When Julie Bishop McCollum arrived as the new CFO of Diverzify last year, she found a business growing so fast that its planning processes couldn’t keep up. “When I came onboard in the spring of 2019, they were running their business pretty much off of Excel spreadsheets,” recalls McCollum. A seasoned finance executive, McCollum knew immediately a manual, spreadsheet-based planning approach would prove unsustainable for a company whose rapid growth was fueled by acquiring flooring services businesses throughout the United States.
In fact, she remembers being met with a telltale sign of a planning environment overwhelmed by the velocity of the business: “They weren’t even done with the budget for the year before.”
To remain agile in an era of uncertainty, Diverzify, whose managed shared-services platform combines several flooring services brands into a broad portfolio of capabilities for commercial and residential customers, needed a new, more modern approach to planning. And McCollum had just the solution in mind: Workday Adaptive Planning.
The Diverzify finance team stood up its instance of Workday Adaptive Planning that summer. The team immediately began forecasting for the rest of 2019 by reaching out to the company’s business brands and geographical branches to nail down three KPIs: revenue, gross margin, and headcount projections. “For the first time ever,” McCollum says, “we were able to model out the performance for the rest of the year.”
McCollum’s initial goal was to establish a single source of truth across the company’s various entities. “A lot of the branches were mixed with the corporate budget,” she recalls, so the team worked to distinguish which costs were corporate, such as shared service center costs and P&Ls by geography, department, and acquired business.
She didn’t stop there. Because Diverzify was acquiring floor services firms that already had existing infrastructures, McCollum turned what would be a nightmare on spreadsheets into a streamlined process on the new, cloud-based planning platform. “I quickly saw that we could leave some of our acquisitions operating as they were and consolidate their financials through Workday Adaptive Planning.”
A navigational tool—at just the right time
With forecasting and consolidation in place, Diverzify turned its attention toward the future. “We mapped out in Workday Adaptive Planning not only a budget for 2020,” says McCollum, “but a plan through the year 2023 with EBITDA targets.”
Then came COVID-19. For so many businesses, the roiling disruption of the pandemic made the first few months of 2020 inscrutable and endlessly challenging. But McCollum’s team already had a plan for significant disruption. In fact, it had several.
“Since construction is such a recession-sensitive business, going into 2020, we did some what-if modeling, some recession scenarios,” says McCollum, who notes the team modeled multiple possible outcomes, including revenue impacts of 20% and 40%. Though there was no way they could have foreseen a global pandemic of this magnitude, developing a game plan for a recession only made sense. “As an executive team, we started planning for the inevitable recession we knew would eventually come.”
The planning paid off. Diverzify moved quickly in March to put one of its recession models into action—and after implementing limited payroll and workforce reductions, the company is continuing on its growth path. In fact, it plans to quadruple its revenue in the next three years.
“That’s why I call Workday Adaptive Planning a navigational tool,” says McCollum, “where you’re looking forward; you’re having more value-driven business decisions and real, robust conversations across all functions about your business and where it’s headed.”
For Diverzify, modern planning is helping to create an agile business capable of aiming for growth at a time when other businesses are focused on survival. Workday Adaptive Planning, says McCollum, “became part of our strategic planning and our strategic conversations, not only on a monthly basis but on a weekly basis when we’re looking at our key performance indicators.”
McCollum says Diverzify’s agile mindset—and its reliance on modern planning—means the business can remain focused on what’s next: “We just really quickly left history behind us.”