CASE STUDY

GLOBAL PROVIDER OF CLOUD-BASED INFRASTRUCTURE SOLUTIONS

COMPANY REORGANIZATION, PRODUCT DEVELOPMENT PLAN, AND PREPARATION FOR EXIT

The Situation

This SaaS company located in New York and London provided hosted business intelligence solutions to the hedge fund community. The founder and CEO was contending with three primary issues: first, the company had focused too much on delivering legacy platform services and had therefore missed an opportunity to launch a “next-gen” platform that was the new competitive standard. Second, board sponsorship was fragmented, and the CEO was having trouble getting the board to agree on the funding strategy needed for the new buildout. Third, the management team was not aligned on how to best execute the reorganization. A cross-functional team was required to support the new build, while protecting the existing revenue streams.

ENGAGEMENT

 

OBJECTIVES

Explore and plan for potential scenarios: incremental investment, merger, sale, and CEO exit. Define an executable plan to achieve break-even within 6 months.

Provide guidance for all board communications from the management team. Develop a prioritized plan to support the buildout of the new business intelligence platform.

APPROACH

We facilitated an iterative series of exploratory interviews with external legal counsel and across the management team to verify the status of the current situation.

Individual sessions transitioned into larger group working sessions to develop a cross-functional understanding of the organizational friction. Our findings produced a prioritized plan that we helped the CEO and team execute.

OBSERVATIONS

  • Stakeholder objectives at the board level were misaligned, making it difficult to arrive at a consensus on strategy.

  • Blocking rights held by investors and sponsors, and agreed to by the CEO, inhibited the flexibility the management team needed to explore an independent go-forward strategy.

  • Management had lost credibility with the board.

  • There was little to no consensus among the senior leadership on the merits of the company’s new product vision.

  • Client feasibility analysis revealed that certain of the company’s clients, while “strategic,” were not financially viable.

  • Staffing levels had not been actively managed relative to vital skill set needs, client demands, future product strategy, and economic reality.

  • There was growing perception among the management team that the CEO was biased regarding key strategy and execution decisions.

  • The private equity sponsor wanted to pursue a roll-up strategy with other portfolio assets.

ACTIONS TAKEN

  • We engaged the company’s legal counsel to fully understand the nature of the blocking rights held by investors and private equity sponsors.

  • That knowledge informed effective communication with the board and allowed us to manage the board accordingly, to alignment.

  • Contracts with non-profitable clients were either renegotiated or canceled.

  • We interviewed and motivated the management team. Through reorganization and a reduction in force, we resolved both the organizational discord in the product strategy group, and the geographical staff imbalances.

  • We prepared a revised operational plan to reset expectations with key investor stakeholders.

  • And we planned a targeted reduction in force across all global markets, and executed that plan once it was endorsed by the board.

OUTCOME

  • The company achieved break-even within 90 days of our arrival.

  • Discord between investors and the board was resolved.

  • The paralysis that had been inhibiting forward progress on the agenda was cleared.

  • Negotiations resumed with the primary private equity sponsor who ultimately decided to purchase the remainder of the company and combine it with other portfolio assets.

  • We helped the CEO negotiate an 18-month exit package and buyout.