Case Study: Interim Chief Executive – Eco City Vehicles Plc (AIM)

Background: Eco City Vehicles Plc, a niche Mercedes-Benz commercial business based in London, was facing a challenging period. The company suffered from low morale, poor customer relationships, and operational disruptions that were impacting its overall performance. Adding to the complexity, the founders, who were executive directors, had not taken any cash off the table during the initial investment. It became highly desirable for the investors to reduce their shareholding, and I was tasked with facilitating this through a further share placing. Appointed by the majority shareholders, chairman, and investors, I led the company’s turnaround as Interim Chief Executive.

Challenges:

• Low morale: The workforce was disengaged, affecting internal culture and external service quality.
• Market decline: The business was operating in a sector experiencing a double-digit contraction.
• Operational issues with TFL compliance: A significant fault in the conversion of Mercedes Vito vehicles to meet TFL requirements was creating operational setbacks.
• Customer satisfaction issues: The reliability problems stemming from the conversion issues were negatively impacting customer relationships and satisfaction levels.
• Founders’ shareholding: The founders, who had not taken any financial gains from the initial investment, had a high shareholding that needed to be reduced through new investment.
• Financial instability: With stagnant revenues and thin margins, the company’s financial position was precarious.

Actions Taken:

1. Rebuilding the Management Team: I focused on restructuring and revitalising the leadership team, ensuring the right people were in place to address the immediate challenges and position the company for long-term success.
2. Addressing Initial Engineering Issues: While the fault with the TFL-compliant conversion was not fully resolved, we overcame the initial hurdles, allowing for better operational stability and improved delivery timelines.
3. Raising Investment: To address the founders’ desire to reduce their shareholding and bring fresh capital into the business, I led a successful share placing involving an institutional investor. This not only facilitated the reduction of the founders’ shares but also brought in essential funding for future growth.
4. Optimising Sales Mix: By focusing on higher-margin products, we improved the gross margin by 2%, contributing to a stronger overall financial position.

Stakeholder Management:

• TFL: As the regulatory body overseeing London taxis, I maintained ongoing communication with TFL to update them on our engineering progress and ensure continued compliance.
• Taxi Unions: Representing a key customer base, the taxi unions required consistent communication to minimise disruption for their members. By being transparent about our progress, we helped manage expectations during the technical challenges.
• Mercedes Benz: Collaborating closely with the Managing Director of Mercedes Benz Vans UK and Europe, I worked to resolve product issues and ensure their ongoing support for future operations.
• Manufacturing Partner: By instituting regular reviews with our manufacturing partner, we streamlined the conversion process and reduced operational disruptions.
• Large Customer Influencers: Key customers who held significant influence over broader market perceptions were engaged directly. Restoring their confidence was vital for rebuilding trust in the brand, particularly after the reliability issues caused by the conversion fault.
• Nomad and Broker: Managing the Nomad (Nominated Adviser) and Broker was crucial to ensuring that the company remained compliant with AIM regulations and had access to capital markets. I maintained open lines of communication with both parties, providing regular updates on operational progress and financial performance. This transparency ensured their continued confidence in the company’s strategy, enabling smooth execution of the share placing and ongoing support in maintaining investor relations. By working closely with them, I secured the necessary guidance to align our actions with market expectations and regulatory requirements.

Stakeholder Management: Original Investors

The original investors, including the majority shareholders and the chairman, were instrumental in my appointment as Interim Chief Executive. Given their significant investment and long-term interest in the company’s success, managing their expectations was a top priority throughout the turnaround process.

• Clear Communication: From the outset, I maintained transparent and regular communication with the original investors. This included detailed updates on the company’s financial health, progress in addressing operational challenges, and the impact of key strategic decisions such as the share placing. By keeping them informed, I helped ensure their confidence in the turnaround strategy.
• Aligning Interests: The original investors were keen to see a reduction in the founders’ shareholding, as the founders had not taken any cash off the table in the initial investment series. I worked closely with the investors to ensure that the share placing achieved this objective, aligning with their long-term financial interests while securing institutional investment for the company’s future growth.
• Focus on Value Creation: The investors sought a sustainable turnaround that would protect and enhance their investment. By improving the company’s operational performance, increasing margins, and enhancing cash flow, I was able to demonstrate value creation and set the foundation for future profitability, which reassured the investors of the company’s positive trajectory.
• Leadership Transition Planning: Given their vested interest in the company’s stability, I ensured that the handover of the CEO role to an original director was smooth and well-coordinated. This gave the investors confidence in the continuity of leadership and the company’s ability to maintain its recovery and growth under the new CEO.

In managing the original investors, I struck a balance between addressing their immediate concerns—particularly around shareholding and cash flow—and building a long-term vision for the company’s success, securing their ongoing support throughout the transition.

Outcomes:

• Revenue Growth in a Declining Market: Despite market difficulties, Eco City Vehicles achieved a 4% increase in revenue, supported by improvements in stakeholder management and strategic sales decisions.
• Profitability and Cash Flow: The combined effect of better margins and increased operational efficiency led to a doubling of EBITDA and a notable increase in operating cash flow.
• Founders’ Shareholding Reduced: The successful share placing not only brought in new capital but also allowed the founders to reduce their shareholding, achieving one of the key objectives of the turnaround.
• Customer Satisfaction Restored: While the engineering issues were not fully resolved, addressing the most critical faults helped restore customer confidence and stabilise relationships.
• Leadership Transition: Once the company was back on stable footing, I transitioned the CEO role to one of the original directors, ensuring leadership continuity and future success.

Conclusion: Through decisive leadership, effective stakeholder management, and the successful facilitation of institutional investment, Eco City Vehicles Plc overcame significant operational and financial challenges. The company emerged stronger, with improved customer relationships, restored profitability, and a more balanced ownership structure, ready for future growth.

Case Study: Interim CEO Engagement for a Leadership Transformation

Background

In 2023, a well-established company, with a leadership team accustomed to reporting to family owners for over 40 years, faced significant challenges. The organisation struggled to adapt to the pace required by a new institutional investor and grappled with declining demand exacerbated by the UK’s cost-of-living crisis. In this context, Trevor was brought in as an Interim CEO, having been strongly recommended by a former colleague at Harwood Capital.

Objectives

Trevor’s primary objectives were to:

1. Assess the existing leadership dynamics and operational challenges.
2. Implement a short-term strategic plan to improve immediate results.
3. Strengthen the financial control of the organisation by identifying key leadership gaps.
4. Facilitate effective communication and collaboration within the management team.

Challenges

The company faced several critical challenges:

• Leadership Transition: The leadership team had limited experience in adapting to the requirements of institutional investors.
• Financial Management: There was a poor grasp of direct and indirect costs, along with insufficient focus on working capital and cash management.
• Cultural Resistance: The longstanding familial leadership model had created a culture that was resistant to change.

Actions Taken

1. Comprehensive Assessment: Trevor conducted a thorough analysis of the organisation’s operational structure, financial performance, and leadership capabilities. He identified key issues such as a lack of control over costs and inadequate working capital management.
2. Development of a Short-Term Plan: Collaborating closely with the management team, Trevor formulated a comprehensive short-term plan aimed at addressing the root causes of the organisation’s struggles. This plan included:
   • Cost Control Measures: Initiatives to improve oversight of both direct and indirect costs.
   • Cash Management Strategies: Enhanced focus on cash flow management to stabilise financial health.
   • Engagement and Buy-in: Ensured that the entire management team supported the proposed changes, fostering a sense of ownership and accountability.
3. Strengthening Financial Leadership: Recognising weaknesses in the leadership team, Trevor sourced a highly experienced Interim CFO. This decision was pivotal in enhancing financial control and ensuring a robust financial strategy was implemented.
4. Communication and Progress Updates: Throughout the engagement, Trevor maintained open lines of communication, providing regular updates to the stakeholders on progress and developments.

Results

Trevor’s engagement as Interim CEO yielded significant improvements:

• Operational Improvements: The implementation of the short-term plan resulted in noticeable enhancements in the company’s operational efficiency.
• Financial Stability: The strengthened financial oversight led to improved cash management and cost control, providing a more stable financial footing amid challenging market conditions.
• Leadership Empowerment: The addition of the Interim CFO and Trevor’s guidance revitalised the leadership team, fostering a collaborative environment that embraced change.
• Positive Cultural Shift: Trevor’s ability to communicate effectively helped bridge the gap between traditional practices and modern management expectations, facilitating a smoother transition towards a more agile operational model.

Conclusion

Trevor’s expertise and leadership capabilities proved invaluable in navigating the organisation through a critical transitional phase. His strategic insights, combined with a focus on operational excellence and team empowerment, laid the groundwork for sustainable growth.

As a testament to his impact, Jerry Wilson, Partner at Harwood Capital, stated:

“Trevor came strongly recommended. His deep operational skill set and strong people management capabilities resulted in him identifying the root cause of multiple internal challenges and drawing up a short-term plan that the whole management team supported. Trevor is a strong communicator – it was a pleasure working with him, and he kept us updated on progress at every stage. We have no hesitation in recommending you seek Trevor’s leadership and support with any change management or turnaround project – indeed, he’s now considered Harwood’s ‘go-to’ operator for this work across the whole group portfolio.”

This case study exemplifies Trevor’s ability to deliver impactful leadership during times of uncertainty, making him a valuable asset for organisations seeking to navigate change effectively.

Case Study: Interim Sales Director – AA Warranty

Overview: AA Warranty’s sales team was comprised of both employed and independent sales representatives spread across large territories. The independent reps had significant control over their regions but were underperforming due to a lack of structured guidance and support. Additionally, strained relationships between the regional teams and head office further hindered sales growth. The management team had struggled to motivate the independents and align their goals with the company’s objectives.

Challenges:

• Independent sales reps exhibited inconsistent performance, with many relying heavily on strong recurring revenue streams.
• There was a lack of a cohesive, structured approach to sales, leading to unfocused efforts across territories.
• Relationships between regional teams and head office were strained, creating misalignment and hampering collaboration.
• Motivation levels were low, and existing sales materials and product offerings needed improvement.

Solution: As Interim Sales Director, I implemented a series of strategic initiatives to address these challenges, focusing on restructuring, relationship-building, sales coaching, and process improvements.

1. Restructuring Within Constraints: I realigned territories where necessary, clarified performance expectations, and introduced incentives for both new business development and recurring revenue growth.
2. Relationship Building: I worked directly with the independent reps and their clients to strengthen relationships, gain their trust, and motivate them to adopt new strategies.
3. Product and Sales Material Improvement: I introduced a new product range and improved point-of-sale materials, giving the team more effective tools for client engagement.
4. Sales Team Coaching and Monthly Seminars: Monthly seminars helped motivate the team, foster stronger connections with head office, and create a culture of collaboration. I also invited head office team members to join these seminars and regional visits, which ultimately transformed relationships and facilitated better alignment.
5. Head Office Integration: By encouraging head office staff to attend sales seminars and accompany me on regional visits, I bridged the gap between field operations and corporate strategy. Over time, head office employees began to eagerly participate in these events, enhancing collaboration and communication.
6. Structured Sales Process Implementation: I introduced a structured sales process that provided a clear framework for the regional reps. This structured approach included sales planning, client engagement strategies, sales funnel management, and performance metrics. By organising their efforts, the reps improved time management and prioritised high-value activities, leading to better sales results.
7. Outsourced Appointment-Setting Agency Initiative: A significant component of the success was the engagement of an independent outsourced appointment-setting agency. This initiative enabled the agency to book appointments for regional reps with new business prospects, effectively giving me greater knowledge and control over the independent reps’ activities. By generating qualified leads, the appointment-setting agency not only streamlined the process for the reps but also contributed significantly to the increase in new account openings. This collaborative approach enhanced accountability and ensured that independent reps had a steady flow of new opportunities to pursue.

Outcome: The combination of structured sales processes, improved coaching, effective collaboration, and the outsourced appointment-setting initiative resulted in significant sales growth across the board. The regional sales reps became more engaged and focused, achieving higher performance levels than before. The strengthened relationship between the regional teams and head office fostered a more cohesive and effective sales operation. The increase in new account openings was a direct result of these initiatives, showcasing the effectiveness of the strategies employed.

Client Testimonial:

Simon Tennyson, Chief Executive – Motorway Direct plc (AA Warranty), remarked:

“I have worked with Trevor on several occasions for over 17 years. His flair for developing sound and commercially viable strategies, sometimes visionary, will make a significant difference to any business, commercial success, and the development of those within the company. He’s an excellent communicator and motivator. When you work with him, you will know that he doesn’t panic and can lead and give sound advice under pressure and in adverse situations.”

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This case study highlights my ability to implement comprehensive strategies that drive sales performance and create alignment across teams. By leveraging structured processes, relationship-building initiatives, and outsourced resources, I was able to transform the sales culture at AA Warranty and significantly enhance its overall performance.