From Good to Great: How Cleanaway CEO Vik Bansal Executed a Corporate Turnaround for Australia’s Largest Waste Management Company
There are many reasons a business may need a corporate turnaround. Whether they be distressing factors such as a reduction in sales, cash flow problems, mounting debt, or challenges like rapid growth while finding appropriate means of capital formation, there are many companies that have the potential to become great but miss the mark due to a lack of strong leadership. Indeed, it takes a certain kind of leader to not only create financial results that are quantifiable, but also develop a sturdy foundation for the business that can withstand the test of time and other stressors such as a recession, or more topically, a pandemic. Corporate turnaround is an exercise in taking a company from where it currently stands to operating at its full potential.
For Vik Bansal, it was clear from the beginning that Cleanaway was a diamond in the rough. Known as Transpacific when he first took the position of CEO and managing director in mid-2015, in the six years since his arrival he stood by his initial commitment to take the company “from good to great.” Thanks to an emphasis on strategy and operating models before organization design, Cleanaway has seen stellar growth since Bansal took the helm, with revenue increasing by 10 percent per year, net profit by 23.2 percent, and return on capital from 3.7 percent to 5.5 percent.
Prior to his work with Cleanaway, Bansal had a history of tackling new or difficult challenges. He began his business career by heading the launch of a new product portfolio that was as of yet untested in the Australian market, and in three years turned it into the most profitable category in the entire company. At Delta plc, after being globally acquired by the Eaton ( News — Alert) Corporation his transition efforts saw his branch become the Oceania head of its new parent company within two years, with Bansal being promoted to vice president and general manager. At Valmont ( News — Alert) Industries in the United States, he was brought on to assist with a struggling global product, and was able to create such significant growth that he was soon promoted to chief operating officer and president.
Seeking to return to his home country, Bansal began to explore career options back in Australia and narrowed his search down to three opportunities. Of the three Cleanaway was by and far the worst-performing, having cycled through four chief executive officers in three years and struggling to recover under a debt burden of around $2.1 billion. However, even though it lacked strategic direction and was underperforming for investors Bansal observed that it had remained resilient, and the core of the company had remained good thanks to the 4,000 plus people working at it. Having seen during his time in the United States the potential the waste management sector held, he accepted the position and set to work.
Bansal spent a month before officially starting his role familiarising himself with every detail of the business performance, and so entered the position with an objective view of the business as a whole and a good understanding of the performance of the business in general. He sought, first and foremost, to provide clarity to employees and build a solid base for the business through the development of an operating model. The technical challenges a business faces, the strategy (or lack thereof), and how leadership behaves and engages with each other are all interconnected, coming together to tell the story of how a business operates. In correcting courses on the way the company operates, Bansal was then able to identify where cost could be eliminated, and set out to do so while remaining clear and honest with the employees across the country. Rather than incite anger, this straightforward tactic proved to instill trust from his base, with one early town hall meeting he held even applauding.
Once Bansal had corrected the operating model, it was clear to him that they could not continue to operate as a multi-brand business. Although he was initially hesitant to make such a big change so early in his tenure, in discussing it with employees, executives, and investors not one person was against it, or could even come up with a valid reason not to. Of the options available, Cleanaway had both the longest history and the strongest brand potential making it the natural choice for rebranding , and rebranding the company opened up the opportunity to create a new mission statement and purpose: making a sustainable future possible. For Bansal, sustainability went well beyond its applications to climate change and waste management. It was a word that was in line with his belief in honesty, and by owning the word sustainability for the whole organization they made it about a sustainable future for all stakeholders, rather than simply the environment. This mission statement served as the basis for Our Cleanaway Way, the clear-cut defining strategy for the company that aligned every person in the company toward a single mission.
Thanks to the revamped operating model, re-branding, and clear mission statement, leadership within Cleanaway gained renewed pride in their organization. Rather than being perpetually stuck in crisis mode putting out fire after fire, the operating cadence Bansal created gave management and leadership time to think, and were able to achieve substantially more due to the structure that had been provided. When Bansal began his time at Cleanaway market cap was at less than $1 billion, whereas today it is over $5 billion, and it moved 120 places from an ASX 200 company to an ASX 100 company. Financial metrics are at record levels, and there has been margin expansion across every business unit. The company has successfully maneuvered several large acquisitions, showing that the growth story of the organization is both deep and wide and has the ability to withstand the test of time and trial.
Just one year after Bansal’s appointment to CEO, Cleanaway was awarded the Turnaround Management Association’s (TMA) “Turnaround of the Year Award” in the large company category. It was experiencing growth in earnings and revenue for the first time in three years, and has continued that upwards trend ever since. According to Bansal, for an essential service business such as Cleanaway the competitive advantage comes from the execution of a clear strategy. With a strong operating cadence and rhythm, the methodology of leadership has the flexibility to change without diverging from the language, narrative, and alignment that makes the company united. Bansal has received international recognition for his corporate turnaround, but for him the most meaningful acknowledgement has come from the employees of Cleanaway themselves. If they feel pride in working for the company, he knows he has done his job well.
Originally published at https://www.tmcnet.com.