Rebuilding Confidence

Shortly after a private equity firm got involved, I was called in to analyze their company's stake in a transportation company. The target company was being directed by the second generation of the founder, but had stumbled badly and required a capital infusion.

The foreign manufacturer had recently opened a new manufacturing facility in the U.S., but had lost one of its major customers to a competitor. Revenues had dropped to less than 50 percent of their peak. Several key sales people had also left the company for greener pastures, leaving a void that was being filled by employees from other departments. The hole seemed to be getting deeper.

After visiting both the U.S. location and the headquarters, and meeting with the executive management and the employees, it appeared that the fifty year-old company had failed to address changing market conditions. Additionally, it was still operating with paper, pencil and typewriters for internal and external communications and record-keeping. Their new facility required a few changes to streamline their assembly line, and the installation of a mid-range computer system with enterprise software eliminated the previously mentioned problems and helped to increase productivity. Extensive training on the new system, along with workflow changes, took months to complete, but the ROI was quick. Experienced sales reps were recruited and trained, and equipped with state-of-the-art technology, allowing them to access real-time information and quickly respond to RFPs and customer inquiries.

I personally visited with their major customers, and took several key executives along. We also invited the customers to the new manufacturing facility, and impressed them with the ISO application process. After one year, we recaptured the major customer that had been lost, while simultaneously expanding the customer base. Revenues soared above the previous high. As the interim COO, I was retained for a total of 24 months. Eventually, the private equity firm sold their stake to another group, and at a very nice return.

DE