and its modus operandi: what to do and above all how to do it, keeping in mind we are not sacrificing the future of the company on the altar of emergency….
It quantifies and plans in advance expected outcomes in terms of value creation and cash position.
It stands as an instruction manual for guiding the company towards sustainable improvement of its economic performance.
The business is not at risk in the near future but its gross operating surplus – its capacity to generate cash flows – is a few points below its competitors. Unfortunately, its sector of activity is capital-intensive. In a few years’ time, its inability to invest at the same level as its competitors may endanger its independance or even rule it out.
The audit clearly identifies root causes of this situation. It enables the company to deal with the risk and leads it towards its target profitability. Starting up on a healthier basis, new top management in charge of steering the company on a long-term-basis will be able to focus on outperforming in their market.
Baseline situation :
Conducting the improvement plan
The company finds it difficult to keep its charges and its margins under control. Its cash-flow situation deteriorates. The need for working capital is too great. Shareholders are running out of patience. It is necessary to restore control over the business management and to mobilise top executives accordingly. This transformation is inconceivable if management, prescribers and ideally all corporate stakeholders (employees, partners, key suppliers, shareholders, etc.) do not understand and assume ownership of this situation.
The Operational Audit is based on interviews of key actors, regardless of their hierarchic level. This audit is then broadly shared with everybody during a formal meeting. Financing and human resources requirements have been defined precisely as well as their essential evolution. All conditions are put in place for the success of the Plan.
Plan of improvement
A non-strategic activity is to be divested. Carving-out poses many difficulties:
The Audit sifted and processed all necessary conditions. D&I can know assume the operational management of the business in order to conduct the predefined Plan, ensure a smooth transition between the current company and the new transferee, avoid any conflict of interest involving the incumbent director, etc.
Metal industry company with a turnover of 50M€ and more than 250 employees. Two very different businesses: boiler making and mechanics.
The chairman wishes to carve out the boiler making activity into a subsidiary in order to subsequently sell it.
Major topics of work
A new acquisition has just been signed. The well-known first 100 days is beginning and the company has to immediately adopt the good tempo of the business plan.
The Audit assessed the compatibility between business plan objectives and the characteristics of the company which were fully considered : market position, organisation and management methods, HR potential, industrial tools, information and control systems, etc.). The main objective is to quickly prepare the company to face the challenges of the new business plan and choose the relevant KPI. To help the actual CEO in that transformation, D&I Partner will assist him and share his experience of that kind of situation.
The implemented Action Plan:
Consequently, EBITDA is improved by 25% and treasury is back.
Investors have committed substantial funding to the company on the basis of a very ambitious business plan. A few years later, the results have not met the expectations : the fundamentals of the activity are still promising but real growth rate is dramaticaly underperforming. Development opportunities are numerous but the ability of the management team to catch and transform them is under questions.
The Audit held with the internal teams showed a lot of issues hampering a good execution (products/markets, organisation/structure, R&D/production, management systems). Whereas the incumbent director remains often focused on business development (his/her first area of expertise), D&I knows how to ensure operational management of the company’s transformation.
The corporate group is financing its internationalization growth through acquisition and the development of new platform of innovative products. He received important equity funding. However, 2 years later, performance does not meet BP’s expectations.
Implemented Action Plan