The Downturn of a Major Firm
“Every Dollar Is Not A Good Dollar.”
It’s safe to say that every dollar is not exactly guaranteed to be a good dollar. With this particular client, they were a major firm experiencing a significant economic downturn for the first time. However, their revenue streams were not exactly grounded or quite deep enough before the downturn, but they still should have had the chance to avoid this major downturn before it was too late.
Our task was to identify exactly how this happened and how they could navigate themselves out of the deep hole that they were burying themselves in. At one point, the performance was high, and revenue was strong – however, this was exactly why no one chose to look at the adequacy of their profits, especially in terms of where this high level of revenue was coming from.
Because of this negligence, gross revenue increased by the headcount and less and less consideration was paid to the affordability of that extra revenue. This ultimately created a bubble that eventually popped.
Our job was to bring this client back down to Earth. Sure, they saw tremendous gains in recent years, but now they’re in a hole. The first thing to do when you’re stuck in a hole is to keep your expectations realistic. We worked with leadership to insist on realism in nearly everything that they do moving forward to help ensure a stable revenue flow.
Next, we needed to instil the understanding that reactions are not always better than actions. In other words, the organisation was making changes directly as a result of the economic downturn, which was highly ineffective. We wanted to show them how to look at each business unit within their vision to identify areas where they could perform better as opposed to a more general point of view.
Lastly, we wanted to significantly analyse, model, and identify the key problem areas within their restructuring strategy. One of the ways to do this was to have a clear and agreed-upon definition and hold leaders accountable for their actions, and to convey to them the necessity for an effective operating plan.
Our approach was based on insisting on realism. We wanted leadership to understand the task at hand, to agree on a successful outcome, and to manage their expectations and ensure that realistic goals were set right from the start. Also, we held these leaders higher than ever before in terms of their accountability – it was on them to recognise the risk for economic struggles, and it was now their job to navigate themselves out of this hole.
Through our comprehensive approach, we helped this client increase their profits by 55%, and we increased partner profits by 300%. We helped them to achieve a 50% increase in revenue in just three short years after emerging from this period of economic downturn.
We did this by:
- providing one possible direction and setting the focus on one desired and agreed upon outcome,
- providing strong support for the leadership group,
- fostering more effective communication and collaboration,
- recruiting high-end talent capable of following through,
- communicating our messaging clearly, and
- making a difference in the organisational culture.
Furthermore, by providing leaders with effective business development strategies, we helped to add profitable growth for the organisation moving forward.