Situation

 

A second-generation engineering company where the original owners had pretty much clocked out of the business but were still involved at board level and benefiting from its continued success.

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The business was profitable, providing the original owners with a pretty good lifestyle as a consequence, but wasn’t really trading at its full potential. While the business had an astute and capable GM, they lacked the skills, knowledge and experience to take the business to the next level. With the current owners lacking any real drive, the business needed an injection of purpose and focus.

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The second-generation family members that worked in the business weren’t of the calibre to take over and grow the business but the GM was. He was an experienced Engineer that was elevated to GM 7 years prior.

 

He formed a strong partnership with the Chief Engineer with them collectively managing an efficient operation, but both lacked experience to accelerate growth, particularly into international markets. They were invited to invest into the business and given more freedom to take the business to another level.

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They wanted to expand the business with particular interest in exporting more. They saw this as a real growth area for the business. What they didn’t have is the experience needed to expand internationally.

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Solution

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We were initially brought in to review the current state of the business, assist with a valuation and with the transition from first-generation ownership to the pseudo-second-generation / GM buy into the business. As this process unfolded, we Identified the gap in skillsets within the business and suggested they establish an advisory board that would better support the management team, bringing in expertise and experience that currently didn’t exist within the business to help it grow.

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We undertook a detailed evaluation of the business – its positioning and presence in the market, its competition, where it was weak and what its current strengths were. As mentioned, we reviewed the management capabilities within the business and what additional resource were needed to identify market opportunities and take advantage them both local and internationally. We helped set up the advisory board to bring more commercial awareness, drive, expertise in entering overseas markets and a stronger marketing input into how to present the business and its brands to both local and international markets.

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The whole set-up process took 3 months. We chaired the advisory board, bringing a disciplined and analytical approach to the company’s strategic focus and added subject matter experts when they were needed. As a support mechanism, the advisory board was there to provide commercial advice and greater more in depth business intelligence into future decision making. We didn’t make the decisions, just offered our expert advice. Instead, decisions were made by the management team.

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The board of directors still existed within the business but it’s main focus was more on compliance and risk management, while the advisory board was all about supporting the management team in driving growth in market share and expansion at an accelerated rate.

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Outcome

• Clear vision and purpose for the business, and a supporting action plan on how to deliver that vision within a 3-5 year timeframe.

• Clarity around the state of the market, its opportunities and how best they could take advantage of them.

• A sense of purpose that was easy to convey to all staff.

• Greater support of the management team

• A disciplined approach to the strategic growth of the business with regular progress reviews, including opportunities to realign the business to what its strategic goals were.

• Upskilling the management team – passing on important experience, skills and knowledge.

• A GM that no longer felt it was all up to him to deliver.

 

The continued business growth is testament to the dedication and drive of the management team. That was made a lot easier for them with the flexible support that was provided by the advisory board.