Senior Team Alignment & Strategy Execution: Financial Services
Aligning Executives to Drive Development and Strategy at a Financial Services Firm
Client Case Study
Situation
This global real estate and financial services company with over $1B in annual revenues was formed by a merger of a North American firm and a European/Asian-focused firm. The North American part of the firm had grown rapidly in the via five strategic acquisitions and went public.
The firm needed to improve its organic growth rate and operating systems to compete.
Complications
- Integration: When we began working with the North American division, it was struggling to integrate its new businesses and capitalize on cross-business growth opportunities.
- Silos: Senior leaders and their organizations operated almost wholly independently which inhibited customer success.
Approach
The COO of the North American division recognized that major changes were necessary in the organization. He engaged us to gain alignment at the Senior Team level with the conviction that the rest of the organization could not get aligned and work effectively together until the senior leaders did the same.
During the company’s Senior Team Alignment Process, we helped the Senior Team become a more unified group, by:
- Creating clear norms and values
- Developing a consistent strategic view of the business and its future using a Strategic Business Framework to gain strategic alignment.
- Examining what stood in the way of achieving the objectives described on the Framework.
After identifying the six most compelling challenges, the Senior Team selected a group of 48 high-performance, high-potential leaders in the business to study the issues and develop solutions. Working with us, the company then launched a custom Performance Leadership program to provide the cross-functional project teams with a structure and process to facilitate the successful completion of the project work
- The teams worked for 100 days on their projects, aided by the support of a Senior Team sponsor and a coach.
- Check-ins along the way ensured consistent feedback from members of the Senior Team as well as the other project teams.
- The Performance Leadership programs concluded with each team proposing final recommendations and clear implementation plans to the Senior Team, followed by real-time yes/no decisions on each recommendation.
During the Performance Leadership program, each project team member had the opportunity to work on his/her leadership behaviors, receiving coaching and feedback from his sponsor, coach and other teammates. Each team member also had the chance to try new roles and learn about other parts of the business, in effect joining the Senior Team in the strategic decision-making process. And, of course, the projects themselves yielded tangible, bottom-line results for the company.
Results
- $30m NPV: The “Corporate Solutions” team’s recommendations yielded the greatest results. All the business lines have increased their focus on prospective multi-service companies. One large client opportunity was a direct result of this focus. On an NPV basis, this win by itself was worth $30 million to the firm. In the first year, three additional assignments were won as a result of this project, generating $5 million in revenue and $1.5 million in profit in the first 12 months.
- Decreased Average DSO by 25%: Based on the recommendations of the “Economic Profit” team, the company instituted strict rules relative to receivables. Within six months, the company’s receivables were reduced from 72 average days sales outstanding to 54 – resulting in reduced borrowing costs and interest savings of $700,000 annually. In addition, the company restructured contracts in order to receive reimbursed payroll up-front, saving the carrying charge that they had incurred in the past. For one large client alone, the company saved $200,000 annually in working capital costs.
- Increased Profitability: The “Client Profitability” team’s recommendations focused on improving the profitability of clients. Key outcomes from this project included a new fee structure for low profit accounts and a re-prioritization of support for high profit accounts. These changes have resulted in increased client profitability and new business.
- Fortune’s 100 Best Companies to Work For: The “Attract and Retain” team recommended changes that promise to increase employee satisfaction scores and reduce voluntary turnover over the next three years. The company saw improvements in both areas in the first 12 months of implementation. Via the team’s efforts, and after several years of sustained work on the initiative, the company also achieved its long-term objective: earning a spot in Fortune’s 100 Best Companies to Work For.
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