Why did you join McKinsey’s Recovery & Transformation Services (RTS) team?
The idea of building something from the ground up was a big part of it. I knew that if we designed it correctly, our value proposition would be a game changer for companies in distress.
Combining McKinsey’s world-class sector and functional capabilities with our distinctive restructuring and turnaround skills is proving to be a powerful recipe for success.
What kinds of problems does RTS respond to?
Many of our clients are experiencing distressed situations, while others are moving from good to great. Regardless, each situation presents a unique set of challenges. Identifying the root causes that adversely affect performance, developing a transformation plan that pushes the envelope at every stage, and working alongside management as their partner to quickly capture value: these are all key elements that define the success of a typical RTS engagement.
Can you give us an example?
Recently, we were retained by a company that was fighting to survive. Immediately, we discovered that the company was 30 days from running out of cash and in default on its loan covenants. The board of directors appointed me CEO and chief restructuring officer, and it tasked RTS with leading the restructuring and transformation. Using the principles of RTS, we implemented an aggressive program that stabilized the business, raised incremental financing, and developed a value-enhancement plan that pulled various functional levers across the organization. In the end, we avoided a liquidation and successfully restructured the company; this culminated in a sale of the business to a strategic investor at six times forward EBITDA. It was exhilarating to work on such a fast-paced assignment that resulted in a tremendous outcome.