CASE STUDY: Residential and Commercial Construction Company
($30m turnover and employing 100 staff)
The situation:
The business had been operating for 20 years and undertaken significant growth in the last five years. The Directors identified areas for improvement in the business performance but were unsure about how these should be addressed. They also wanted to develop an exit strategy that enabled them to sell the business at a premium value within the next three years.
What we did:
The Consultant completed a detailed analysis and strategic review of the business and this process involved all key stakeholders including staff, suppliers, subcontractors, clients and their professional advisers. A business improvement strategy was presented to the Directors that identified a range of initiatives to be implemented to build the capability of the business and support the preferred exit strategy of a management buyout.
Key components of the improvement strategy included development of transitional organisational structures to support delegation of the directors functions to the management team, appointment of staff to new roles to improve technical resources and support systems for site management teams, a balanced scorecard management reporting system to track multiple construction projects, human resource strategies for staff development and succession planning to overcome industry skill shortages, client relationship management processes and systems to generate referral and repeat business and the investment in an integrated financial management and reporting system.
The outcomes:
The consultant is providing a range of support services to the client including project management and delivery of agreed initiatives, coaching and mentoring of the directors, management team and staff within business. Strategic partners of the BDN have also been introduced to the client to provide a range of services identified in the business improvement plan - examples include access to Employment Law advice, development of a consistent meeting process and methodology across the business, and the introduction of potential financiers of the management buyout process.
The consultant is guiding the organisation through the change processes associated with the management buyout and has been instrumental in establishing an advisory board structure that will facilitate the transfer and ownership whilst maintaining access to skills, knowledge and expertise of the directors for an agreed period. This has been a key factor in maintaining the reputation of the business in the marketplace and building confidence with suppliers, subcontractors and clients that the transfer of ownership is a positive development in the business. The structure also ensures that the management team has access to a strong and multi-skilled advisory team to support them develop and grow the business.
A key measure of success for this client has been the ability of the Directors to firstly confirm and then implement an exit strategy that enabled them to sell the business (by MBO in December 2006) one year earlier than had been originally planned and for a premium price.
