Frequently it takes the constraints, controls and influence of banks and shareholders to bring into sharp focus the problem or potential prize.
As an Interim CEO and Commercial Director for four different customer facing businesses in the last three years, I have been able to add extra capacity and capability by working alongside the owner, executive or shareholders to make a significant short-term impact.
I mostly work with a business for between six and 12 months only. As well as leaving a legacy benefit, I deliver a ROI between two and 12 times within the first year alone.
I have developed an eight stepped approach to delivering success, that has helped me bring about positive changes and I wanted to share with you an example.
This case study features a £10 million retail and wholesale business which is family owned and run. I joined the business at a time when it had experienced four consecutive years of losses. Their bank was frustrated by a lack of progress and was nervous about their exposure. In six months, the business returned to profit, had a 25% less working capital, and had a debt repayment plan that would take only two years to complete. The result was a happy bank, happy shareholders and also a happy MD.
To get them to this position, I worked alongside all the stakeholders to implement the following approach.
The eight steps are
1. Clarify stakeholders’ objectives: Know and understand what the MD, shareholders and banks’ objectives are over the short (six months) and longer (five years) term.
2. Judge as a customer the competition: Pay a visit, buy online and really get into the customers mindset to see what they do well and poorly; use that same mindset to appraise your offering and proposition.
3. Understand where you make and lose money: The well-known principle here is that you cannot manage what you cannot measure. Financially benchmark and appraise all the major constructs of your business. This could be sites, product categories, customers etc.
4. Appraise what is needed to turn loss into profit: This covers actions, effort, cash, resource, and time.
5. Accelerate what you can in the profitable areas: Refer to point 4.
6. Face up to and address the difficult decisions: Decide whether to make the “investments” needed or cut your losses. Involve those affected where possible.
7. Prioritise: Create a plan with milestones and communicate to the necessary people.
8. Install the flywheel of continuous evaluation: Create a weekly rhythm of reporting and review of the performance of each of the major parts of your business to be shared with those who have responsibility for that area.