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THE CHALLENGE
Our client, a $500MM division of a Carlyle Group Portfolio company believed opportunity existed to improve margin performance by 4-7% by reducing overlap and redundancy in it’s internal organization. However, the client was unsure whether that opportunity was real, how to unravel it or whether it’s internal teams possessed the skill set and experience to capture the gains.
THE SOLUTION
Tower Strategy Group worked with the senior leadership team and concurrent to an IT implementation by PwC to:
- Identify sources of commercial and back office inefficiency and ineffectiveness across processes, systems and structure
- Pinpointed specific improvement opportunities that could drive a substantially improved cost structure going forward
- Valued the resulting operational improvement opportunities to winnow the long-list of potential “fixes” down to the most meaningful and impactful ones
- Structured a 2-year Crawl-Walk-Run plan to deliver on that change not only in terms of structure and process but also culture
- Worked arm-in-arm with the client’s EVP of Operational Effectiveness to deliver that change through an employee-led transformation
- Build tools and materials, on a custom basis, to manage the client’s organization through that change (including supporting all change management programs)
- Leaned in on special projects that the client’s team could not tackle due to lack of capacity or an inability to remain objective (e.g., transformation of legacy fiefdoms into a more streamlined, efficient and growth-ready organizational structure)
- Reorganized client personnel into new structure
- Put the revenue and cost management systems in place to 1) quantify the results on transformation and 2) create the governance and accountability system to remove cost from the organization
Impact
The client created a 9% increase in operating margin on the back of a much more streamlined and fluid organizational structure. One that reduced costs in bloated commercial and back office functions while also putting the bones in place to scale current efficient ones more slowly than revenue going forward (i.e., driving towards productivity gains). Supported by a new set of processes and tools to tie that organization together, enabling better resource flow and management based on the revenue cycle. And the fact-base and dashboards in place to manage cost structure far more proactively and in real-time moving forward.