Turning Around a Failing Healthcare & Wellness Business
The Challenge
Following the acquisition of a leader in healthcare and wellness by a Multinational Corporation (MNC), the newly formed Healthcare & Wellness Business Unit (HC&W BU) faced declining profitability and material questions about its long-term viability and strategic fit within the new corporation. Years of poor execution, intensified competition, rising costs, and a lack of strategic alignment had left HC&W in a critical state, operating without effective governance, standardized processes or clear direction, leading to disjointed efforts, rapidly diminishing employee belief and buy-in, and heavy scrutiny from its stakeholders. This situation demanded a structured Turnaround strategy to restore stability, unify efforts, and realign HC&W with MNC’s financial goals.
The Solution
The newly appointed President of MNC’s Healthcare & Wellness BU engaged Tower Strategy to leverage our fu.sion methodology and platform to help diagnose the root causes behind its underwhelming performance and to define a path forward. Extensive primary research, including over 80 hours of workshops and interviews with senior leaders, defined a portfolio of over 70 individual turnaround initiatives, which we pressure-tested and structured into 7 major strategic pillars targeted at correcting for the systematic weaknesses that had caused the business to fall into distress. That 5-year plan targeted an EBITDA increase of ~55% and top line revenue growth of ~20% above the most recent year.
After gaining approval on the plan from the C-Suite and the Board, we then developed a change management plan to enable tactical execution of the plan itself across the organization’s cross-functional teams (Sales, Supply Chain, Operations, Legal, IT, etc.). This ultimately led each of the executives responsible for those functions through the implementation of their individual turnaround efforts as well as a cross-functional business process reengineering effort to ensure more seamless hand-offs on cross-functional work and to ensure that the organization possesses the governance processes necessary to guard against process disconnects that had caused it to fall into distress in the first place.
Impact
The Turnaround Plan reinvigorated HC&W's operational structure and delivered significant positive results, surpassing initial expectations. By prioritizing high-impact, low-resource initiatives, the first year alone saw a $5M+ increase in EBITDA, putting HC&W well on its way to the targeted 17.4% profit margin by 2027. In addition, we succeeded in justifying the budget necessary to add substantial capacity in the business unit’s R&D, Sales, and Operations teams while also justifying additional CapEx to improve the efficiency and throughput of operations in key manufacturing sites and successfully building the case to divest key underperforming assets and sites to trim low-margin, low-potential segments from the business. This strong financial performance demonstrated the effectiveness of our structured approach, fostering renewed confidence, alignment, and momentum for sustained growth and innovation within HC&W.
