Case study: Rapid Turnaround of a Financially Distressed Company

  • Our client, a manufacturer of specialist mission critical equipment used by clients such as governments and defence contractors was referred to us by a Top 50 CPA firm.

    They were in financial distress and so sent an SOS. They were exhibiting 5 of the top 10 reasons businesses fail.  

    1. Poor accounting – they did not have accurate cash flow forecasts to deal with the complexities of matters such as planning for long lead times for critical supplies.

    2.Operational mediocrity – their operations were not structured to deliver on revenue targets and so revenue targets or manufacturing backlog targets were not being met.

    3. Operational inefficiencies – Their operations had several inefficiencies for example, customer orders were being provided without a detailed technical review of ability to meet the customer’s specific needs.

    4. Dysfunctional management – The leadership lacked lack of focus, vision and planning and top management made decisions without contribution from middle management.

    5.A declining market. Some of the company’s product lines were legacy lines and so have had declining sales. No recent assessment had been made to determine what the market wanted.

    The shareholders were however humble enough to recognize their need for help and additionally, the company’s shareholders had the cash cushion to support the company, once it was successfully set back on track.

  • A rapid response turnaround was required for this company as it was at risk of failing to meet its long-term commitments to business partners with whom it had been doing business, in some cases for 30+ years.  This solution included the following key steps:
    Step #1: Deep dive sessions with shareholders to understand the challenges    . The company’s shareholders held several deep dive meetings with our team to ensure we could understand the key challenges as they saw them. The outcome of this was a “commanders’ intent” – a summary of the priority areas the shareholders wanted fixed, without giving us detailed instructions on how to execute the turnaround.  We thus “got the keys” to the company – meaning we were mandated by the board of the parent company to do all that was needed to turnaround the company, in line with the intent of the parent company’s key priorities.

    Step #2: New management appointments. Company’s typically fail due to lack of good management and so the company’s shareholders parachuted in IAG team members by appointing Terry Ingram to act as CEO and Dickson as COO to replace the previous top management. Dickson and Terry become part of the day-to-day management, involved in the “business of the business” or “stuck in the weeds” not far removed from daily operations as many advisors often are.

    Step #3. Immediate staff restructuring. Most companies bleed financially due to staff who are not often mission critical being kept on and as staff costs are typically the largest cause of financial distress, the 1st step for Terry and Dickson was to therefore very quickly analyze who of the company’s team was critical and who wasn’t. This staff restructuring however also recognized staff who needed to be promoted and who needed to be empowered, whose salary was below market rate and whose salary was a “fat cat salary” and thus needed to be trimmed.

    Step #4: Strategies for priority areas. Our team then set about to put in place strategies to deal with the most critical areas causing the company’s challenges. This included for example: stopping unnecessary procurement, developing cash flow forecasts that reflected the reality, undertaking a market assessment by speaking to actual customers, engaging with legal counsel to advise us on some of the actions of previous management and setting up cross functional teams so staff could talk to one another.

    1. Within 1 month, a critical customer order of $9.2m which was at risk of being cancelled was saved. This was due to our strategy of promoting a key staff whose talents had been suppressed or overlooked.

    2. Within 2 months we saved the company at least $500k in annual staff costs following the staff restructuring. This defrayed part of our fees.

    3. By the second month we had put in place a robust 6-month cash flow forecast – something which had not been possible previously. Borrowing from the parent company thus stopped!

    4. By the third month, we had empowered the management team to create an inventory forecasting tool – a matter which had taken their consultant months to try to resolve, without success and yet at a cost of $100 per hour!

    5. By the 3rd month, the company’s middle management was starting to make their own decisions and take ownership – where previously there had been a culture of fear and/or apathy and a “they vs us” attitude to top management.

    6. After 4 months, the objectives of the rapid response team were considered complete and we exited.

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Case study: When do you need a fractional CFO?

  • No two companies are alike, even if they are in the same industry. 

    How their owners deal with problems is similarly unique. As a result, every one of our client engagements is highly personalized.

    We resolve the specific issues of each business owner by eliminating barriers that are getting in their way and enabling them to meet their individual goals.

    The client in this case is an Engineering client that is also a distributor in Florida.

  • To assist the client which was having fluctuating cash flows and yet in need of a fractional CFO, Peter Aronstam put together an action plan including the following:

    1. Preliminary Analysis. After meeting with the owner, conducting a no-cost analysis of the business and recommending a plan to address the fundamental issues.

    2. Plan implementation. we meet regularly according to the plan to assess progress and agree upon achievement of specified milestones.

    3. Post plan implementation. This review takes place every 3- 6 months to ensure that the original needs are met and ongoing challenges are addressed.

  • We have maintained this relationship for a number of years and it has continued to evolve into other services we provide to the company in a truly successful partnership where we are the 1st point of contact for any challenges they experience.

Case study: Reshoring the supply chain of a Fortune 100 spin off corporation

  • For decades, the trend in manufacturing has been toward globalization and offshoring.

    However, in recent years, a confluence of factors has been steadily shifting the calculus of where to locate production facilities. Rising labor costs in traditional manufacturing hubs, increasing automation reducing the labor cost advantage, growing concerns about intellectual property protection, and the need for greater supply chain resilience have all contributed to a reevaluation of global manufacturing strategies.

    Our subject is an industrial manufacturing company that was spun off from a global Fortune 100 corporation to a privately held corporation. Even before recent global disruptions, the company's leadership recognized the potential vulnerabilities in its globally distributed production model. The company's broad portfolio ranged from raw materials to finished products for the complete assembly of industrial goods destined for the process industries.

    Despite the conventional wisdom of the time, which still heavily favored offshoring, this company embarked on a journey to repatriate all portions of its manufacturing operations to the United States.

  • The firm's involvement in this case study demonstrates the value of expert advisory services in setting clear strategic direction, establishing achievable goals and objectives, executing comprehensive repatriation strategies, and ensuring long-term success and competitiveness for the client.

    Upon engagement, the advisory firm identified several key challenges facing the client company:

    Lack of Clear Understanding of Global Supply Chain Vulnerabilities

    The company's global supply chain, inherited from the previous corporation, was complex and opaque. This lack of transparency made it difficult to assess risks and vulnerabilities effectively.

    Limited Awareness of U.S.-based Manufacturing Capabilities

    Years of offshoring had led to a knowledge gap regarding domestic manufacturing capabilities. The company needed to rediscover the U.S. manufacturing landscape, which has evolved significantly in recent years. The Manufacturing Institute reports that advanced manufacturing technologies are reshaping the sector, with 87% of manufacturers reporting they have implemented or are implementing Industry 4.0 technologies.

    Need for Competitive Pricing to Ensure Survival

    As a lower middle market company, maintaining competitive pricing was crucial for survival. The challenge was to repatriate manufacturing without significantly increasing costs. This concern is shared by many U.S. manufacturers, with 70% citing reducing costs as a top business priority.

    Complex, Globally Distributed Production Processes

    The company's production processes were spread across multiple countries, making coordination and quality control challenging. This global distribution also made it difficult to respond quickly to market changes or customer demands, a critical factor in today's fast-paced manufacturing environment. At the same time, they were expelling a tremendous amount of cash outlay with the need to buy bulk and then inventory.

  • To address these challenges, the advisory firm developed a comprehensive strategy for repatriating the client's manufacturing operations. This approach was divided into several key stages:

    Comprehensive Cost Analysis

    The advisory firm led a detailed evaluation of both manufacturing processes and the actual cost of goods (Some might call this fully loaded). This analysis went beyond simple production costs to encompass the entire value chain, as well as internal and external touch points (labor) from order inception to final assembly and delivery.

    Total Cost of Ownership (TCO) Analysis

    The advisory firm employed a Total Cost of Ownership (TCO) model to fully understand the costs associated with the client's global manufacturing approach. This model included factors often overlooked in traditional cost analyses, such as transportation and logistics costs, inventory carrying costs, quality control and rework costs, compliance and regulatory costs, intellectual property protection costs, and currency exchange rate risks.

    By adopting this comprehensive approach, the advisory firm helped the client discover that many of its seemingly cost-effective overseas operations were actually more expensive when all factors were considered.

    Process Mapping and Efficiency Analysis

    In parallel with the TCO analysis, the advisory firm conducted a detailed mapping of the client's manufacturing processes. This involved documenting each step in the production process, identifying areas of redundancy or inefficiency, analyzing manpower requirements at each stage, and evaluating equipment utilization and efficiency.

    This process revealed several areas where efficiencies could be gained through repatriation, such as reduced lead times, improved communication between design and production teams, and better alignment of production with customer demands.

    Global Supply Chain Evaluation

    The next stage focused on assessing existing supply chains abroad and identifying potential domestic alternatives.

    Risk Assessment of Overseas Suppliers

    The advisory firm led a comprehensive risk assessment of the client's overseas suppliers, considering factors such as political stability in the supplier's country, economic conditions and trends, regulatory environment and compliance requirements, natural disaster risks, and intellectual property protection laws and enforcement.

    This assessment revealed vulnerabilities that had previously been overlooked, allowing the client to make more informed decisions about its supply chain strategy.

    Identification of Domestic Alternatives

    Simultaneously, the advisory firm began an extensive search for U.S.-based suppliers capable of meeting the client's needs. This process involved attending industry trade shows and networking events, engaging with industry associations and manufacturing alliances, utilizing online databases and supplier networks, and conducting site visits to potential suppliers.

    Through this process, the advisory firm helped the client discover a robust network of domestic suppliers with capabilities that matched or exceeded those of their overseas counterparts.

    Domestic Vendor Assessment

    With a clear understanding of the company's needs and the potential domestic supply landscape, the advisory firm led a comprehensive assessment of U.S.-based vendors. This phase was crucial in identifying partners capable of supporting the repatriation initiative. The assessment covered several key areas, including engineering capabilities, manufacturing equipment, quality control systems, and financial stability.

    By evaluating the technical expertise and innovation potential of potential partners, assessing the modernity and efficiency of production facilities, reviewing quality management processes and certifications, and analyzing the financial health and growth potential of prospective partners, the advisory firm ensured that the client company would partner with vendors capable of meeting both current needs and future growth expectations.

    Channel Partner Evaluation

    The final stage of the strategic approach involved evaluating potential channel partners within the United States. The advisory firm recognized that building a robust domestic supply chain was critical to the success of the repatriation effort. This evaluation process included assessing partner alignment with the client's growth objectives, evaluating partners' understanding of industry-specific compliance requirements, gauging partners' ability to meet production volume and quality standards, and assessing partners' willingness to engage in collaborative, long-term relationships.

    Overall outcome

    The repatriation initiative, guided by the advisory firm, yielded significant positive outcomes for the client company. These included the establishment of a resilient, domestic supply chain, improved control over production processes and quality, enhanced responsiveness to market demands, significant contribution to local economies through job creation, and a strengthened brand image through genuine "Made in USA" production. Most importantly, the client achieved its repatriation goals without sacrificing competitiveness, consistently meeting revenue and profitability targets in the years following the initiative.

Case study: Succession planning for a family business in crisis

  • When the Lighthouse Dims: Navigating Business Continuity in the Face of Patriarchal Crisis

    In the realm of family-owned businesses, the sudden illness of a patriarch can send shockwaves through the entire organization, affecting not just the family but also employees, customers, and the broader business ecosystem.

    This case study examines one such case where Ingram Advisory Group (IAG) was called upon to navigate a 4 decades old transportation company through the turbulent waters of an unexpected leadership crisis.

    The diagnosis of a terminal illness in the family patriarch and business leader created a complex web of challenges:

    - Emotional turmoil within the family

    - Uncertainty and anxiety among long-time employees

    - Concern from customers with decades-long relationships

    - Operational disruptions across the business

    The situation demanded an immediate and sensitive response, balancing the personal tragedy with the pressing needs of the business.

  • The Underlying Current of Uncertainty

    Despite acknowledging the terminal illness and having some time for preparation, the company faced persistent challenges:

    - Overwhelming disruption to normal business operations

    - The looming unknown of when the loss of life would occur

    - Constantly shifting family dynamics in which a dedicated spouse was committed to holding the ship together at all cost out of love and respect 

    - Struggle to balance respect for the patriarch with pressing business needs

    This ongoing uncertainty created an undercurrent of stress that permeated all aspects of the organization.

    Ingram Advisory Group's Approach

    Upon receiving an urgent SOS from a partner CFO firm, Ingram Advisory Group CEO sprang into action with a carefully crafted approach:

    1. Rapid internal mobilization to discuss the best strategy

    2. Identification of critical roles for support and respect

    3. Committed to balancing honesty about future realities with compassion for affected individuals

    4. Personally meet with patriarch and his spouse within days

    Key Principles of IAG's Intervention:

    - Active listening to all parties involved

    - Unwavering respect for the patriarch's wishes

    - Commitment to fulfilling the patriarch's vision where possible

    - Maintaining objectivity by staying clear of surrounding "noise" and conflicting objectives

    - Providing comfort and support to the spouse 

    Challenges Faced

     Internal Disruption

    - Office in disarray, with routine processes disrupted

    - Long-time employees facing uncertainty about their roles and the company's future

    - Leadership vacuum creating decision-making paralysis

    External Communication

    - Determining the appropriate timing and method for informing long-standing customers

    - Maintaining operational continuity and service quality for clients

    - Preserving client confidence during the transition period

    Family Dynamics

    - Supporting the owner's wife as she stepped into an familiar leadership role but was always respected the one leader principle 

    - Facilitating difficult conversations about the future of the business

    - Navigating conflicting objectives and emotions among the spouses 

    - Balancing respect for the patriarch's legacy with necessary business changes

    Strategic Interventions

    1. Financial Evaluation: 

       - Brought an IAG expert to conduct a comprehensive assessment of the company's financial situation

       - Identifying areas of financial strength and vulnerability working with Fractional CFO firm

       - Developing strategies for short-term stability and long-term growth

    2. Organizational Analysis: 

       - Evaluating existing workflow and structures within the organization

       - Identifying key personnel and their roles in maintaining business continuity

       - Recommending structural changes to enhance efficiency and adaptability

    3. Asset Assessment: 

       - Conducting a thorough inventory of both tangible and intangible assets

       - Evaluating the strategic importance of each asset

       - Identifying underutilized resources that could propel the company forward

    4. Communication Strategy: 

       - Developing a tiered communication plan for different stakeholders

       - Crafting messages that balance transparency with sensitivity

       - Establishing clear channels for ongoing updates and feedback

    5. Family Support: 

       - Facilitating open discussions to helping align business objectives

       - Providing emotional support and guidance during the transition

     - IAG CEO made himself available 24/7 

  • The Lighthouse Analogy

    The owner of a business can be likened to a lighthouse:

    - Provides crucial navigational guidance for the entire organization

    - When dimming (rather than suddenly extinguished), leads to prolonged uncertainty and anxiety

    - Creates a sense of being in "uncharted waters" for the team, even as preparations are made

    - Highlights the need for new navigational tools and skills within the organization

    This analogy served as a powerful metaphor throughout the intervention, helping stakeholders understand the gravity of the situation and the importance of adapting to new realities.

    Lessons Learned

    1. Preparedness is Key: Businesses need robust contingency plans for unexpected leadership crises.

    2. Succession Planning: Critical conversations about the future should be an ongoing process, not based on age or health.

    3. Financial Stability: A strong financial foundation can provide a buffer during times of crisis.

    4. Emotional Intelligence: Balancing business needs with personal and family emotions is crucial for effective crisis management.

    5. Flexibility: The ability to adapt to constantly changing circumstances is vital for organizational resilience.

    6. Communication: Clear, consistent, and compassionate communication is essential in maintaining stakeholder trust.

    7. External Expertise: Objective, experienced guidance can be invaluable in navigating complex emotional and business challenges.

    Outcome

    Through the strategic interventions of Ingram Advisory Group:

    - The company achieved financial stabilization despite ongoing uncertainty

    - Appropriate funding was secured to ensure operational continuity

    - A leadership transition plan was presented to respecting the patriarch's wishes

    - The family business was positioned to navigate the challenging times ahead with a clear roadmap fully understanding it was fluid

    - Comfort and support were provided to the spouse throughout the process

    - Customer relationships were maintained through transparent and thoughtful communication

    - A new organizational structure was established to distribute leadership responsibilities

    This case study underscores the critical importance of proactive planning and expert guidance in times of unexpected crises, particularly in family-owned businesses. It demonstrates how a well-executed strategy, coupled with emotional intelligence and flexibility, can help a company weather even the most personal and profound of leadership transitions. 

    The ability to respect personal wishes while ensuring business continuity is a delicate balance that requires expertise, empathy, and unwavering focus on both short-term stability and long-term success. As businesses continue to face unpredictable challenges, the lessons learned from this case provide valuable insights into crisis management, succession planning, and the human side of business continuity.

    In the end, while the lighthouse may dim, with proper guidance and preparation, the ships can still find their way to safe harbor.

Case study: Strategic transformation of a middle market engineering company

  • Our subject is a middle-market engineering and field service organization that provides critical support to global manufacturing firms. Their services encompass engineering solutions, on-site technical support, and innovative product development tailored to the manufacturing sector.

    Despite possessing a wealth of technical knowledge and hands-on expertise within its ranks, the company found itself adrift, lacking a clear vision and direction to guide its operations and growth. This misalignment between capability and strategy had led to stagnation in market performance despite the company's significant potential in the thriving manufacturing industry.

  • In the complex ecosystem of global manufacturing, engineering, and field service organizations play a pivotal role in ensuring the efficiency, reliability, and innovation of production processes.

    This case study examines how a strategic intervention catalyzed transformative change for a middle-market engineering and field service company serving the manufacturing industry.

    By delving into the journey of this organization, we illustrate how addressing core issues and realigning strategies can lead to substantial improvements in performance and market standing within this specialized sector.

    Initial Assessment

    The engagement began with a comprehensive evaluation of the company's current state, both internally and in relation to its market position in providing engineering and field services to the manufacturing industry. This assessment was crucial in identifying the root causes of the company's challenges and forming the basis for strategic intervention.

    Upon initial review, it became evident that the company was suffering from a severe case of misaligned perception. The market's view of the company's capabilities in engineering and field services for manufacturing was surprisingly shallow, contrasting sharply with the deep well of competencies that actually existed within the organization. This disconnect between perception and reality was identified as a key factor inhibiting the company's growth and market performance.

    A critical issue uncovered during the assessment was a fundamental lack of understanding regarding capital readiness and its paramount importance. This oversight had severe repercussions that extended far beyond the company itself. The failure to prioritize capital readiness from the outset of projects and engagements had created a cascading effect of inefficiencies and delays, placing an enormous burden on the entire supply chain, from the company's immediate partners all the way to end users in the manufacturing sector.

    This lack of attention to capital readiness manifested in delayed project timelines, increased costs, strained relationships with supply chain partners, and decreased satisfaction among end users who experienced interruptions in their manufacturing processes. The ripple effects of this oversight were significant, impacting not only the company's operational efficiency but also its reputation within the industry.

    Further investigation revealed that the company's struggles were largely self-inflicted. Despite high market demand for its engineering and field services in the manufacturing sector, the organization had failed to capitalize on opportunities due to internal inefficiencies, lack of strategic direction, and the aforementioned capital readiness issues. This realization was pivotal, as it indicated that with proper restructuring and strategic realignment, the company had significant potential for improvement in serving the manufacturing industry.

    The assessment phase also included a thorough evaluation of the existing personnel within the organization. This process uncovered a surprising depth of business acumen, technical competency, and practical field experience distributed throughout the global organization. The presence of this untapped potential further reinforced the notion that the company's struggles were not due to a lack of capability but rather a failure to properly leverage and direct its internal resources, particularly in addressing critical aspects like capital readiness.

    Strategic Intervention

    Armed with insights from the initial assessment, including the critical issue of capital readiness, the next phase focused on developing and implementing a comprehensive action plan tailored to the engineering and field service needs of the manufacturing industry. The primary objectives were to reset the global strategy, realign the company's market approach, and optimize its operational structure for delivering high-value engineering and on-site services to manufacturing clients, with a newfound emphasis on ensuring capital readiness from day one of any engagement.

    The action plan was designed to quickly accelerate and realign the market strategy within the manufacturing sector. This involved a careful reevaluation of the company's go-to-market approach, with a focus on highlighting its true strengths in both engineering solutions and field services, now underpinned by a demonstrated commitment to capital readiness. By doing so, the company could begin to bridge the gap between its market perception and its actual capabilities in supporting global manufacturing operations.

    A vital component of the new strategy was the implementation of robust capital readiness protocols. This involved developing comprehensive assessment tools, creating a dedicated oversight team, implementing new resource management systems, establishing closer communication with supply chain partners, and integrating capital readiness considerations into the sales process.

    Implementation of the action plan involved a delicate balance of restructuring and operational continuity. While significant changes were being made to the company's strategic direction and internal processes, it was crucial to maintain and even enhance the day-to-day delivery of engineering and field services to manufacturing clients. This dual focus allowed the company to improve its performance in the short term while laying the groundwork for long-term success in the industry.

    The intervention also included a reallocation of resources and a focus on the company's core strengths in both engineering and field services for manufacturing, with capital readiness now positioned as a critical differentiator. Simultaneously, areas of weakness were addressed through targeted improvements and, where appropriate, strategic partnerships or outsourcing specific to the manufacturing sector.

  • The strategic intervention yielded significant positive outcomes across multiple facets of the business. The company experienced a marked improvement in its ability to provide comprehensive engineering solutions, responsive field service support, and innovative product development tailored to manufacturing clients.

    These enhancements were not limited to a regional scale but expanded the company's capabilities to a global level within the industry.

    Key improvements included drastically reduced project delays and cost overruns due to improved capital readiness, strengthened relationships with supply chain partners, increased satisfaction among end users, and an enhanced reputation within the industry as a reliable and forward-thinking service provider.

    This newfound global reach and improved operational efficiency allowed the company to extend and deepen its relationships with Fortune 500 manufacturing companies, opening up new avenues for growth and collaboration. The ability to operate on a global scale not only increased the company's market share but also improved its resilience to regional market fluctuations in the manufacturing sector.

    Operationally, the company made significant strides in addressing key challenges facing both engineering and field service providers in the manufacturing industry. Employee retention saw improvements through targeted HR initiatives and a renewed sense of company direction. The company's engineering prowess and field service efficiency were enhanced through focused training and development programs, ensuring that it remained at the cutting edge of industry innovations and best practices.

    Equally significant were the improvements made in the company's understanding and implementation of processes and controls specific to engineering and field services in manufacturing, with a strong emphasis on capital readiness. These enhancements led to increased efficiency, reduced errors, and improved overall quality of service delivery. Additionally, the financial burdens that had been weighing on the company, although still not stabilized from past sins, began stabilizing through a combination of improved operational efficiency and strategic financial management tailored to the unique challenges of serving the manufacturing industry.

    Conclusion

    The strategic turnaround detailed in this case study demonstrates the potential for middle-market companies providing engineering and field services to the manufacturing industry to overcome internal challenges and leverage their core strengths to achieve significant growth and market success. By addressing the disconnect between market perception and actual capabilities, realigning strategic focus, and optimizing internal resources—with a particular emphasis on capital readiness—the company was able to transform its market position rapidly and effectively within the manufacturing services sector.

    Key achievements of this turnaround included regained market share, improved market visibility, and the establishment of partnerships with global entities in the manufacturing sector. These outcomes not only reversed the company's declining trajectory but positioned it for sustained growth and success in the highly competitive international market for engineering and field services in manufacturing—the last step, as always, is the commitment to capital readiness and the future business trajectory.

    This case study serves as a compelling example of how targeted strategic intervention, coupled with a deep understanding of a company's true capabilities in both engineering and field services, can drive transformative change. It underscores the importance of aligning perception with reality, leveraging internal strengths, and addressing weaknesses head-on—particularly in critical areas like capital readiness—in the pursuit of market leadership in serving the manufacturing industry.