E-commerce Distribution Company: EBITDA increased 1200% YOY

Overview

A $16 million e-commerce distribution company serving the family entertainment industry struggled with poor leadership, a disengaged workforce, and declining performance. The owner had made multiple poor hiring decisions, leading to a culture that prioritized frivolous activities over business impact. In an 18-month engagement, ExecHQ executed a leadership overhaul, optimized operations, and implemented a growth-focused strategy—ultimately increasing EBITDA by 1200% YOY while setting new company records for revenue and operational efficiency.

Business Goals

• Revitalize Leadership & Organizational Culture – Eliminate toxic workplace behaviors and instill a culture of high performance and accountability.
• Stabilize Financial Position – Secure emergency funding to sustain operations and invest in necessary improvements.
• Optimize Operations & Sales Performance – Improve efficiency in warehouse management, customer service, and marketing execution.
• Drive Revenue & Profitability Growth – Establish a profitable growth strategy that could reverse the company’s downward trajectory.

Key Results at a Glance

• EBITDA Growth: 1200% increase YOY (2018 vs. 2017).
• Revenue Growth: 17% increase in 2017 vs. 2016.
• Record-Breaking Sales: Q1 2018 became the highest revenue quarter in the company’s 20-year history.
• Inventory Optimization: 30.7% improvement in Weighted In-Stock rate, reaching 96.5%—the highest in company history.
• Employee Engagement: 12% YOY improvement in employee engagement scores.
• Capital Secured: Successfully obtained $500,000 in emergency funding from a Midwestern banking consortium.

Original State

• Toxic Culture & Poor Leadership:

  • Multiple poor hires led to an unproductive and low-accountability culture.
  • Employees focused on non-essential activities rather than driving company growth.

• Inefficient Operations & Sales Decline:

  • No clear strategy for improving customer satisfaction or enhancing the company’s value proposition.
  • Warehouse operations were disorganized, reducing productivity and increasing fulfillment errors.

• Financial Struggles & Urgent Capital Needs:

  • The company lacked the necessary capital to purchase inventory and sustain operations.
  • Leadership had no compelling strategy to secure funding.

Post-Engagement Success

• Leadership Overhaul & Culture Shift:

  • Conducted 90 days of employee interviews to identify high performers.
  • Formed an elite “Navy SEAL Team Six-style” leadership group of top employees to lead internal transformation.
  • Removed ineffective executives, including heads of operations, marketing, and sales.
  • Recruited “A” players to take over critical leadership positions.

• Operational & Sales Optimization:

  • Redesigned warehouse layout for improved efficiency and productivity.
  • Combined sales and marketing roles, eliminating one six-figure salary while improving overall strategy.
  • Implemented customer-focused improvements to increase satisfaction and boost the company’s value proposition.

• Securing Financial Stability & Driving Growth:

  • Crafted a compelling capital-raising strategy that secured $500,000 in funding.
  • Trained management in continuous process improvement to enhance efficiency and accountability.
  • Implemented ExecHQ’s Organizational Fitness framework, aligning leadership with clear mission, purpose, and core behaviors.

Program Details & Implementation Approach

Phase 1: Leadership Transformation & Organizational Alignment

• Conducted employee assessments to identify leadership gaps and restructure teams.
• Created a high-performance leadership team to drive company-wide change.
• Removed ineffective leaders and replaced them with strategic, high-impact hires.

Phase 2: Operational Overhaul & Market Strategy

• Redesigned warehouse operations to improve supply chain and fulfillment efficiency.
• Integrated sales and marketing roles to optimize customer engagement and revenue growth.
• Launched customer satisfaction initiatives to strengthen the company’s competitive position.

Phase 3: Financial Stabilization & Sustainable Growth

• Developed a compelling financial pitch for capital investment, securing $500,000 in emergency funding.
• Trained leadership in financial discipline and operational efficiency, ensuring profitability and long-term sustainability.
• Embedded Organizational Fitness principles to align the company’s mission, vision, and execution strategy.

Key Takeaways

• Strategic leadership changes and culture shifts can rapidly transform an underperforming business.
• Operational optimization and financial discipline drive both short-term recovery and long-term growth.
• A focused growth strategy aligned with strong execution is key to unlocking profitability and sustaining momentum.
• Companies must have an adaptable and agile leadership team to successfully navigate financial challenges and operational inefficiencies.

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