Comprehensive Change Program Leads to Successful Sale

TypeExit Planning (and Fresh Pair of Eyes and Strategic Planning)
Quick Facts$15 million revenue professional services firm ("ServiceCo"). Specialty engineering niche with established national presence and reputation. East/west coast locations. Privately held by three shareholders.
ChallengesServiceCo had an ownership group that was mentally ready to sell the company. However, before that could happen, the shareholders agreed that a number of issues had to be fixed. The challenges included:
  • growing conflict over exit strategies among shareholders
  • employees questioning long term focus
  • accountability lacking in annual plans
  • skill gaps in management team
  • factions within company
  • business model increasingly ‘fuzzy’
  • large ‘commodity like’ projects in one business segment
  • low productivity, low billable hours
  • high overhead
  • weak project management control systems
ApproachThere was no ‘ quick fix’ to get the company ready for an exit event. McHugh & Company completed two engagements with the leadership team. The first was a comprehensive ‘fresh eyes’ business review, the second was a strategic/operational planning project. During both of these projects we helped management sort through a number of critical personnel decisions.
ResolutionOver time the company became more focused, leaner, profitable and harmonious. The major change activities included:
  • fixing the business model by concentrating on high growth, high margin segments; flushing out small clients and small projects
  • investing in new information systems
  • reducing overhead staff
  • hiring 3 new senior team members
  • overhauling roles and responsibilities of middle management group
  • increasing billing rates where possible
  • increasing staff utilization rates

Once the company regained and maintained profit momentum, it was sold to a strategic buyer.

Links to the other exit planning cases:

  1. Establishing Focus in a Family Business

To view a list of all McHugh & Company Case Studies, click here.