Corporate Turnaround: Manufacturing and Services
The Situation
The management team of an loss making division of a global corporate were midway through implementing an ambitious 5-year turnaround strategy. As this progressed further, increasing dissonance was seen between the forecast business plan and what was being delivered. Corum was asked to work with the Division by the Corporate Centre and the Chairman.
The Approach
We worked as a joint team with Corum consultants and senior staff from Group Finance, led by the Group President. Phase 1 was a strategy and operational review to assess the viability of the current business plan, punctuated by a series of workshops with the Senior Management Team. This phase identified a significant gap in the forecast EBIT. Phase 2 was a Zero Based Budgeting process to fill the gap with cost and revenue initiatives. In the final phase we reviewed several iterations of the new Business Plan in advance of the Group Board Meeting.
The Outcome
We identified a gap in the business plan and worked with the Division to fill this ( €40m EBIT pa). These initiatives are now embedded into the budget and annual performance targets for Finance to monitor. We helped the Division implement a Rolling Forecast process. The project increased the transparency between the Division and the Group Board. Specific areas of focus were exploiting new manufacturing capacity in China, R&D/new product launches, rebalancing the Division's global footprint between emerging and mature markets. The Division became profitable in the year after the project.
The management team of an loss making division of a global corporate were midway through implementing an ambitious 5-year turnaround strategy. As this progressed further, increasing dissonance was seen between the forecast business plan and what was being delivered. Corum was asked to work with the Division by the Corporate Centre and the Chairman.
The Approach
We worked as a joint team with Corum consultants and senior staff from Group Finance, led by the Group President. Phase 1 was a strategy and operational review to assess the viability of the current business plan, punctuated by a series of workshops with the Senior Management Team. This phase identified a significant gap in the forecast EBIT. Phase 2 was a Zero Based Budgeting process to fill the gap with cost and revenue initiatives. In the final phase we reviewed several iterations of the new Business Plan in advance of the Group Board Meeting.
The Outcome
We identified a gap in the business plan and worked with the Division to fill this ( €40m EBIT pa). These initiatives are now embedded into the budget and annual performance targets for Finance to monitor. We helped the Division implement a Rolling Forecast process. The project increased the transparency between the Division and the Group Board. Specific areas of focus were exploiting new manufacturing capacity in China, R&D/new product launches, rebalancing the Division's global footprint between emerging and mature markets. The Division became profitable in the year after the project.
