Behavioral Healthcare Company
Problem
A nonprofit organization with a focus on behavioral healthcare had experienced several years of negative financial performance. The management team, including a newly appointed CEO, were in agreement that change was necessary but there was no consensus on what that change would look like, how to implement it, or how to balance the needs of various stakeholder groups in the design and implementation of a turnaround plan.
Solution
Following an assessment, in which Abraxas Group was able to identify the broad areas of opportunity and develop a working thesis for a turnaround plan, Abraxas Group was retained in the role of Interim COO. The mandate of this transformational leadership engagement was to validate the turnaround plan thesis developed in the assessment and implement a transformative plan that would address the immediate liquidity needs of the organization while also eliminating the endemic operating losses that had placed the organization in such a dangerous position
Result
Building a Base. During the initial assessment and in the first month of the transformational leadership phase of its engagement, Abraxas Group committed to meeting with every member of the management team personally. The organization operated with satellite locations across a wide area, but through an intensive investment of time and personal attention valuable insight was gained into the on-the-ground struggles of the management team.
Hard Choices. Six weeks from the date of engagement, Abraxas Group presented a comprehensive and fully vetted turnaround and restructuring plan at a two-day meeting of the organization’s board of directors. Many of the recommendations represented a substantial departure from the organization’s past practices, and the changes in headcount and scope of services would be substantial. In large part due to the quality of the analysis presented, the support of the incumbent leadership team, and the high quality insight that Abraxas Group had gained regarding the concerns of all key stakeholder groups, this emotionally fraught and ambitious turnaround and restructuring plan was passed with unanimous board approval.
Implementation. Abraxas Group spearheaded the implementation of the plan, which featured to wind-down of two business units, significant asset divestitures, intensive negotiations with the incumbent lender, and a substantial reduction in headcount.
Communication. Throughout the process there were numerous employee townhalls, as well as more focused visits to regional hubs. A semi-monthly email update was also initiated, creating a broad sense of ownership of the transformation plan as it unfolded and ensuring that staff were kept up to date on the progress of the plan.
A Stronger Foundation. Abraxas Group departed this client having addressed its endemic operating challenges with a robust turnaround and having shored up its liquidity through a successful restructuring. The incumbent leadership team was now able to focus on long-term strategic objectives, secure in the knowledge that they now had an appropriately strong financial foundation to do so.
