Winner, Corporate Livewire 2015 Global Awards
“The Corporate LiveWire Awards represent the pinnacle of business achievement, championing the best in their respective fields. The awards cover the most important sectors of business, from finance advisories and funding providers to law firms and specialist advisory companies that deal with mergers and acquisitions. The culmination of the awards is the Global Award, recognizing businesses and professionals of every type that have proven their excellence throughout the year and years past.” — Corporate LiveWire
Past Client Successes
Our work is as diverse as our experience. The brief examples below provide some insight as to how Solon helps make measurable differences.
When Overhead Seems Intractable
It is easy to say that costs will be cut by 10% across the board, but very dangerous – as key functions that seriously impact customers and production can suffer. In a chemical company client beset by an unusually long adverse commodity pricing cycle, management felt they had cut overhead to the bone. Yet, they still faced high debt service and continuing low revenues.
We worked with them to determine what customers were buying, which plant was producing what, and then mapped what needed to be produced where. We could then develop an “ideal overhead model” to clarify exactly what each plant needed to support its productivity and serve customers, employees, and shareholder interests as well.
We helped the company reduce overhead from $30 million to $18 million per annum, while functioning more smoothly than ever. This client was then uniquely positioned to withstand the increasingly unpredictable cycles typical of its industry and markets.
Emergency Response Stabilizes Fragile Service Company
During a routine meeting with a company that had acquired a number of companies rapidly, we discovered that corporate results did not correspond to the numbers posted by the operating units, cash was dwindling, and their insurance provider had served notice of non renewal. No centralized system was in place for communicating with the many operating units, nor for reaching their newly expanded fleet and staff of over 3,000 trucks and drivers.
In a few short weeks, we worked with management and its lenders to arrange emergency solutions to these challenges – any one of which could have fatally crippled operations. On Christmas Day, the need for a bankruptcy strategy became clear, protecting the company while enabling financing and the renewal of its mission-critical insurance. Two days later, this strategy and a communications system were implemented – fully preparing every trucker, fuel and service provider, communications personnel, and all other employees and vendors for the bankruptcy filing. Operations continued without a single hitch, as we identified and put in place a new company leader – and continued working on reconciling the numbers, while creating and transitioning to a seamless financial reporting system.
The company emerged from bankruptcy intact – possibly the only trucking company ever to do so.
Realigning Corporate Structure
One company we worked with had 52 profit centers, for which it brought the numbers together manually – making it very difficult to see patterns and/or relationships in the monthly results. Too much data, yet no meaningful information.With cash flow eroding and covenants being violated, company lenders brought in an accounting firm that declared the company’s system unworkable. As default was declared, time was running out, and the lenders pressed for rapid asset sales or liquidation.
Called in at a moment’s notice, our team analyzed the business units and determined that the system was workable if data entry was made consistent. We realized that the company was analyzing its results by line of business, rather than by geographic market segments – and thus was blind to an array of valuable synergies and connections. Once we rearranged the data by geographic market segments, the client began to see their data differently.
Orphan assets were immediately sold, operations streamlined, and the Company’s debt substantially reduced. Earnings grew, and the company moved forward with renewed confidence.
Untangling Issues In A Large, Family-run Business
With two cousins acting as Co-CEOs, 9 sons and sons-in-law in next level management positions, and almost 100 family members among the 2,500 company employees, a company’s management structure became its own worst enemy. The cousins, comfortable partners for over 40 years, found discussing succession difficult. Company performance was sliding, however, and lenders were contemplating harsh action, perhaps even liquidation of this venerable company.
Success came from our creation of a neutral environment for both evaluation and discussion, and from balancing the future opportunities of the 8 possible successors who were not chosen – as well as the perceived status of each branch of the family. Mentoring for those who had not yet fully grown into their new roles was also provided, restoring balance and harmony.
Today, the company is going strong – in the capable hands of its second generation of family ownership and management.
Growing Jobs as Strategic Advisor To A Rural Economic Development Initiative
When county supervisors made funding available to create an economic development initiative, Solon acted as its de facto director in a diverse array of capacities: strategically reviewing the County’s strengths and weaknesses; organizing multiple town meetings to bring the community into the process; helping to identify target industries to recruit, and overseeing the creation of a prize winning economic development website – all to support a three part job growth strategy based on supporting existing employers, helping entrepreneurs build their businesses, and recruiting new industry.
We developed a coalition of community leaders to support the building of the state’s first economic gardening program – a strategy for providing entrepreneurs support and training as a job growth strategy. Then, we managed the recruiting process to install the County’s first professional economic development director, who was recently recognized as the foremost new economic development executive in the U.S. by the IEDC.
Jobs are now growing at a rate above pre-recession levels, while new business growth and business expansion are setting new, regional benchmarks.
The Importance of Effecting Change From Within
The lenders of a waste management company became concerned about declining cash flow, imagining trucks carting away and dumping cash in the middle of the night. Ready to withhold further funding, they insisted the company bring in an independent party to find out what was going on, and whether the business could be saved.
Our three-member operations, finance, and controller team spent 10 days reviewing various aspects, then met with management to give informal feedback. Impatient, management asked for our plan, eager to get whatever we had to say over and done with, so that they could get on with it. We responded with this question: “Do you agree that these areas need attention?” If not, we would leave our report with management at no further cost. “If, however, you agree, we need you to identify teams from across the company to focus on each area.” We would then coach these company teams toward reviewing the issues, opportunities, risks and recommended actions in each of their respective areas. Still unhappy, management nonetheless acquiesced. The company offices were turned into war rooms and the buzz was non-stop.
Within 5 weeks of our arrival (initially resented by all, and considered a nuisance) a thorough plan of action was understood, supported, and implemented rapidly and harmoniously – by everyone in this 2500 employee company, at every level. Within 3 months of our arrival, all but one of 97 subcontractors had signed risk-sharing agreements… non-core assets had been sold… a capital expenditures budget had been created… a data center had been populated to support analysis and quick decision making… and the company had refocused on its areas of market prowess and/or dominance.
Six months after our arrival, the company was prepared to refinance its debt. The lending syndicate was oversubscribed and the company was able to lower its annual cost of borrowing by $7 million on a $100 million facility. From management’s point of view, the creation of the plan was done internally – increasing their self-confidence. Best of all, it was as if we were never there.