Case 5: Healthcare Turnaround
Our Transformation-from-Within© approach helped a private equity client turnaround a non-performing healthcare facility, leading to breakeven in 12 months, and profitability in 18 months
Situation
A long-term client reached out to us to help determine if one of their non-performing portfolio companies could be turned around, or if they needed to exit immediately and cut their losses.
A long-term private equity client had been holding equity in a non-performing healthcare facility for several years. The entity was running at a negative EBITDA, employee turnover was too high to enable any sustainable growth or improvement, and customer satisfaction was trending downward. The client reached out to us to help determine if the business could be turned around, or if they needed to exit immediately and cut their losses.
Challenge
One of the C-Suite executives who was also an equity partner in the business, was a key factor in the loss of customers and talent, and has resisted all previous change efforts.
The challenge was that one particular C-Suite executive, also an equity partner in the business, was a key factor in the loss of customers and talent. As such, the client needed someone who could not only lead an operational transformation and financial turnaround, but one who could be tactful enough to bring this executive along, and motivational enough to retain employees long enough to believe in the changes and see the results.
Action
Amira provided one-to-one leadership coaching for the CEO, and positioned him to lead the transformation effort and get credit for the improvements.
We led the leadership team in redefining their financial strategy (through both revenue and cost optimizations), creating a new branding and marketing strategy, tactical operating plan, as well as organizational restructuring, and team reskilling (retraining and recruiting).
Once strategic plans were approved, we worked with both middle management and junior team members to translate the C-Suite’s strategy into a tactical operating plan that the whole organization “owned” and were motivated to deliver.
Throughout the execution phase, our team embedded within the organization, working side-by-side with the delivery team, coaching them on problem solving and giving them new collaborative behavioural tools. At the same time, Amira provided one-to-one leadership coaching for the CEO.
Results
The entity achieved breakeven in 12 months and its first profitable quarter in 18 months. Furthermore, employee turnover dropped by 50% in the first year.
The facility was transformed from an underperforming entity with 10 years of losses, to breakeven in 12 months, achieving its first profitable quarter within 18 months. Employee turnover rate was cut in half in the first year, and dropped a further 20% the following year.
Our client opted to maintain majority ownership in the now profitable venture, and is currently evaluating plans to launch in two additional locations.