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We have led several successful Finance transformations. Improvements in team contribution for these projects has been significant and include:
Every journey has been unique. Part art, part science, we have a dependable approach that results in sustainable change and the creation of high performance teams.
Every transformation starts by understanding overall corporate requirements and assessing current performance. Opportunities are categorized based on how quickly they can be captured.
Immediate
Can be captured with existing skill sets, systems. Minor changes to processes required. Little interdependency.
Shorter Term
Can be captured with existing systems. Changes to skill sets and processes are required. Moderate interdependencies.
Longer Term
Significant changes to skill sets, systems and processes required. Substantial interdependencies.
The Finance Team is engaged to create a vision and desired state, ensuring alignment with corporate goals and objectives and incorporating identified opportunities. A clear success statement is developed along with objectives and metrics. The benefits to the company are identified and quantified where possible. A high level implementation plan is formulated. Interdependencies are highlighted.
The plan is presented and discussed with the C-suite. Once their support and approval has been obtained, a governance structure and project team are established.
A detailed plan is developed with timelines and milestones, which can be cascaded to the individuals on the team. This helps build a line of sight from each person’s activity to the achievement of overall team objectives. Consideration is given to creating an incentive plan to support behavior change and team transformation.
Project management methodologies are applied to ensure successful execution of the plan. Of particular importance are ongoing problem solving, communication, removal of road blocks, empathy for the need to balance day to day work with transformational activity, and keeping desired state front and center to maintain energy and momentum.
Our transformation approach is flexible. Some engagements have required all elements of the framework to be applied. In other cases, a scaled down version has been used with great success.
Our client’s European division was forecasting losses of over $1.5M, on the back of previous year losses of $1.0M.
We were asked to investigate. We started by quickly getting an in depth understanding of actual results year to date and digging into the forecasts for the balance of the year. We conducted several team and individual meetings to explore opportunities to improve revenues and margins, and decrease expenses. We further reviewed any planned investments having a negative contribution in the fiscal.
We then presented a profitability improvement plan which would take the division to $500K in after tax profits; a $2M positive change from the original forecast. The plan was approved and we assisted with it’s implementation.
$4M Operating Expense Reduction
In the face of continued revenue deterioration, our client needed to realign their expense base. Industry benchmarking provided an initial high level target.
We then worked with our client to develop a cost reduction pipeline. Data included the cost reduction initiative, potential savings, and operating changes that would need to be made to achieve them.
The report was reviewed with the C suite. Agreement was obtained on which ideas to pursue. As many of the initiatives had an enterprise wide impact, we worked with the Corporate Project Manager on a communications strategy and to create a number of cross functional teams. Each team took ownership for a specific cost reduction opportunity. We continued to provide guidance during the execution phase, ensuring the cost saving opportunities were captured.
Corporate Strategy and Liquidity Event Modeling
Our client was considering a three year liquidity event. Strategies on how best to grow enterprise value were explored with them, including revenue growth and expense reduction scenarios, and underlying initiatives and investments.
We proposed building an interactive, comprehensive three year model which would allow the ideas and concepts to be translated into hard numbers. The model would also provide insight on the sensitivity of the valuation numbers to underlying business drivers.
The client agreed. The model, with a visual interface, was completed and presented. With the client and ourselves both using the model, what quickly became apparent was that the target valuation numbers could not be achieved without building or buying new operations and revenue streams. This then became a component of the company’s strategy.
The early identification of what was required to achieve the client’s valuation target provided ample time to make the required changes.
Acquisitions Strategy and Framework
Our client had a weak track record in achieving desired outcomes for acquisitions. Their financial performance was deteriorating, with one particularly large acquisition having a significant drag on their results.
Our first step was to work, as part of a team, to successfully negotiate the return of a portion of the purchase price.
We then worked with our client to change the way that acquisitions were done, developing an M&A strategy and framework. This resulted in acquisitions being more tightly aligned with corporate goals and objectives, better governance, and stronger due diligence.
Predictability and Accountability for Financial Results
Our client wanted to improve predictability and accountability for financial results.
We started by gaining agreement on the organizational and accountability structure. We then worked with the Finance Team until the numbers could be appropriately organized by function.
The next step was to develop an Operating review process. End state would be a meeting where each function head would be able to clearly explain their results year to date against plan and the previous year, and to present forecasts for the balance of the year, including assumptions, risks and opportunities.
To get there required training, new reports, and ensuring each function head would get adequate support from the Finance Team.
The end result was enhanced business and financial acumen, stronger ownership of the results, and more accurate forecasts.
Our client was experiencing uncertainty when evaluating investments post launch and in many cases, weak returns were negatively impacting the company’s financial results.
Our first step was to ensure organizational clarity on corporate strategy. In this way, proposals could then be screened for strategic alignment.
We then developed a business case framework which would guide people’s thinking and help them document their ideas. Rigorous financial analysis was required and Finance Team resources were made available to support this as required.
The end result was significant improvements in the quality of thinking and analysis for all new proposals. Better decisions were made faster. Success criteria were identified in advance which made it much easier to track actual performance against target. The client’s financial performance improved as a result.