No-nonsense due diligence on asbestos cleaners with high-value company culture.

The asbestos cleaners had built a well-run, highly profitable outfit. However, asbestos is (thankfully) a limited issue. One day, it’ll all be cleared up in the company’s Randstad operating area.

Neither the company nor the prospective investors really knew how long that would take. In other words, no one was entirely sure when the existing successful business model would fall off a cleared-asbestos cliff. What an image.

First up was assessing the asbestos company’s commercial viability. Hans brought to the table insider industry knowledge on residential construction and the dynamics of Dutch social housing. Lodewijk complemented this with his comprehensive commercial due diligence experience (from street lighting to tulip bouquets, industry dynamics are more similar than you’d think).

To gauge whether the asbestos cleaners could viably maintain/increase profitability given the future cliff-drop, the duo looked at:

• Sales volume and price

• Industry dynamics and competitive landscape

• Potential for new entrants and disruptive technologies

• The company’s position in the value chain: crushed by suppliers and customers, or dominant enough to keep its slice of profitability?

Basics, covered. Now for the fun part.

Fresh takes on success

Anyone paying attention already knows the 10 key things about a due diligence’s focus sector. New insights are what we’re all really here for. And a fresh but seasoned look can pick out the true drivers of profitability. That’s what really makes Lodewijk tick — analysing the crucial levers by deep-diving into industry dynamics.

Oh good, another consultant deep-dive… We forgive you for thinking it — we get it. Good to know that we do things differently, then. If we spot a factor that looks worthy of further investigation, we sanity-check with our clients first. If we don’t think a deeper dig will significantly change our initial conclusion, we won’t steam ahead for the sake of it. Quite simply, that’s not a good use of our time or your money. At The Strategy Office, we prefer feeling useful.

But back to the project at hand: our duo’s productive deep-dive spotlighted the strategic value in the asbestos company’s conscientious internal culture.

A long-term strategy for competitive edge

The asbestos company only operated in the Randstad area, building a reputation based on high quality and convenient, quick-response locations.

Hans and Lodewijk saw that its real edge lay in deftly managing the asbestos removal process:

• Making the experience as non-invasive as possible for property residents

• Aligning removals in social housing with already-planned tenant changeovers, construction or renovations (the cleaning team was in and out, without added disruption)

• Cultivating valuable relationships and lines of communication with residents and construction companies

• Being predictable and reliable, consistently delivering as planned

The company was already leveraging this value-adding management skill in its adjacent services. These lay in the nebulous and intriguing category of “difficult to deal with”:

• Marijuana plantation hidden in a social housing flat needs clearing before a new tenant moves in? They’ll get it sorted ASAP.

• Tenants left a property in a truly abysmal state? Good as new in no time.

• A resident passes away and there are no local relatives to deal with their belongings? They’ll be considerately packed up and stored for the legal claim period.

The real question for the company’s future profitability, though, was how likely it was that their key customer group (currently with asbestos issues) would evolve to using these adjacent services, rather than going to another provider. 

When a job’s got to be done right, reputation counts

Beyond asbestos, the firm specialises in tactfully, effectively dealing with the complex and unusual. That’s business with a healthy margin — people will pay to have those tasks taken off their hands.

The firm’s industry/residential sector connections are also potential sources of ongoing business. Its whole operation is geared towards transferring its reputation for discreet efficiency into adjacent areas. Most importantly, its people are, too. They take pride in being high-end providers permitted into people’s homes; aware they’re disrupting daily life, and doing so respectfully and empathetically.

Besides his work as a strategy consultant, Lodewijk’s entrepreneurial track record has honed his recognition of this stand-out people and culture management. As the asbestos company’s model evolves, customer-facing employees will need to continue embodying this quality. In parallel, management will need to scale with care, avoiding stretching employees to a point where service suffers.

Time for hard numbers

Hans and Lodewijk summarised their conclusions on a single key numbers slide. We made it easily shareable with the PE client’s potential partner investors, too. None of the release letter rigmarole of the big consultancy firms, that basically renders their work for you redundant. Ours is a short, snappy summary — just reminding clients that we’re not fortune-tellers.

An honest, fair assessment — and a purchase to boot

Primed with a realistic expectation of the asbestos company’s evolving profitability, our PE client successfully invested.

Hans and Lodewijks’ compact way of working meant links with both the asbestos company and our PE client were open and productive. No siloed, black-box consultancy; at The Strategy Office, we like becoming accessible, valued partners who build mutual trust and appreciation with our clients.

With a bigger consultancy, this PE client would’ve certainly got a team headcount. Unlikely that it would have included a duo with Lodewijk and Hans’ tailored expertise, though. Seasoned experts, they got on with what they do best. Transparently and efficiently, with the price point to match.