CASE STUDY: A Big Fat Turnaround
In 2001, a large Real Estate Tax Services company (RETS) was in trouble. Though they had made improvement from the prior year, it was not enough. During the largest refinance boom in history, their performance was underwhelming. RETS was saddled with low productivity, poor quality and increasing customer dissatisfaction. the IBIT sat at $10m – signaling unacceptable under-performance. Error rates ran as high as 40%. In addition to ongoing frustration, these problems drove customer costs up, leading to defections. Two clients bolted – taking with them one third of RETS revenue. The remaining clients registered satisfaction rating of 2 on a scale of 5 (5=excellent). Employees at every level felt the deepening pain. It was not fun at work any longer. A new leader was brought in to invigorate and give the anemic business a much needed transfusion.
The new president asked us to help with a framework and a process to engage every employee in the task at hand – to help develop ways for everyone to work smarter, not harder. Here was the plan:
- Retained consultant for a turnaround coach, process guide and thought partner
- Assess the leadership team skills, focus alignment and team work
- Develop a common vision to rally around
- Provide a process and the skills for people to solve their own problems
- Provide an avenue to contribute to solutions across functional lines
- Monitor progress and results
- Keep the focus and raise the bar
We worked with the President and his team to define the common strategy, clarify the organization’s focus and create a living code of conduct. We introduced “workouts” as the engine for change – solving the business’ most complex problems. We introduced new skills for leaders – like facilitative leadership. We honed decision, communication and problem solving skills. We coached the effective use of Six Sigma. We shepherded the executive team through the pitfalls inherent in drastic change and helped design their meetings and events to continually reinforce the business strategy and the means of achieving it. We were confidants and personal coaches. We were on call as change experts, thought partners and friends.
- $10 million IBIT balloons in 18 months to $80 million and $100 million in 2 years
- Cost of penalties (due to poor quality) shrinks from $55 million to #11 million
- Open items (leftover problems) were reduced y 95%
- Customer Satisfaction soars from 2.2 to 4.9%
- In the Real Estate Tax business – people typically spend the holidays fixing year-end reporting and open items problems. Since these problems were prevented, employees and their customers took holiday vacations for the first time in their careers.
- Every employee felt they had been part of something special. The sense of purpose and teamwork was palpable.
- The business was sold for a premium