XYZ Labs is one of 3 major pathology players in Australia. The organisation is owned by a private equity company, created by the amalgamation of 3 companies of various sizes in 2017. The market segmentation of the new company ranges from non-complex, high volume primary care pathology to complex hospital pathology, including a large focus on histopathology and oncology. Very little was done to integrate the cultures of the 3 companies at the time of the amalgamation, with many staff still identifying themselves as an employee of one of the 3. Despite cultural challenges and a disconnect between services, the organisation was holding its own in the market. Six months later (October 2017) a decision was made to make 4 significant changes to the organisation within 3 months including:
- Transition to a new Clinical Information System
- Implementation of automation in the main laboratory
- Move of data entry services from WA to Malaysia
- Roll out of staff redundancies
The changes lacked local leadership, were made with very little regard to the WA market and without staff consultation and project management discipline. The negative impact on the performance of the organisation (turn around times and accuracy of reporting), its brand and reputation and the morale of staff is significant.
Commencing as the new CEO, in February 2018, with a clear mandate to turn the business around, my focus for the first 90 days has been to stabilise the business and rebuild trust with:
- Our customers: to stop revenue leakage
- Our staff: to improve productivity and service and reduce sick leave, stress claims and resignations
The impetus by the Board for an immediate bottom line turn around however is reflected in the 2018/19 budget which is built on an aggressive growth target (3 x current run rate). This will require the business to not only win back customers but sign new business, implement stringent cost controls, including further redundancies, whilst ensuring staff are motivated to improve productivity to mitigate further impact on service quality.
Seeking thoughts on:
- Effectively balancing getting ‘burnt out’ staff back on the bus and rebuilding market credibility whilst making further change to achieve bottom line targets?
- Setting and managing Board expectations 10 weeks in to a role without creating a perception of not being able to deliver on profitability?