Case Study
Project Management Process:
Audit Hedwin Corporation
(Now Zacros America/Hedwin Division)
We brought Hedwin back from the brink of bankruptcy to a $22 million sale price and saved dozens of pension funds using smart project management process audits.
We were brought into the Hedwin Corporation to find out why things were going off the rails.
Employee morale was terrible.
Everyone dreaded going into the office because they wondered what fire they were going to put out that day. And even once one was taken care of, it was just a waiting game until they had to put out the next day’s fire.
Even worse, the company was employee-owned and every misstep meant that retirements and futures were threatened as the company risked losing value.
The frustrating part was that the core product line was STRONG and had real commercial value.
Our CEO, Rich Broo was elevated to CEO of Hedwin by the Board of Directors and tasked with revitalizing the company.
It was a tall order.
The company was in dire need of a complete turnaround and things had to change at a fundamental level.
When making decisions, we needed to consider the ESOP (Employee Stock Ownership Plan) and the feelings of the employees who not only cared about the time invested in the company, but who literally had everything to lose with it as well.
After a thorough Product and Project Management Process Audit of the company’s commercial and operational performance, Rich was able to identify the root cause of company failure and determine the necessary corrective actions.
The audits verified that Hedwin was suffering from:
- Exceptionally high operational costs
- Disproportionally high headcount compared to the company’s size
- Production equipment in need of upgrades
- Low daily production and quality rates
- Eroding sales
- ESOP draining cash out of the business
The root corrective action was clear.
The company was in dire need of a complete turnaround and things had to change at a fundamental level.
- Sales assets were aging and needed to be replaced
- Manufacturing and quality issues had to be addressed
- Sales/Contributions margins had to improve
- ESOP had to be dissolved
Rich had to convince the board of directors and the employees that dissolving the employee-owner part of the business was the best course of action.
He showed the employees the results of our product and project management process audits and heexplained that their processes were failing. The only root cause corrective action that would work would be a complete turnaround and liquidation.
We sold the company at auction for $22 million!
If the company had tanked, the stock shares would have been worthless. We had our work cut out for us and we were committed to making a difference.
Rich rolled up his sleeves and we got to work. We settled it by initiating a 363 bankruptcy with help from a financial restructuring consultant. Shortly after that, the ESOP was dissolved, headcount was reduced by selling off underperforming divisions, operating costs were slashed, and sales agreements were renegotiated.
The end result…
The company was sold at auction for $22 million! Yes, $22,000.000.
Instead of holding onto dying stock shares, employee pensions were saved and all employees received proceeds from the sale of the company.
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