Back to black in six months
A machinery manufacturer had lost its way, as rising complexity had begun to take a toll on its customer relationships and its performance. The new CEO could see he had to make some hard choices fast. Six months after he began working with August, he had the company back on track, and exceeding its short-term targets in revenues and profits. Even more importantly, the company was better positioned to build a sustainable and profitable business founded on its core strengths and focus markets.
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Challenge
The company, a subcontractor to major machinery OEMs, was suffering from a long stretch of poor performance. When the new CEO assessed the situation, he realized that stagnating sales and deteriorating profits were largely due to an unclear business focus. The company had spread its efforts to a large number of markets and customers, but had simultaneously created unmanageable complexity in its operations. A fast turnaround was clearly needed, and the CEO, together with the Board, decided to launch a strategy revision project, with the objective of clarifying the company’s focus and putting it back on a profitable growth track.
Brave the future
The joint Client-August team started the strategy work by looking at the attractiveness of different markets and in parallel doing an honest self-evaluation regarding what the company is truly good at. The team made clear strategic choices on focus markets and segments, which allowed truly putting the customer at the center of the strategy. This had direct implications to the way the company worked. For example, we revised the management model and organization set-up to be better aligned with the new strategy. The roles of the production units were also realigned to match the key product and service needs of the focus customers. The clarified structure helped revive the company’s can-do spirit after years of lackluster performance.
Impact
It did not take long for the new direction to start generating impact. Already after 6 months the company was back to black with a result that clearly exceeded the short-term targets both in revenues and profits. Even more importantly, the company was much better positioned to build sustainable and profitable business in its core markets, together with its chosen focus customers.
Client CEO testimonial:
“What really left a positive memory trace in our organization was August’s consulting approach. Myself and my colleagues find August consultants as a hardworking team that sets the bar high in what they do, but at the same time they are very easy to work with. Their team showcased true interest in our company and willingness to help us to get better.”