Transcript MWK STAR STORIES - michael

Mike Kuryla STAR Stories
(Situation, Task, Action, Response)
1978-1995 Ryder System
2003-2005 Budget Truck Rental
1.
2.
3.
4.
5.
6.
7.
8.
9.
17. Yield Management Strategy
18. Automatic Vehicle Locator System
19. Dealer Locator System
Activity Based Costing (ABC)
Consumer Rental Decision Analysis
Line of Business Valuation
National Urban League Restructuring
Simplified Asset Management (SAM)
Customer Safety Rask Force
Competitive Intelligence
Market Value Pricing
Private Carriage Market Study
1996-1997 New York Life
10. Workplace Life Insurance
1997-2002 Automatic Data Processing
11.
12.
13.
14.
15.
16.
CFO – ADP Canada
Facility Integration Plan
Money Movement I
Annual Price Increase
Money Movement II
Strategic Market Planning
[email protected]
www.linkedin.com/in/mwkuryla/
303-324-7921
2005-2005 Cartasite
20. Initial $1 Million Capital Raise
21. Commercial Vehicle Telematics
2005-2008 UNIFI Capital Management
22. $500 Million LBO Initiative
23. Dignitas Low Income Housing
24. Sage connex Telephony Business
2006-2013 WSI Marketing4theWeb
25. Internet Marketing Franchisee
2011-2013 Strategic Pricing Solutions
26. New Product Pricing for Services
27. Pricing Diagnostic for Manufacturer
1. Activity Based Costing (ABC)
SITUATION
1. Ryder System was aggressively consolidating the North American commercial truck leasing and
rental business and required a reliable acquisition valuation tool
2. Then current vehicle information systems only included average vehicle data
3. Acquisition premiums were often too high because the acquisition candidates’ fleet were typically
older than average
TASK or PROBLEM
1. Development of more accurate vehicle cost estimates was needed to improve acquisition
candidate valuations
2. New models were needed to accurately and quickly turnaround initial acquisition premium
estimates and to support actual price negotiations
3. Traditional IT processes could not be diverted from core business applications
ACTION
1. Used high level language (APL) to develop flexible vehicle level acquisition analysis model to
develop more accurate cash flow-based purchase premiums
2. Developed statistical techniques to derive running cost curves by unit age, type, location, make,
etc.
3. Managed acquisition analysis process to support pre-screening and live deal negotiations
RESULT
1. Deal makers were provided with accurate view of NPV from a set of assets and contracts
2. Ryder System completed consolidation of over 100 truck leasing firms in the 1980s
3. Shareholders were rewarded with a 4x increase in the stock price
Return to Table of Contents
2. Consumer Rental Decision Analysis
SITUATION
1. Revenue growth from Ryder’s trademark yellow Consumer Truck Rental division had stalled
because category leader U-Haul had re-focused on its core business
2. Ryder’s core commercial truck rental business was being cannibalized by its sister Consumer
Truck Rental division and severe internal competition ensued
3. An acceptable solution to this long-standing problem had not been developed
TASK or PROBLEM
1. The Ryder associates from each division felt terrific animosity toward each other
2. Too many Ryder rental trucks were chasing the same customers via different channels
3. Excess assets and sub-optimal pricing was negatively impacting shareholder value
ACTION
1. A project was approved to develop options to resolves these internal conflicts to enable focus
on the market
2. Leveraged Strategic Decision Group consultants to identify and quantify a set of distinct strategic
options to resolve these issues using decision analysis techniques
3. Distinct strategic options were developed and the associated the risk and return quantified for
presentation to senior management
RESULT
1. The decision makers understood the key drivers for the strategic options and the risk and
rewards inherent in each
2. As the conflict inherent in running a consumer and commercial business with overlapping
infrastructure appeared intractable, it was decided to sell Consumer Truck Rental
3. The Consumer Truck Rental division was sold to a competitor for an attractive price and the
commercial truck rental business was able to better focus on its customers
Return to Table of Contents
3. Line of Business Valuation
SITUATION
1. In the 1980s, Ryder System experienced rapid growth driven by consolidating the truck
leasing business with over 100 truck leasing acquisitions
2. To keep up a high growth rate, in the early 1990s Ryder System diversified into aviation
services with the acquisition of four major aviation business
3. The Company’s growth rate, however, stalled and the market punished the stock price
accordingly
TASK or PROBLEM
1. Assess the corporations' strategy and develop strategic options to regain shareholder value
2. Engage senior business line managers in a disciplined strategic planning process
3. Assess the present and projected market value of each business
ACTION
1. Working with Corporate HR, trained the top 200 executives to perform competitive analysis
based on Michael Porters process
2. Created cash flow based valuation models based on each businesses’ key value drivers,
unique cost of capital and five year plan
3. Developed business valuation presentation for CEO to deliver at the annual “Summit
Meeting” with the Board of Directors to review strategic options
RESULT
1. Identified gap between “book” returns (ROA and ROE) and cash flow based valuations to
forecast each business’ impact on the stock price
2. Introduced the concept of Economic Value Added (before it became popular)
3. Ryder System divested its non-core aviation businesses, Auto Carrier Division and
Consumer Truck Rental business to focus on its core commercial businesses
Return to Table of Contents
4. National Urban League Restructuring
SITUATION
1. The National Urban League (NUL) was spending more than 50% more than its resources
2. Existing NUL leadership required assistance to identify and take the take the steps necessary
match spending with revenue
3. The new NUL Chairman, also the CEO of Ryder System, elected to help the organization nonprofit take steps to remain viable
TASK or PROBLEM
1. The NUL CFO was considered not strong enough to manage the situation
2. The NUL NYC headquarters and eight regional offices lacked proper fiscal controls
3. No NUL budgeting process existed
ACTION
1. Ryder executives attended the NYC NUL board meeting and agreed to work with NUL
leadership to work out an ongoing financial management solution
2. Actual spending was analyzed in comparison with funding levels and specific cost reduction
actions were identified
3. CFO candidates were identified, interviewed and a new CFO was hired
RESULT
1. NUL leadership was strengthened
2. Financial controls and budgeting processes were installed and expense cut in line with available
resources
3. The NUL mission was clarified and set up to operate within its means
Return to Table of Contents
5. Simplified Asset Management (SAM)
SITUATION
1. The processes for administering and controlling Ryder’s $250 million annual used truck sales
were inefficient and ineffective
2. The processes for managing Ryder’s 150,000 vehicle fleet were not standardized nor optimized
among its 600 locations
3. Ryder’s core asset management competency had not been invested in
TASK or PROBLEM
1. Identify the benefits and costs associated with alternative options for improving Ryder’s assets
management capability
2. Establish consensus between a wide cross section of stakeholders in the field and at HQ on the
best way to proceed
3. Secure management approval and funding to improve the asset management processes and
execute
ACTION
1. Established the vision for leveraging the information inherent in automating the used truck sales
process with pricing data to support asset management processes
2. Worked with the various stakeholders to achieve common buy-in to automating asset
management processes and training the field associates to follow them
3. Proposed and received approval for a $10 million multi-year project and led the team to set the
requirements, staff the project, develop the systems and train the field users
RESULT
1. The multi-functional team of Ryder employees and consultants developed and implemented
SAM in 600 field locations to begin optimizing asset management practices
2. Field managers for the first time had access to revenue and margin information on a client-server
relational data base cut by customer, location, vehicle, and product line
3. SAM helped Ryder earn a record $80 million 1995 gain on the sale of equipment and was
subsequently re-named Strategic Asset Management
Return to Table of Contents
6. Customer Safety Task Force
SITUATION
1. Ryder efforts to improve safety and workers compensation insurance claims management
practices for internal employees met with great financial success
2. The Company desired to duplicate this success by applying the knowledge gained from
improving internal safety management to customer safety management
3. All divisions ( Highway Transportation and Aviation) were asked to participate and to share
best practices
TASK or PROBLEM
1. Indirect costs and customer value enhancements associated with inadequate customer
safety practices were not clearly identified as safety-related
2. Little communication between the different Ryder businesses on customer safety
3. Customers incurred significant physical and financial damage due to accidents
ACTION
1. Ryder’s chief legal officer was made the Customer Safety Task Force Czar and Fleet
Controller was asked to coordinate with representative from each business
2. A cross business and cross-functional kick-off meeting was held in Miami which identified
many best practices
3. Quarterly updates describing efforts and results by business were instituted to keep the
pressure on an efforts that were inherently difficult to measure and motivate
RESULT
1. Best safety practices were shared and some were implemented
2. Safety initiatives requiring capital spending (decals on school buses or “lights on for
safety”) were deferred due negative impacts on ROI and bonuses
3. After a flurry of activity for two years, the task force was shut down
Return to Table of Contents
7. Competitive Intelligence
SITUATION
1. Beginning in the early 1990s, key Ryder’s competitors began gaining market share
2. Traditional financially-oriented backward-looking competitive intelligence reporting was
infrequently produced and not widely distributed
3. Anecdotal evidence from the business units suggested that the competitive environments were
getting tougher
TASK or PROBLEM
1. Identify options for effectively addressing the gap between what was known and what should
become known about existing and future competitive threats
2. Engage senior staff and line managers in ascertaining the competitive threats
3. Regularly communicate key competitive findings to senior managers to inform decisions
ACTION
1. Identified SCIP (Strategic and Competitive Intelligence Professionals) as the leader in the
skilled use of intelligence to enhance business decision-making.
2. Hired SCIP president as Manager of Competitive Intelligence to staff the function
3. Established regular in-depth monthly review of one key competitor with all officers
RESULT
1. Shifted competitive perspective from retrospective and anecdotal to prospective and fact based
to enable a common in-depth understanding major competitive threats
2. Achieved access to competitive intelligence community and their ethical practices
3. Identified selected acquisition and divestiture targets based on competitive analysis
Return to Table of Contents
8. Market Value Pricing (MVP)
SITUATION
1.
In 1993, the $ 5 billion US heavy truck leasing market had consolidated into four major players
and price competition was increasingly fierce
2.
Ryder had 40% market share but was losing share to an aggressive GE-backed Hertz-Penske
3.
Ryder needed to regain market share momentum while maintaining its strong profitability
TASK or PROBLEM
1.
Ryder’s cost-plus pricing was inadequate because it priced too low for high-value deals and
priced too high on some positive contribution margin deals and lost them
2.
The 600-plus strong sales force were too internally focused on costs
3.
There was no reliable and consistent approach to understanding customer value and
competition on a deal by deal basis
ACTION
1.
Developed a new pricing program called Market Value Pricing (MVP) that reflected the three
“C’s” of pricing: Customer Value, Competition and Cost. It was.
2.
Implemented MVP as a client-server application that delivered the three “C’s” of pricing to each
sales persons’ PC and, as a by-product, automated the sales-order process
3.
Trained the sales force on the new MVP process with day long road shows in four venues where
about 200 people attending each presentation
RESULT
1.
The sales force readily accepted MVP and its external focus largely because the new sales
commission plan was based on the implicit cash flow profitability
2.
The entire 600 person sales force was upgraded and trained on new technology laptops
3.
Ryder improved its market share while ensuring that incremental sales were priced above the
cost of capital while referencing customer value and competitive pricing
Return to Table of Contents
9. Private Carriage Market Study
SITUATION
1. Ryder System needed to clearly understand the facts and trends in the private carriage
market in the post de-regulation of highway transportation environment
2. A 40 page survey was completed by 10,000 businesses and the results compiled
3. Senior managers expected a clear analysis of the data to help inform decisions
TASK or PROBLEM
1. Massive amounts of data had to be sifted and analyzed to develop useful conclusions
2. Staff had no experience interpreting a large and complex set of primary research
3. In many instances, research results conflicted with long held beliefs based on anecdotal
evidence and were viewed with suspicion by line managers
ACTION
1. Analyzed and developed critical set of fact-based observations and conclusion using this
unique proprietary data on the private carriage market
2. Developed presentation of key findings to the Board of Directors including apparent price
pressure and the opportunity to deliver better value to large customers
3. Streamlined national sales process to enhance focus on critical large customer segment
RESULT
1. Ryder began to take steps to recognize that it was in a hostile pricing environment
2. Management began to evaluate radical options like using anticipated cost reductions in its
pricing assumptions
3. Over time, the Company’s the cost structure was radically reduced to remain viable
Return to Table of Contents
10. Workplace Life Insurance
SITUATION
1. Ryder System VP-level executive elects to take a severance package and works through
the out-placement process to identify a new opportunity
2. Accepts job as a life insurance agent with New York Life (NYL) to leverage his Ryder
System sales experience and need for Baby Boomers to prepare for retirement
3. The opportunity to sell workplace marketing of life insurance to Ryder System is pursued as
a way to lock in an attractive long-term income
TASK or PROBLEM
1. Entry level NYL agents were not allowed to offer workplace marketing life insurance
products
2. Ryder System Human Resource executives were unaware of the opportunity to provide
additional value to their employees with little cost or risk
3. Focusing time and effort on workplace marketing detracted from traditional product sales
efforts
ACTION
1. Secured permission to work with NYL workplace marketing group to target 45,000
employee Ryder System
2. Established contacts and convinced Ryder executives to entertain the idea
3. Facilitated proposal presentation by lead NYL workplace marketing agent
RESULT
1. Ryder System executives were convinced that workplace life insurance was a good idea
2. Ryder System executives were uncomfortable with the lead NYL agent and elected to
pursue options with other insurance companies
3. High expectations were met with disappointment and the decision was made to take an
opportunity to return to corporate finance
Return to Table of Contents
11. CFO – ADP Canada
SITUATION
1. New ADP Canada CFO assumed responsibility for the 132 associate Finance department that was
in disarray because the company had just quadrupled in size with two acquisitions
2. People and systems could not talk to each because integration work remained to be done
3. The finance department lacked credibility and was treated as the scapegoat
TASK or PROBLEM
1. Support new systems: Oracle GL, multiple product platforms and financial systems
2. Reset priorities as wrong things were being worked on and many right things were left undone
3. The Finance department was poorly led, poorly staffed and people felt overwhelmed
ACTION
1. Reorganized, hired key managers and took action to retain key associates
2. Simplified and consolidated monthly financial report into a single “Red Book”
3. Held monthly meetings with all Finance associates with anonymous Q&A’s
RESULT
1. Talented teams were put in place and the integration work was completed
2. A single consistent set of accurate monthly reports restored confidence in Finance
3. Finance associate morale and performance improved with frequent and open communication with
the entire team
Return to Table of Contents
12. Facility Integration Plan
SITUATION
1. ADP Canada had recently quadrupled to $130 million with the acquisition payroll businesses
from the Bank of Nova Scotia and the Royal Bank of Canada
2. Achieving the promised economics required the consolidation and integration of the facilities,
production equipment and personnel
3. Spending approval was required by the CEO of ADP, Inc. for this unplanned acquisitionrelated expenditure
TASK or PROBLEM
1. Identify the detailed integration and consolidation plan
2. Clearly document the $20 million spending required for new production facilities, computers,
printers and administrative offices
3. Develop a compelling communication package that reflected the economics
ACTION
1. Coordinated with the ADP Canada region offices, IT, HR, and Corporate Facilities to detail
the plan to reduced the facility count from 32 to 16
2. Created a tabbed book which included ten sections, including an executive summary,
economic impact description, spending analysis and descriptions by region
3. Presented the capital expenditure request to the ADP CEO, President and CFO
RESULT
1. After some intense probing by the senior ADP executives into the detail, particularly in to the
“run rate” impact, the $20 million Facility Integration Plan was approved
2. The project was executed on time and within budget
3. The ADP president requested that the presentation format developed for this project be used
by other ADP units when requesting approval for large capital projects
Return to Table of Contents
13. Money Movement I
SITUATION
1. ADP Canada doubled in size to $130 million with the 1997 acquisition of Royal Bank’s payroll
business
2. Royal Bank’s general ledger system was used to control its $30 billion annual payroll flow and ADP
would incur a $1 million per month penalty if it was not off within 18 months
3. ADP’s US money movement center, however, was not willing to take on this business because of
poor experience with the Bank of Nova Scotia acquisition completed a year earlier
TASK or PROBLEM
1. Safely migrate off Royal Bank’s GL in 8 months while meeting the 99.99% accuracy required to
control cash inflows and the 2 million payments per week
2. The ADP Canada IT staff was very busy integrating other elements of the acquisition and did not
have the resources available to develop and implement a solution
3. The finance associates administering ADP’s money movement operations were familiar with existing
processes but had to be trained on a new process using new technology
ACTION
1. Collaborated with Deloitte Consulting to propose modifying Oracle Financial Suite to replace Royal
Bank’s GL with a new Canadian money movement system
2. Received approval to lead and implement a $7 million project made up of ADP associates from
Finance, IT and HR and 12 programmers and functional analysts from Deloitte Consulting
3. Created innovative techniques to train the ADP associates including a “Screen Cave” depicting the
process flow and “Click-by-Click” documentation for each associate
RESULT
1. ADP associates were trained and ready to go when we went live
2. The new Money Movement System was implemented successfully with no penalty
3. The funds flow was reconciled to the penny on a daily basis to ensure perfect accuracy
Return to Table of Contents
14. Annual Price Increase
SITUATION
1. In late 1997, ADP Canada had quadrupled revenue to $130 million with the acquisition of the
payroll businesses of Bank of Nova Scotia and Royal Bank
2. The people, processes and technologies that came with these acquisitions had not been
integrated to support consistent billing practices
3. Revenue plan targets required an average 8% price increase to meet objectives
TASK or PROBLEM
1. Identify the customer billing data base challenges and consolidate them into one
2. Establish a strategy and process to increase customer prices appropriately
3. Execute in a timely and accurate fashion
ACTION
1. Worked with IT to divert the resources needed to understand the pricing data and implement
the price increases (i.e. bigger increases for clients with lower prices)
2. Communicated plans to customer service regions and trained them to access data
3. Implemented the systems and processes needed to effect the price increases
RESULT
1. Implemented price increases required to meet profit objectives and max bonus
2. Communicated rationale to customer service so they could effectively handle customer
concerns
3. The project was executed on time and within budget
Return to Table of Contents
15. Money Movement II
SITUATION
1. Successful implementation of Money Movement I project accommodated half of ADP
Canada’s requirements on a bare-bones basis to avoid onerous penalties
2. ADP’s U.S. money movement operations preferred to off-load all the ADP Canada
requirements to reduce complexity, costs and serious reconciliation problems
3. Many opportunities to enhance efficiency and expand the capability to offer new products
were identified but deferred during the initial Money Movement I project
TASK or PROBLEM
1. Resources unavailable to develop options and deliver new money movement system
2. ADP Corporate demands for more profit from ADP Canada
3. Ongoing U.S. trust accounting reconciliation problems with previous ADP Canada
acquisition required information system investment for effective resolution
ACTION
1. Expatriate CFO elected to remain in ADP Canada as VP Money Movement to deliver next
phase of money movement project
2. Built business case and secured capital expenditure approval for Money Movement II
3. Defined business requirements and hired permanent staff and consultants from two firms
(about 50 FTEs) to develop, build and execute new money movement system
RESULT
1. Continued to manage money movement operations with perfect trust accounting during new
system development process
2. Transitioned to new VP Money Movement prior to taking new assignment in US
3. New money movement system successfully accommodated ADP requirements and was
subsequently leveraged for other international ADP subsidiaries
Return to Table of Contents
16. Strategic Market Planning
SITUATION
1.
2.
3.
The highly profitable $2 billion ADP Major Accounts Division needed to reverse its declining growth rate which had
declined over 5 years from double digits to slightly negative in 2002
ADP Major Accounts Division (100 to 1000 employees per customer) is ADP’s cash cow and it was facing
increasingly stiff competition from Paychex which had previously focused only on smaller customers
To make the situation worse, ADP MA was not allowed to counter this Paychex threat in the 50 to 100 segment
which was under-sold and under-serviced by its sister Emerging Business Services division
TASK or PROBLEM
1.
2.
3.
Paychex was coming up-market with a no-frills low-price offering targeted at the 50 to 1000 mid-market niche, but
because its sales volume was still relatively small, it was not yet viewed as a serious threat
Turf battles and internal politics prevented ADP from effectively addressing the critical 50 to 100 market segment
and senior management refused to re-open the issue because they were tired of talking about it
The sales force and regional management were becoming increasing disenchanted with what they viewed as poor
decisions by the leadership at HQ
ACTION
1.
2.
3.
Ascertained that Paychex was a serious competitive threat with research and working through the classic industry
analysis process developed by Michael Porter of Harvard
Held cross-functional meetings with field and HQ associates to confirm that beating Paychex and competing
effectively in the 50 to 100 segment were the most serious issues facing the business
Raised these issues in the Issues & Options phase and the Strategic Plans presentations to corporate management
RESULT
1.
2.
3.
Actions plans were developed and executed to counter the Paychex threat
Major Accounts was finally allowed to service and sell into the 50 to 100 market segment
Division and corporate managers developed a better consensus on the key strategic issues facing ADP
Return to Table of Contents
17. Yield Management
SITUATION
1. Budget Truck Rental was spending too much transferring trucks to meet demand while still missing
out on many peak period rentals
2. Lack of cooperation and misunderstandings between regional profit centers
3. No consensus on how to properly allocate and price the fleet by season
TASK or PROBLEM
1. Develop a common understanding of the economics associated with transferring trucks
2. Eliminate the management distraction associated with turf battles and internal politics
3. Optimize the fleet distribution and pricing to maximize profitability
ACTION
1. Worked with staff and line stakeholders to develop a consensus on revenue management
objectives and strategies
2. Drafted revenue management strategy for presentation and agreement by line managers
3. Established weekly processes to communicate fleet pricing and movement decisions
RESULT
1. Reduced fleet transfer expense $ 2 million from $12 million to $10 million
2. Set target fleet plans based on agreed-upon strategies by region and season that resulted in record
2004 revenue and $50 million profits
3. Incorporated new yield management strategy into comprehensive proposal to install new
technology point of sale system combined with on-board GPS-cellular devices
Return to Table of Contents
18. Automatic Vehicle Locator System
SITUATION
1. In late 2003, telecommunications and mapping technology became available to cost-effectively
track vehicle location in real time
2. Vehicle location was a key input into Budget Truck Rental systems, but 20% of the location data
was inaccurate and untimely because of one-way rental transactions
3. The new senior management team elected to evaluate the opportunity to leverage telematics
technology to “change the game”
TASK or PROBLEM
1. Many technology options and a very skeptical car rental oriented parent
2. Limited analytical, operational and capital resources available in recently bankrupt entity
3. Operational staff taxed to manage fleet with existing business practices with little capacity to
accommodate parallel technology enhanced processes
ACTION
1. Identified telematics vendors, evaluated proposal options and selected vendor with best mix of
functionality for the lowest cost.
2. Created request for capital expenditure for parent’s approval to run a pilot program with the
telematics installed on 1,000 units with projected 20% IRR.
3. Ran 4 month pilot with shared resources and evaluated actual pilot unit benefits regarding
utilization, pricing, lost and stolen vehicle recovery and adherence to existing policies utilizing
geo-fences
RESULT
1. Strict evaluation of pilot benefits did not show clear ROI because operations was unable to
manage two fleet inventory management processes in parallel
2. Parent declined to invest in proposals for enhanced yield management system and web-based
point of sales systems that leveraged telematics location–based data
3. Web-based point of sales system eventually implemented even though the truck rental business
was merged with car rental which had its own POS system
Return to Table of Contents
19. Dealer Locator System
SITUATION
1. Objective to grow the Budget Truck Rental (BTR) dealer count while culling low performing
dealers and replacing them with new dealers in high potential locations
2. Field management had inconsistent anecdotal information about existing and potential
dealer locations and relative market share
3. New geographic information system tools became available associated with the Automated
Vehicle Location System pilot project
TASK or PROBLEM
1. Convince the BTR senior management team that using technology would help them reach
their dealer count expansion and revenue growth objectives
2. Develop the relevant data and integrate it into the new map-based technology
3. Deliver the new technology to 200 field managers and train them how to use it
ACTION
1. Created proposal for using Microsoft MapPoint CD-based software to display data
2. Developed the database of relevant location and performance information including market
share and market opportunity by ZIP code
3. Presented tools to all-hands meeting, loaded the software on 200 PCs and attended a
series of regional meetings to vet and improve the actual implementation process
RESULT
1. Field management became comfortable with the new geographic information system tool
and used it to plot their plans to open and close dealers
2. Demand for more information at the dealer level resulted in significant improvement to
dealer performance reporting systems
3. Dealer growth and revenue growth targets were exceeded
Return to Table of Contents
20. Initial $1 Million Capital Raise
SITUATION
1. Cartasite, founded in 2004, needed to raise additional capital to grow its vehicle telematics
business
2. The Company's vehicle telematics service was road tested with its 1,000 vehicle pilot
project with Budget Truck Rental and ready to support additional customers
3. The new CFO was charged with managing the financial and legal aspects of raising the first
$1 million to fund additional sales, financial, operations and technical staff
TASK or PROBLEM
1. Coordinate with existing angel investors and investment bankers to negotiate and share
valuations for successive tiers of new investors
2. Refine initial documentation, financial models and banking to support new capital raise
process
3. Develop and maintain cash controls and a weekly cash management process
ACTION
1. Maintained equity share documentation and recommended valuations per share as
additional capital was contributed
2. Maintained the cash controls and forecast need for additional funds
3. Communicated with investors as required
RESULT
1. Initial $1 million was raised
2. Documentation and investor relations activity completed
3. As hiring and other spending ramped up faster than cash was coming in from investors, the
board demanded a 50% cut in expense reduction cut in senior staff
Return to Table of Contents
21. Commercial Vehicle Telematics
SITUATION
1. Cartasite was poised to support rapid revenue growth in its core vehicle telematics offering
but needed a marquis customer to establish scale and credibility
2. Cash flow constraints required staff reductions including the newly hired VP Marketing and
CFO and other staff
3. The former CFO negotiated an agreement to share the margin dollars generated from a
potential contract with transportation industry leader Ryder System
TASK or PROBLEM
1. Identify and develop relationships with the key Ryder System telematics decision makers
and understand and influence their business requirements
2. Qualify to participate as one of the final four candidates (out of 25 considered) in Ryder
System’s evaluation of telematics suppliers
3. Establish agreement with Cartasite management to support proposal to Ryder System with
necessary operational, financial and technical resources
ACTION
1. Established good relationships with the key Ryder executives and convinced them to set
their telematics business requirements so that Cartasite’s offer was competitive
2. Developed Cartasite proposal and presented it to Ryder as one of the final four suppliers
selected out of a set of 25
3. Worked with technical and operational Cartasite resources to implement a telematics pilot
on four Ryder System tractors
RESULT
1. Cartasite resource constraints combined with decisions to focus on other opportunities to
resulted in an unsuccessful implementation of the pilot project
2. Cartasite was not selected by Ryder to provide telematics services
3. Relationship with sales consultant targeting Ryder was discontinued
Return to Table of Contents
22. $500 Million LBO Initiative
SITUATION
1. New SVP Finance joined Budget Truck Rental (BTR) with the understanding that it would be
spun off as a separate entity by its parent Cendant to focus of car rental
2. Instead, Cendant elected to keep the very profitable BTR and run it as part of its
AVIS/Budget Car Rental operations to offset low-than-expected car rental profits
3. Separated from BTR, the former SVP Finance elected to take a run at buying BTR from
Cendant with LBO financing combined with existing BTR management
TASK OR PROBLEM
1. Make a compelling argument to key stakeholders
2. Raise the debt and equity
3. Convince Cendant that it was in its best interest to sell
ACTION
1. Partnered with UNIFI Capital Management to developed the strategic argument and
financial forecast describing an attractive LBO opportunity
2. Secured agreement with Lehman Brothers and CIT to provide equity and debt financing and
agreement with key BTR management to support the offer
3. Sent compelling strategic argument for Cendant to sell BTR because of the incompatibility
of operating and marketing truck rental with car rental businesses
RESULT
1. Cendant CEO agreed to take the LBO proposal to their Board of Directors, but did not follow
through as promised
2. Negotiations between UNIFI Capital and Cendant were not successful as Cendant went
dark and UNIFI negotiators became distracted with other opportunities
3. BTR’s Denver HQ was closed and these functions were integrated into the AVIS/Budget
Car Rental in NJ
Return to Table of Contents
23. Dignitas Low Income Housing
SITUATION
1. UNIFI Capital Management developed a proposal for the design, development and
financing of an innovative way to deliver 2,000 housing units in Atlacamulco, Mexico
2. Angel investors were supporting this project which included staff in Denver, CO and 10
people in the Mexico City office about sixty miles from
3. The layout, architecture and legal agreements for the Atlacamulco, Edo. De Mexico housing
development were in progress
TASK or PROBLEM
1. The financial models developed for the project were unwieldy and did not meet investor
requirements to understand projected cash flows and ROI
2. The financial manager that developed the financial models resided in Mexico, had limited
investment banking experience and had limited English speaking ability
3. Contractual agreements with US and Mexican stakeholders were in a state on continual
revision
ACTION
1. UNIFI elected to leverage its partner in an LBO proposal to cleanup the Dignitas financial
models and supplement the skills of the staff in Mexico
2. A new model designed to meet investor requirements to understand projected cash flows
was developed and repeatedly revised to reflect changing assumptions
3. Visited Mexico for a week to evaluate the staff and form relationships with key influencers
and local Dignitas stakeholders
RESULT
1. Incorporated investor oriented financial models into stakeholder presentations
2. Negotiations broke down over unsatisfactory legal agreements and liability issues
3. The project was deferred pending establishment of satisfactory agreements
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24. Sage connex Telephony Business
SITUATION
1. Sage connex (Sage) held an innovative patent (pending) on using telephone numbers as
Internet domains and had plans to develop an “online butler” function by domain
2. UNIFI Capital Management entered into a managing partnership relationship with the Sage
founder to raise financing, operate the business and secure the patent
3. A large amount of product development documentation had been developed, but the Sage
value proposition and business case remained unclear
TASK or PROBLEM
1. The Sage founder believed that the documentation he developed was clear and should be
adequate to raise the resources needed to implement the project
2. Resources were required, but unavailable, to develop a compelling value proposition,
strategic plan and the associated financial models
3. Additional capital was needed to complete and file the patent, complete product development
work and fill out the organization
ACTION
1. UNIFI elected to leverage its partner in an LBO proposal to lead the Sage strategic planning
effort and develop the associated business case and financial models
2. Ongoing financial analysis support of Sage managing partner presentations to prospective
investors in the U.S., Saudi Arabia, Mexico and Spain
3. Agreed to act as Sage CFO and participate in business requirement definition and project
management once financing has been secured
RESULT
1. While Sage management and ownership agreements fluctuated over time, financial modeling
and presentation support were delivered as requested in short time frames
2. As of early, 2013 Sage has not secured agreement for the price demanded for rights to its
patent, but the principals are continuing their efforts
3. Sage principals elected to support their financial analysis requirements themselves
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25. Internet Marketing Franchise
SITUATION
1. Corporate downsizing drove need to replace income formerly earned from previous
executive positions in the Denver, CO
2. Opportunities for executive positions in the Denver area were not forthcoming
3. Internet marketing was identified as a growing vertical which could be penetrated by
executives with a background in IT, finance and marketing
TASK or PROBLEM
1. Evaluate options for entering the Internet marketing business, gain approval to become a
franchise and secure financing
2. Learn the business, identify suitable small and medium size business prospects, understand
their needs and close profitable sales
3. Deliver Internet marketing services by leveraging suppliers and completing the work with
internal resources
ACTION
1. Selected national franchise with WSI Internet Marketing as the best option because of its
worldwide network of 1,500 franchisees and purportedly strong vetted suppliers
2. Completed the WSI training in late 2006, attended conferences and learned by delivering
optimized websites, online advertising, social media and email services
3. Grew business and leveraged the WSI supplier network and internal resources, including
employees, to deliver appropriate services and track performance
RESULT
1. By 3Q 2008, the sales funnel was full and 2 to 3 deals were closed each month, but the
Great Recession brought sales to a virtual halt
2. Expenses were cut and financial and pricing consulting work supplemented income
3. Sales efforts did not produce growth, delivery by WSI suppliers was problematic and most
work shifted to internal resources and away from unreliable WSI suppliers
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26. New Product Pricing - Services
SITUATION
1. A large business information collection and reporting company requested help with setting
its pricing strategy for a new product offering targeted at a new segment
2. Company desired to set premium pricing strategy for its using proprietary data instead of the
commodity pricing used for existing core products and services
3. Internal disagreements over which option was the best market entry and distribution
strategy for a new proprietary product in development for over two years
TASK or PROBLEM
1. Understand the customer value proposition and how best to prove it prospects
2. Develop consensus of the optimal market entry strategy
3. Assemble market pricing for competitive offerings and set pricing strategy
ACTION
1. Interviewed key staff members from IT, sales, pricing, marketing and operations
2. Made compelling recommendation to select strategy to target and penetrate highest value
segment first and use this price as a reference for other lower value segments
3. Drafted price cubes by customer size and segment referencing customer value and existing
market alternatives for similar but less valuable offerings
RESULT
1. Product line leadership and sales accepted strategy recommendation and entered into
testing with selected high value prospects to establish customer value
2. Analytical complexities and significant prospect resource commitments combined with
uncertain benefits made it impossible to develop quantifiable value estimate
3. Management , under investor pressure, elected to defer investment in this project and the
team moved on to other assignments
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27. Pricing Diagnostic - Manufacturer
SITUATION
1. A venture capital group purchased a bankrupt $500 million revenue firm, took steps to reduce
capacity and costs but found it still needed to inject cash to keep it running
2. Pricing responsibility was moved to the CFO who requested outside help to evaluate the
existing pricing group and processes and recommend ways quickly increase cash flow
3. Decision was made to decentralize pricing authority to plant operators and sales had instead
of the “center of excellence” pricing plan previously recommended by BCG
TASK or PROBLEM
1. Understand existing poorly organized pricing processes, systems and data bases and help
the existing overwhelmed pricing staff to sort out the facts
2. Management could not identify which customers were losing money and which customers
would likely tolerate the price increases needed to get cash positive
3. Operating management preferred to make pricing decisions on an incremental plant by plant
basis which resulted in sales and customers getting multiple bids per order
ACTION
1. Interviewed staff and line managers to understand the business and their challenges
2. Assembled deal by deal pricing and variable cost data for 21 months into a data base
designed to sort by customer, product line, product, plant, region, salesperson, etc.
3. Calculated deal and customer level data to display price changes, margin dollars, and a
comparison of core products and pricing between customers
RESULT
1. Recommended price increases based on price indexes calculated by deal and customer
compared with an “allowable” price increase strategy set by the client
2. Management used margin dollar information by customer to set action plans to “eliminate”
negative contribution margin customers
3. Management expected to use the price increase recommendation process later
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