Situation

A $40 million business unit of a global technology corporation was suffering failing performance in sales and profit margin following the post 9-11 recession. Competition in the market had stiffened and customers were demanding more value both at the point of sale and at delivery and implementation. Gross margins were off target by nearly 50 percent, revenues were down 20 percent, and over $5 million of receivables were at risk.

Solution

A new General Manager, who is a NextLevel Partner, was appointed to analyze, plan and execute a rapid turnaround. The analysis revealed multiple problems including leadership failures, broken processes, missing disciplines, and a culture of underperformance. The analysis indicated the following needed actions:

  • Replacement of a number of top leadership roles through either internal promotions or recruiting to install strong, fresh leadership.
  • The development and installation of critical control processes and disciplines for all aspects of business management and operations, from sales through final collection, a broad training program, and an ongoing measurement program to insure full implementation.
  • Executive visits at each problem account to meet with customer executives to remedy any outstanding issues, restore satisfaction and release payments for at-risk receivables.
  • A number of cross functional meetings with corporate executives outside of the business unit to restore collaboration across corporate divisions and more robust ‘go to market’ teaming and sales performance.

Results

Within six months all of the required actions had been taken, turnaround was 70 percent complete, and at the end of the fiscal year both the performance and the morale of the region was restored. Performance improved in the following ways:

  • Increased sales by 37 percent,
  • Improved margin performance from 28 percent to 44 percent,
  • Restored relations with troubled accounts and collected over $5 million in at-risk receivables.

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