Telco Makes a Turnaround Under Pressure

By developing a new growth strategy and creating cost-reduction plans by product, an Asian conglomerate brought its struggling telco division back onto the growth track.

A large Asian conglomerate had made a string of acquisitions over time to increase profits through its strong membership organization. However, some of the acquisitions were in deep trouble, including a telco division that was underperforming and had a balance sheet deficit.

The organization was having trouble turning around these acquisitions, so it worked with BCG to fundamentally transform the business. The process began with a 100-day plan that followed five key principles for turning the telco division into a profitable, growing business unit:

  1. Make it visible. Make product-specific and business-unit-specific performance visible, and identify which goals each business unit is responsible for meeting.
  2. Cut costs and focus on topline growth. For the short term, cut costs as needed to stay viable. Then build a growth strategy that includes sales transformation, a marketing strategy, and a portfolio/business model.
  3. Redesign human resources. Screen next-generation management candidates and retain upper-level employees, while encouraging low-end staff to exit.
  4. Manage change. Generate a sense of urgency, and drive a strong initiative to re-accelerate business growth.
  5. Monitor progress. Hold regular meetings and involve the CEO and key stakeholders in the decision making. Encourage people to question the status quo.

If we had delayed the involvement of BCG any longer, we might not have been able to recover and would have had no other option but to sell the company for next to nothing. —Group CEO

In just six months, the division went from losing money to making a profit. The company experienced a complete turnaround and became better positioned for future growth.