Case Study — Silicon Valley
SIGPRO
Embedded Systems — Voice/Network Hardware & Software
A Silicon Valley hardware-and-software firm on the edge of an exit transformed into a business that could run without its founder — and was ultimately sold.
Benchmarking
SIGPRO specializes in voice communication at the edge of the Internet, combining hardware and software design expertise to develop embedded systems for customers bringing competitive products to market — IP telephones, wireless access points, set-top boxes, gateways and more. SIGPRO is a typical Silicon Valley company: high on intellectual capital but low on cash.
SIGPRO had been struggling with delayed projects and cash-flow issues for some time. Employee morale was low. Mark, the CEO, seemed to be doing everything — there was no delegation of responsibilities within the organization's various levels, which resulted in Mark continuing to work in the company and not "on the company."
Implementation
- Created an exit strategy in conjunction with ownership
- Designed an organization structure that clearly identified the chain of command and responsibilities
- Developed job descriptions to create accountability for all management levels
- Implemented an evaluation system to enforce accountability
- Installed project management best practices that enabled timely project completion and improved customer service delivery
- Created management reports — cash flow forecasts and financial budgets — to help assess financial health weekly
- Developed a business plan as a tool to invite outside investors for equity participation
Results
- The company could run efficiently day-to-day without the owner's direct involvement
- Financial reports helped management determine financial health and cash requirements regularly
- Efficient project management resulted in better customer service and sustained revenues from existing and new clients
- Cash infusion from equity participation helped alleviate the cash crunch and increase investment in further innovation
- The cash infusion also led to enhanced product development and increased revenues
- Ultimately, SIGPRO's shareholders were able to divest their stock for a reasonable market price
“When we hired MRSI, we weren't sure of the viability of our company, and I was evaluating exit strategies. MRSI helped us transform to an efficiently run business unit with clearly assigned responsibilities at all levels. The business plan helped us in getting equity participation from outside investors and that ultimately resulted in the sale of the company.”
Mark Dzwonczyk, CEO, SIGPRO