Client: Direct Marketing Results, Intl.
From its founding DMR's primary role has been to help radio stations
develop and deliver unique direct marketing programs targeted
at increasing station listenership. When a new Chief Operating
Officer was brought in to run DMR, he sought strategic guidance
on how to value the existing lines of the business and develop
a plan for the future growth of the business.
- For eight years the core business had been focused on providing
radio stations with direct marketing advice and campaigns, each
of which was primarily driven towards expanding the breadth
and loyalty of listeners to the station in an effort increase
ratings and market share and thereby increase the potential
to attract advertising dollars. This was and is a very competitive
and fickle business that tends to view direct marketing groups
more as vendors than full business partners.
- Beyond the core business, DMR had spread into several other
businesses that were only tangentially related. Each had the
potential to be a promising business in its own right, but did
not build off the existing strengths of the company. The challenge
was to evaluate the investment made to that point in these new
businesses, their future potential, and the logic of DMR being
in these businesses.
- The company had been run by its founder since inception. The
new COO had been hired to transition the founder to an advisory
role so that the founder could pursue other business commitments.
The challenge included all the typical challenges of transitioning
leadership from a founder (and majority shareholder) to a successor,
as well as balancing the continued involvement of the founder
in the business.
The solution involved three key steps:
in which the company was involved, their related markets, and
the skills and resources within DMR or to be acquired by DMR
to effectively manage them.
- , including the unwinding
of at least one business unit.
in charting his own course within the company.
- that allowed Lighthouse to continue to play
a limited but integral short-term, cost-effective role given
lack of personnel for DMR to execute it independently.
- After an initial assessment of the businesses, Lighthouse
convened and facilitated a strategic retreat to evaluate a series
of management issues (differing strategic views, transition
of the business to a new leader, voids in key skill sets required
by certain businesses) and build a framework that could be used
by management to guide not only immediate businesses decisions
but also future ones. Such a framework had not previously existed.
- In a few short months: 1) A framework was developed by Lighthouse
and each business evaluated through it. 2) The future of each
business was decided (including 3 distinct strategies for each
business unit - stabilization, growth, and closure) and pursued.
3) And a new management approach was established.
- All aspects of executing the business conclusions were done
entirely by management with continued guidance from Lighthouse,
making everything from the decision-making to execution of the
business plan entirely theirs.
- Lighthouse transitioned to a role of only providing advisory
support to the COO on an ongoing and regular basis, thereby
managing costs while providing needed support during growth.
This relationship has continued uninterrupted since 1998, reflecting
the continued value of the advice as the business has advanced
through numerous subsequent growth stages.