A European subsidiary of a US Privately Owned Consumer Goods Company, European turnover £4.5 million.

The Challenge/ Problem

The American/ Chinese owners of the parent Company had run out of patience with their European subsidiary and we were contacted via a network contact to help sort the problems. On arriving in the business we found that earnings were declining and last year a loss had been posted and the subsidiary was effectively run by one family who had used it for their own ends to the detriment of profitability.

The Action Taken

Utilising our HR and General Management/ Strategy resource we scoped the problem and assessed the current state of the business. We devised a new structure appropriate to the business needs which necessitated a change of leadership and personnel (including the MD). We led negotiations to separate from the MD with the individual concerned and reached a settlement which was acceptable to the owners and the individual. We held consultation meetings with staff outlining the new structure and the selection process. We embarked on the recruitment of a new MD. We developed new sales and marketing strategies and devised budgets for the following two years agreed with the owners. We trained and coached the sales team and internal team in new duties and approaches to the business – sharing goals with them. We then worked alongside the new MD for the first three months of their tenure to effect a smooth transition.

The Outcome

At the conclusion of the assignment the business was 25% up on the new budget and the new structure was working smoothly. We had taken c £350,000 of cost out of the business (with some one off restructuring cost separate to this) which gave the business a far more realistic cost base improving EBIT. A new dynamic approach to selling and marketing had also secured better customer support having a positive effect on the sales line and gross margin which subsequently fell through to the bottom line.

Financial tracking and measurement had also been improved via the implementation of new Management Information processes and templates.