CASE STUDY

Taking Back Control

Taking Back Control

 

In the Spring of 2015, on the launch of ETL, we approached the CEO of a £40M aerospace manufacturing company that, with several sites in the UK and China, employed circa 500 people and supplied such significant global clients as Airbus and Bombardier.  The company was part of a more broadly based plc group that, in terms of profitability, was more than supported by the aerospace company.  A company that the CEO, had founded with zero sales and two employees a decade earlier, and then sold to the plc group in 2006 so that he had the necessary £2m of further investment to continue its growth.  

Our approach arrived at a pertinent time; the potential client was frustrated.  Although adequately remunerated and regarded as a valuable asset, he felt too constrained by the plc Board.  In short, as a natural entrepreneur, he felt ‘trapped’ in a situation that he no longer enjoyed. In his words, he was no longer “Master of his own House”.  Attracted to the concept and business model of ETL, he saw the combined mentoring/coaching and business consultancy expertise of ETL as an aid to helping him decide where to go, how and why, in the next stage of his business career; and then in developing that new business venture.

So began a journey which led, in mid-2016, to a £50M+ private equity-backed Management Buy Out by the CEO - he had taken back control.  However, those 12 months were not without incident, and ETL provided discrete support all the way.

Support commenced following, first, an introductory meeting between Michael Smith and Jason Crabtree from ETL on the one hand, and the CEO on the other, back in February 2015; and then, with the CEO expressing an interest in our services, a more detailed exploratory meeting in April.  That latter meeting resulted in a proposal to assist, in the first instance, the CEO personally with his career concerns; and then, should he wish, the conduct of a long-term business-wide assistance assignment involving other ETL Directors.

The first coaching session with the CEO, conducted by Michael Smith, took place later in April and, as is often the way in such situations, it concerned the CEO’s private life as well as his business career and how, in particular, the latter was affecting the former.  Frustration at feeling ‘trapped’ was leading to both impatience and anger. 


This session, of four hours, could be described as helping the CEO clarify: where he was now, both in terms of perception and reality (the two are not necessarily the same, but decisions are taken on perceptions); how he felt about that; how it was affecting his business and private lives; where he would rather be and why, both in business and privately; and, because he thought in five-year cycles, where he wanted to be in five years’ time.  That was more than enough for one session, and, in the client’s own words, it not only helped clarify the issues, it also focussed his mind; it gave him a great deal to think about. 

The second session, this time of three hours, took place later that year, and concentrated on those possible five-year outcomes, how he could get there, and the advantages, disadvantages and consequences of doing so.  And in so doing he soon realised that what he really wanted was to regain control of his own destiny; he wanted to buy back the company he had founded, and then grown so successfully over the previous ten years.  That meant private equity backing, and persuading the plc owners to sell.  

The third session, again of three hours, involved the tactics of doing so.  In particular, having developed an MBO plan, which PE companies to talk with, how to present the company to them and, most importantly of all, how to approach the present owners – his plc Board.  

The financial and technical aspects of an MBO he was well versed in and, as one would expect, his knowledge of the market place, both national and international, was substantial and well researched, so he required no assistance from ETL in these respects.  But what he did welcome, as is the case in so many similar situations, was a business/market knowledgeable but independent sounding board who helped test his personal steps as the MBO progressed, especially as he was initially seller, then buyer.  This was where ETL played their part.  

The third session, and the all-important reflection by the client afterwards, involved consideration of how all the pieces fitted together.  To assist himself the CEO produced a detailed mind map of all aspects, business and private.  Of course, before and after each session there were many email and telephone conversations between client and ETL.

As has been stated above, the MBO was very successful, and the client is already pursuing further acquisitions which, over the next three to five years, coupled with organic growth, should take the company to a turnover of over £100M. Then he will start his next five-year plan!

In December 2016 the client agreed the first year of a five-year coaching, mentoring and business advisory programme for himself and his Senior Executive Team which involves at least three ETL Directors; it commenced on 1 January 2017.   

 

We leave the last word to the client: 


“Establishing ETL as an advisory body was a major factor in ensuring the success of our Buy-Out.  Having a consistent trusted coach & mentor through the phases leading to the decision to sell the business, and then the transition into new ownership, makes the process much more robust and controlled.  To take back control, one first needs to be in control of oneself – ETL helped me get that control.”

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