What is this thing called 9Stucks?
9Stucks is a dynamic business diagnostic tool. It identifies nine distinct yet interrelated business challenges that cause a company to underperform.

“ServiceCo” (Privately-Held Professional Services Firm)

The Diagnosis

Quick Facts:

  • Industry: Professional Services
  • niche consulting – engineering services
  • one location, well-established national presence and reputation
  • privately held, three shareholders
  • The Stucks (6): DitchMomentSlow LaneFogMazeRough

What I Heard From the Leadership Team:

  • referral to the CEO by one of his close, trusted advisors
  • CEO: ‘We need a ‘fresh pair of eyes’
  • marginal profits
  • most personal assets of three owners tied up in the business
  • leadership team ‘tired’, considering exit alternatives
  • management team in flux, gaps in leadership

What I Found After Digging In:

ServiceCo was a well established professional services firm that was a bit stale.  The owners were tired and ready to exit the company.  There were lingering issues that needed to be dealt with: changes in people at the senior management level, systems upgrades, pricing, expense reductions and decisions about the appropriate market focus.

DITCH

  1. Growing conflict among three shareholders over exit strategies
  2. Stay and grow, or sell?
  3. Personal interests overtaking business needs

MOMENT

  1. Indecision on personal matters leaving company somewhat adrift
  2. Employees don’t see conviction or long term focus
  3. No operational planning – accountability lacking in annual plans

SLOW LANE

  1. Management team has gaps, some key skills missing
  2. Owners are questioning commitment of one key employee
  3. One senior executive has lost respect of management team
  4. Factions within the company (‘us vs. them’)
  5. Lack of accountability over billable time
  6. Incentive systems only set up for a few employees

FOG

  1. Serving multiple business segments; in some areas company has limited expertise and limited presence
  2. To boost revenue, management took on a number of small $ engagements – many of which were unprofitable
  3. In another attempt to boost revenue, management bid low and won large, ‘commodity like’ service projects – these helped with the ‘billable time’ but also were based on low billing rates and generated low profits
  1. Consistently weak profitability is having negative impact on shareholder value
  2. Low productivity and low billable ratios of many senior people on the consulting staff
  3. Excess spending throughout many functions
  4. Too many ‘admin’ (unbillable) staff contributed to high overhead

ROUGH

  1. Poor project management control systems
  2. Weak people utilization tracking and reporting
  3. Outdated processes that did not meet new customer expectations