Two separate holding-company agencies historically lost significant money in China on a shared major international food brand – while still making acceptable margins in most other markets. Given the size of the China assignment, this dragged down the entire region.
What was done
Operational and talent-audit interviews with 56 staffers across both Shanghai- based agencies, by a team of four from Shanghai, Singapore, and Hong Kong.
One brand was run well operationally but weaker strategically. This resulted in very high rework rates which depressed margin
The other brand had legacy issues of not charging for work over and above scope which depressed margins
Undifferentiated strategic vs. tactical approach, resulting in everything being treated as strategic – also depressing margin
Both assignments had loose contracts, scope development and scope tracking systems which made additional charging almost impossible
Both assignments needed a specific re-structure allowing work streaming and more efficient development
Added more strategic support to team to reduce rework ratesStructured teams to stream work properly – including dedicated operations support
Began to charge for out of scope workDeveloped new revenue streams via additional services
The overall assignment went from double-digit losses to double-digit profitability within one year