Struggling Organizations Can and Do Turn Around
By Dan Ruskin & Don Weathers
Universal Advisor , 2005 Issue No. 2


In the Grimm Brothers fairy tale, “Godfather Death,” a life is symbolized by a candle. Large ones belong to children, medium-sized to adults in their prime, and small ones to older people. Every instant some flames are extinguished and others again illuminate, as the flames “leap hither and thither in perpetual change.”

Imagine, for a moment, that those flames, instead, represent businesses, except that the strength of the flame has less to do with the age of an organization and more with its profitability. How bright is your flame? Is it vibrant and strong, or is it struggling for oxygen, becoming dimmer and dimmer until it’s in danger of extinguishing altogether?

If you’re feeling the pressure of underperformance or an underlying uncertainty regarding your business, it’s important to act immediately. Words like “crisis management” and “turnaround” are enough to strike fear into the heart of any organization, yet they’re inherently hopeful. With the appropriate assistance, struggling organizations can and do turn around — sometimes more quickly than you’d expect.

From -5% EBITDA to +9% EBITDA in 5 Months!

In April 2004, the President of a Midwest-based metal forming company contacted Plante & Moran AFME for help with one of its underperforming plants. A leading global designer and supplier of low cost, high quality, metal-based components, assemblies, and modules for the automotive industry, the company operates state-of-the-art facilities in 13 countries around the world, most of which operate successfully. At a negative 5 percent EBITDA, however, this particular plant was badly struggling.

The company was understandably concerned. They were facing the difficult decision of whether to sell the plant or to turn it around. They decided to try and salvage the plant.

The P&M AFME team went into the plant to conduct an assessment. They looked at the productivity of the plant, uptime of the equipment, setup time, scrap and work-in-process, and customer delivery. Moreover, they reviewed the organization, discovered where improvements could be made, and developed and implemented a plan to increase the EBITDA from a negative 5 percent to a positive 5 percent over the course of a year.

Not only did the team meet their goal, but they exceeded it by 4 percent in only 5 months! The company was thrilled.

You Can Turn Around

For some businesses, the light is bright and getting brighter. For others, it’s quickly dimming due to increased global competition and economic factors beyond their control. If your organization is struggling, help is available. For more information, contact Plante & Moran AFME’s Dan Ruskin or Don Weathers at 615.883.5111.