Case Study 1 – Specialist Medical Facility (October 2009 – August 2010)
During the wider economic crisis of winter 2009, Bolt Partners was tasked with the rescue of a specialist medical facility. The £55m revenue business was just weeks away from running out of cash. Plagued with a significant backlog of creditors and debtors, it was facing trading losses of £2m for the current financial year alone.
Diagnosis and immediate action
Working in the joint roles of Chief Financial Officer (CFO) and Chief Restructuring Officer (CRO), we took control to turn the business around. The biggest challenge was a straightforward liquidity crisis stemming from a backlog of creditors and failure to collect invoices. However, an unsustainably high rate of staff turnover, an imbalanced portfolio of services and a general lack of productivity were working to destabilise the core of the organisation.
Working towards long time viability
Bolt Partners started off by fully maximising short-term revenue and establishing a rolling 13-week cash flow forecast. We introduced a workable procedure for managing creditors and held weekly performance meetings to keep management motivated and abreast of changes.
This initial three-month stage alone resulted in a loss reduction of £1.5m in the remaining six months of the year.
We were then in a position to develop a comprehensive turnaround plan including rationalising the estate base and delivering a corporate restructure, which resulted in a further £2m of savings.
From loss to profit in under a year
Just 10 months later, this failing medical facility was more than just stabilised. By the end of the project its month-end cash balance had risen from £1m to £5m. And today, not only is the business clear of loss-making territory, it is on track to make a £2m profit in the current year.
Case Study 2 – Acute Healthcare Services Provider (2006 - 2008)
In February 2006 Bolt Partners was called in as Chief Restructuring Officer (CRO) to administer the recovery of an acute healthcare service provider, which was leaking a staggering £28m each year.
Absence of leadership and governance
The primary issue with this project was what it was lacking. We discovered for example, a total absence of robust financial information due to high staff turnover in the finance department. The business also suffered from a lack of visibility surrounding the profitability of each of its units, while there was no evidence of any strategy or plan. Add this to a dysfunctional management team and the business was in clearly in need of expert help.
Take control and enhance staff accountability
This gave us no time to waste in implementing the first of our three-part recovery strategy. We introduced centralised control over the employment and overtime pay of the operation’s 3,000 staff with immediate effect. We also established tighter debtor collection and strictly controlled payments. These measures enabled the organisation to continue trading through the initial period, while we turned to developing a longer-term comprehensive plan for getting the healthcare service provider back on track.
From £28m loss to breakeven within two years
The results speak for themselves. In year one the trading loss was reduced from £28m to £12m, and in year two the loss entirely eliminated. Crucially, third-party stakeholder confidence in the organisation was fully restored, creating a clear path forward.
Case Study 3 – Acute Healthcare Surgical Specialty (2008 - 2009)
Bolt Partners’ targeted expertise is also employed to carry out reviews of existing operations that could simply function better. In 2008 for example, the team was commissioned to carry out a business review of an underperforming surgical specialty of an NHS Acute Trust. Our objective was to work with the clinicians to develop and implement a series of actions with a view to improving financial performance.
Developing workable solutions
Bolt Partners was quick to unearth and isolate the most significant problems which included poor clinical engagement, a complete disconnect between finance and operational teams, poor financial and operational data and unnecessary complexity across multiple sites – all made worse by underlying weak management processes.
Following detailed analysis of these issues, we shared our findings with the clinicians through a transparent workshop environment in which performance was discussed frankly an openly. This empowered clinicians, motivating them to work with the Bolt Partners team in developing key actions to take the Trust forward.
Financial and operational improvements
Bolt Partners left behind a significant improvement to both service contribution and clinical engagement. We also facilitated the clinical team having a better understanding of financials and a solid foundation for ongoing service development, led by a more motivated and cohesive team.
