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Spark's Rescue & Remediation Approach

Business Rescue - Reasonable Prospect - Preparation

There is limited time and it must be used effectively - timing is important. The 5 day week is buttressed by 2 weekends, which can add 4 days onto the Reasonable Prospect Assessment, which needs more thought than is customarily given! The 2008 Companies Act - Section 129.3 provides 5 working days from Board Resolution and filing, unless application for extension is made to the commission.

If you have not engaged a BRP prior to the board resolution, which is a distinct possibility strangely, then your BRP will require the data upon which the board made their informed decisions, as well as this suggested set that follows. A few notes on the request that follows.

Rescue & Turnarounds - Access to People, Data & Artifacts

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reasonable prospect assessment approach

Business Rescue - Reasonable Prospects - First Tranche of Information

Focus Area Purpose Request to business
Legal Oversight Ensure the process is followed with duties understood, and liabilities appreciated Provide full picture of legal constraints or complications imposed by any current cases or suites. Are there provisions for any additional liabilities?
Industry Overview Do we have a Favorable PEST analysis and view on the Broader Market Considerations Any of the most recent industry and competitor analysis which informed the business strategy - Porters, PEST, SWOT etc
Business Stabilization Is the business stable and able to trade without problems? Banking Contact and status of transactional accounts, overdraft and credit facilities, Supply Chain creditor view, Voice of Customer view, as well as Utilities and 3rd party providers within Value Chain
Financial Analysis Is there anything in the financial that is a showstopper? Audited Balance Sheet, Income Statement, for last 3 years, plus forecasting and variance for those years, plus YTD BS, IS and CFS
Debt Obligations Full view of obligations and their status A clear view of secured and unsecured debt, with breakdown of Capital, Interest Rate, Covenants, Repayment Frequency, Outstanding Capital Balance, date of next payment, class of creditor (institutional, supplier, ad-hoc)
Austerity Measures Management Actions to date in removing discretionary spending Include this in YTD Income Statement and Cost-centre budgeting
Strategy Need to understand the business strategy, and key themes All of the latest Strategy artifacts and all input documents to the strategy
Organizational Structure Need to understand your value chain and what you do Organogram with alignment and break down of Headcount to value chain, and distribution/service channels, also include geographic footprint.
Commercial Insurance Policy Docs An excellent proxy for various insights We need the policy wording of all sections, the underwriter, the broker, insured amounts and exclusions.

Business Artifacts for Orientation and pre-reading

Ignore request repetitions.

Business Artifacts - Second Tranche

Ref Request Purpose
Executive Oversight, Statutory Reporting and Stakeholder Management
E01 Last 18 months of Board Packs - meeting minutes and those of all sub-committees Will focus on Risks and understand those accountable for Key risk management.
E02 Risk Log what risks were foreseen, what surprises were beyond the control of the business
E03 Last year of minutes of Leadership monthly meetings Just to catch up and understand the business better
E04 External Stakeholder and Influencer map, including all those with Rescue Plan Voting rights. Which are the people that are on our side, and those against, who can we sway, and who are lost, who can hurt us, who can help us, and how to get a plan together.
E05 Regulatory Transgressions - ombudsman Rulings, Fines, or even Civil Law suits Another Canary in the coal mine, and will gauge leniency of regulatory bodies and our ability to negotiate terms if this is applicable or possible.
E06 Customer and Channel Complaints Log Lead Indicator about Customer satisfaction
E07 Last 6 months of monthly status reporting by leadership team to Managing Director Understanding the business and recent management actions - there's no need to waste everyone's time in interviews if I can read these
E08 Published strategy and associated planning tied to targets in forecasts Insight into Implementation Ability, and the Culture around accountability, and Consequence management

Basic Financial and Management Reporting

F01 Last 3 years of Audited Financials - Balance sheet and Income Statements -  including any off-balance sheet items. Need to understand Liabilities and profile the key creditors for stakeholder management Identify Typical Hacks like Goodwill Need to see how liquid the assets are
F02 Last three years of Monthly Business Management Income Statements - they need not be audited. Understand Cash generation and to identify Income Statement Line ownership.
F03 Last 4 years of business management financial forecasting projections, as opposed to the actuals. Always interesting to compare projections with reality
F04 Current rolling 12 months forecast view Detecting trends and understanding things like seasonality, if it applies.
F05 90 day debtor aging analysis to understand our Accounts Receivable
F06 Outstanding debts to understand our Accounts Payable
F07 List of Material Contractual Obligations, including any future dated ones. to understand obligations
F08 Any Management Account Reports depending on the business, we will start off with the efficiency ratios, for example. Income to Cost Ratio Fixed to Variable Cost Ratio Debt - capital Outstanding as % of Income Debt Servicing Costs as % of Income

Operations and Customer/Client Interaction

OP01 Nearest branch or service channel Mystery Shopping - I will have a customer experience across various products and service channels
OP02 All outsourcing arrangements IT? Call center? Infrastructure? Audit? Security? Catering?
OP03 Geographical Footprint Map
OP04 Channel Map for Client Buying, using our products Digital, Physical, Branch based or Relationship based?
OP05 Channel Map for Client After Sales Support Who owns the customer?
OP06 Segmentation of the client base Segmentation by: LSM, FSM? Assets vs Life Stage? Any psychometric segmentation? By channel (Self-Service, Call Center,  Person (ie. Shop floor consultant), or Relationship? - ie Broker, Account manager)

People, Incentives, Benefits & Structure

P01 Organizational Chart & leadership team CV Staff mapping to Value Chain or Chains Orientation- we will have to work together, so as much as I can know about them the better. What does the org structure look like, for example: Front line Staff  as % of Total Middle Office as %  of Total Back Office excluding IT as % of Total Thought Leadership as % of Total Middle Management as % of Total Ratio of Revenue Generators to Non-revenue generating staff. Ratio of Head Office Staff to Branches/Regions
P02 HR - On boarding material for New Hires So I can on board myself and at least be familiar with the business so some extent on day 1
P03 Formal staff communication on Expense management: - no business case travel - 3* hotels and lower - B class car rentals - cessation of any training for management level and above - no attendance to conferences etc check adherence to these policies
P04 HR Plan for Employees - Replacement on Vacancies halted? - No replacement for natural attrition? - How are critical positions being managed? - Is there a staff retention plan? - Has the Union been consulted? - View on voluntary retirement? - Are all leave balances at zero? - Is the CCMA aware of our situation? Good relations there?
P05 What do staff performance ratings look like? What % of the staff are ranked as poor performers? - What is the breakdown of: Top performers, Those meeting requirements, Those too soon to rate Under performers What is the staff attrition rate? Voluntary vs Dismissed?
P06 Is there a management 360 tool, used? What do the staff say about their seniors?
P07 Have perks and benefits been reviewed? Credit cards? Housing Allowances Loans? Memberships? Travel and Company Cars? Entertainment? Phone costs and gadgets (like iPads)

Special Requests

SR01 Those requested: Hit by a bus report from each Exco member or Direct Report into the managing director and their direct top 2 layers of the business. Mental Model: pretend I have the gift of prescience and can predict what will happen within 24hrs. Unfortunately, as you leave the building tonight, you will cross the road and be hit by a bus. Thankfully you survive, but you will be on your back recovering for the next 6 months. You won't be able to walk or write, even talking will be an effort. The last person you want to see in the high-care unit is me with my ugly demanding mug! Assumptions: You care for the business, and want to support your colleagues so that in your absence things can continue, likewise assume that if we need something, we will come and hassle you - you need to be left alone or recover however. My Request: Please play along with my imaginary scenario (I look forward to seeing you in great health, boundless energy, and youthful optimism). Please prepare something so that you do not need to be disturbed and so that I can orientate myself. Purpose: To simultaneously assess the business leadership and to get to understand the business in detail at the same time, whilst having a 1:1 in which talk can be candid and free. Outcomes: Hoped For: Talented Team provide a complete, relevant, consistent and aligned business update. Expected: Frictional Boundaries exist between various teams, functional areas or individuals. Blame is rife, with discussions too frequently reverting to past failures and the allocation of blame rather than  maintaining focus on the near future and what needs to be achieved.

Meetings for Morning of Day 1

Meetings for Morning of Day 1
Ref Purpose of Meeting Attendees Timing
Assume all necessary off-site prep meetings have taken place.
MT01 Introduction and expectation management.  Business Leadership Team 15-30 mins
MT02 We must give the business as a whole: 1) Confidence in our technical ability 2) Comfort in our transparency, integrity and ethics. 3) As clear a picture of the near future as possible. 4) Information on where to get information. Immediately Open to the floor,   we will answer any question asked. Only requirement is for the questioner to introduce themselves and speak so that everyone can hear. In case not asked, a prepared FAQ is made available, containing information on: communication of business rescue purpose, useful sources of information, terminology and definitions., desired outcomes vs potential outcomes, the Legal Business Rescue Process, the approach to building a Rescue Plan, key milestones, key decision points, communication plan, scheduling of subsequent communication sessions My Personal Brand, a commitment to do my best to live by it and an invitation to be challenged without consequence if my actions are contradictory. Business Leadership Team with Rest of Business 55 mins
MT03 Check-point. Confirm Meeting Schedule, Approach, Meeting aims and participants for next week - with current management team The business as a whole 55 mins.
MT04 Contingency for overflow of MT03 and will walk the building thereafter to visit various departments. Solo afternoon sessions begin

Business Meeting Update Sessions with Key Functional Areas - schedule for afternoon of day 1

Meetings with Key Functional Areas- Day 1 Afternoon

Ref Functional Domain and Source of Insight Preparation - what i need from the session Purpose If unavailable?
IMI01 Value Proposition and Product Development 30mins to present. What do they sell, what problems do they solve, what need do they meet, and what products or services have been created to make their customers happy and willing to part with their cash? Relevance to the market, and understanding client needs and the ability to satisfy this need. Understanding substitutes. Is this business a Kodak? (when last did you see a non digital camera?) Can't imagine it!
IMI02 Sales/Marketing 30mins to present thought leadership, actions aligned to the business strategy. Covering all above the line marketing campaigns and advertising material. Target audience and channels/media used, with their understanding of the client and their expressed and unexpressed needs. What does the business claim to sell or what problem do you solve for your customers. what is their value offering? Why do or did their various customers buy their product or use their services? what do they compete on? Price? Accessibility? Functional Fit? Brand Aspiration? Is there any emotional connection to the products or services by customers. Who owns the voice of the customer, who owns the customer relationship? - schedule a meeting for Day1
IMI03 HR or Strategy 30mins Value Chain talk through or better still walk through. ie Product Dev->Marketing->Sales->After Sales Support->   supported by? Manufacturing, Procurement, Operations, IT, HR, Finance, Pricing, Risk, Strategy?  Where are the key accountabilities? How many staff assigned to each functional area? what business processes tie the value chain together and who owns these processes? What are the meta steps that the business takes from understanding their customers to delivering a product and  receiving payment? We will use the Org Chart from HR, starting off at the Business Unit or Department Level to work it out.
IMI04 - A HR - Training or HR - Orientation, or Operations process Team Level 1 Process Diagrams Just to understand the business so that we can conduct a process walk through following the cash. Cash Conversion Cycles This can be one of the least intrusive and impactful tactics for rescue cash management. - Workshop 1 made up of there 1 hr sessions - Alignment, gather data and complete templates, team analysis on wins and actions.

Business Meeting Update Sessions with Functional Areas - schedule for morning of day 2

Meetings with Key Functional Areas- schedule for morning of day 2

Ref Functional Domain and Source of Insight Preparation - what i need from the session Purpose If unavailable?
IMI04 - B Finance & Operations Cash Conversion Cycle Quantify the Cash Conversion Cycle Components and confirm their ownership. Cash Conversion Cycles As with Part A
IMI04 - C Finance, Operations & Procurement Cash Acceleration Possibilities Simplistically we will complete this. As above
IMI05 - A Head of Finance Income Statement workshop - Head of Finance and individual Income Statement Line Owners Income Statement de-construction and value driver session please refer to this link for the purpose of this session as well as this one. Have yet to encounter this anywhere, so this will be a Rescue Deliverable for Week 1
IMI05 - B Head of Finance and Income Statement Owners of Revenue Income Statement workshop - Revenue - Head of Finance and individual Income Statement Line Owners
IMI05 - C Head of Finance and Income Statement Owners of Fixed Cost Line Income Statement workshop - Fixed Cost - Head of Finance and accountable people of this Income Statement Line
IMI05 - D Head of Finance and Income Statement Variable Cost Line Income Statement workshop - Fixed Cost - Head of Finance and accountable people of this Income Statement Line

Schedule Reasonable Prospect Meetings - all must happen within first 3 days of being on site.

Schedule Meetings - all must happen within first 3 days of being on site.

Meeting Purpose Participants Timing
1:1: informal introduction Creditor meeting to assess appetite and attitudes. Also need to understand what concerns they have, and what requirements we must meet for a plan to be approved. Creditor Decision maker asap - any time of day/night, for as long as is required
Creditor meetings as per the companies act Mandated Decision Maker from Creditor asap,
Other affected parties Worker Unions, including the CCMA if appropriate asap
2nd Value Chain Review - talk through and walk through Functional Heads and Income Statement Value Driver Owners 120 mins
Understanding available data and current reports Business Information and Reporting Person or Team, need to start Value Management 55 mins
Skip level meetings- reassurance and raising of issues, managing their expectations, introducing myself. Review of Rockefeller habits.  Direct reports to the leadership team 30 mins for each team
weekly end of week report back. Leadership team Friday afternoon (unless mosque commitments prevent this) - Thursday afternoon will do as well 
schedule daily 15min - huddle sessions mid-morning. will discuss purpose at first session with Leadership team daily - 15 mins - mid morning - same time every day except Friday
Schedule first Fishbowl exercise Leadership, next two layers of reports and talented individuals day 7 for 90 mins - i will update the meeting invite in my initial set of meetings
Schedule first Session for Rescue Plan actions Leadership team and direct report. We will start off with an experiential learning game - The 10 finger Game, pre-reading required. day 8 for 90 mins