Transition to Non-Owner Leadership

Situation

A custom manufacturer of retail fixtures was struggling financially as its two brother-owners wrestled for control.Years of past growth attributed to superior design and production technology turned flat without a focused sales effort. What’s more, a major customer shifted half of its volume to the company’s main competitor.

Challenges

• Negotiate the sensitive sale of the company from one brother.
• Identity new non-owner leadership and management.
• Establish a sustainable new business development effort.
• Put new financial controls in place.

Solution

Platinum Group facilitated the sale of the company and provided guidance for streamlining operations as well as getting the right employees in place and prepared to move the company forward. This started with selecting and mentoring a new non-owner manager and management team, followed by recruiting people with solid marketing, sales and customer service skills. This new organizational structure was supported by a results-based compensation. In addition to ongoing mentoring, all personnel were trained in Theory of Constraints — a principle for increasing the efficiency of the manufacturing process. A multi-functional team developed a business growth plan, which included a recommendation to narrow the marketing focus and develop sales support tools, such as creating a single sales database and launching a sustained outreach. Finally, new financial controls were added to achieve breakeven, preserve cash and line of credit availability.

Results

In the following six months, new business generated increased revenues, additional new accounts and restored profitability. More than 50 employees each received a bonus for their 15% share of the pre-tax profits as this profit-sharing culture has taken hold to drive performance.