We worked with the company to shift the measures through the different stages of its transformation. When the company was stabilizing, the annual incentive design balanced a pre-tax profit metric and included an operational scorecard that could modify the result. In the next phase, the focus shifted to profitability. The long-term plan was focused on value creation (ROIC) and shareholder outcomes (relative TSR) as the company transformed. Sales was added once the company shifted its focus towards growth.
We recommended a framework to goal-setting through transformation that closely reflected the nature and stages of the performance trajectory: Stabilize, Transform, and Accelerate. Performance targets and ranges around targets were the critical levers to support the strategy throughout this period. In the stabilizing phase, there was more focus on getting people into the money early and working towards target. As the company began to transform, the company tightened the ranges to raise the performance bar.
In the period since the transformation announcement, management made significant progress against nearly all the strategic objectives. The company effectively shifted to a customer-centric model and repositioned its brands. Financial highlights include a significant increase in annual digital sales, a return to meaningful profitability, and consecutive years of sales growth. As a result, the company share price has grown 300% from the low point prior to the transformation strategy announcement.