A handheld computer and optical scanning equipment company was losing revenue and falling behind the competition, which had leapfrogged its lead product line. It had also recently lost a contract for a second product line that leadership had hoped would be the foundation for the future. Complicating matters, two headquarters on opposite sides of the country were in charge of different product lines.
The CEO, now a E78 partner, initiated a strategic planning process. First, he interviewed all 1,500 employees, in small groups, to solicit ideas on the challenges and opportunities facing the company. From these interviews, he constructed a straw man to use as a catalyst in the strategic process.
He assembled a team of direct reports and key contributors from throughout the company and presented them with the straw man as a base. From there they refined the situation analysis, strategic options, gaps, strategic objectives, and action plans. Once a basic plan was together, the team held strategic sessions with the broader management team and with the Board of Directors. After soliciting input from all these groups, the team developed a final strategic plan.
The plan included eight to ten objectives the company needed to meet to bring it back to profitability. These included rebuilding the product line, closing down one headquarters and consolidating operations at the other headquarters. The company also sold off several divisions that were no longer strategic.
- The core people in the company were aligned with the plan due to the participative process
- The company, which had dropped from $225 million in revenue to $140 million, returned to $175 million in revenue
- The company recaptured brand and market leadership, and improved EBITDA from a loss of $16 million to profit of $20 million annually
- The company was eventually sold to a private equity firm