After 18 months failing to achieve financial commitments, implementation of new
business model delivered sustainable future profits.
Business Context:
• The Unit failed to deliver commitments in 18 months, generating a loss for 6 consecutive months
• Autocratic management style discouraging cross functional information sharing.
• Profit management perceived as a finance issue.
• Communication from Corporate Head Office channelled through Unit Head.
• Employees felt little ownership for the business and morale was low.
• Project brief was to return the business to profit within 6 months and review the business structure to ensure sustainable future profit.
• The Unit failed to deliver commitments in 18 months, generating a loss for 6 consecutive months
• Autocratic management style discouraging cross functional information sharing.
• Profit management perceived as a finance issue.
• Communication from Corporate Head Office channelled through Unit Head.
• Employees felt little ownership for the business and morale was low.
• Project brief was to return the business to profit within 6 months and review the business structure to ensure sustainable future profit.
Results:
Business unit returned to sustained profit within 2 months
Business unit returned to sustained profit within 2 months
Entered strategic alliance with major player in market:
• Significant upfront payment generated in addition to royalty fees at a level guaranteed to achieve the required profit for 5 years.
• 62% of employees moved to roles with strategic alliance partner and remainder left the organisation believing that they had been fairly treated.
• Significant upfront payment generated in addition to royalty fees at a level guaranteed to achieve the required profit for 5 years.
• 62% of employees moved to roles with strategic alliance partner and remainder left the organisation believing that they had been fairly treated.
Approach Adopted:
Employee involvement:
• Involvement of functional heads in information sharing to provide a full picture of the value chain
• Mentoring functional heads to undertake market, environment and competitor analysis
• Coaching functional heads and key employees to understand commercial realities and identify options to improve profitability for short and long-term.
• Working with team to develop recommendation on appropriate future business model, impact and risk assessment and implementation plan
• Creating a vision, sharing the strategic options with all employees and creating a professional pride in how they handled the process
• Ensuring provision of support to employees through difficult, ambiguous times.
• Honest and regular feedback to employees on progress and celebrating milestones.
Employee involvement:
• Involvement of functional heads in information sharing to provide a full picture of the value chain
• Mentoring functional heads to undertake market, environment and competitor analysis
• Coaching functional heads and key employees to understand commercial realities and identify options to improve profitability for short and long-term.
• Working with team to develop recommendation on appropriate future business model, impact and risk assessment and implementation plan
• Creating a vision, sharing the strategic options with all employees and creating a professional pride in how they handled the process
• Ensuring provision of support to employees through difficult, ambiguous times.
• Honest and regular feedback to employees on progress and celebrating milestones.
Stakeholder management:
• Sharing of vision and plans with stakeholders and providing regular feedback on progress.
• Sharing of vision and plans with stakeholders and providing regular feedback on progress.
