Good Hands Healthcare

1
Good Hands Healthcare

• PRESENTED BY

• PAOLO GAGLIARDI
• JEFF DESRUISSEAUX
• DING HAN
• CHUNBO WU
• CYNTHIA D'ARASMO

2
Issue

• Is Jackson the best to lead Good Hands Healthcare
  back into a prominent position, given the
  companys recent slumping performance?

3
Analysis Strategic Intent

• Maintain a prominent position as industry leader

4
Analysis External

• Aging Population
• Reduced nursing home but increased assisted
  living use
• Industry growth (revenue)
• Industry highly regulated
• Reliance on government funding
• Subject to federal statutes
• Increasing lawsuits
• High quality standards
• Volatile Industry
• Highly Fragmented

5
Analysis 5 Forces

• Suppliers
• Building suppliers -gt Low bargaining power
• Medical/Healthcare -gt High bargaining power
• Government (assistance, funding, health and
  building certificates)-gt High bargaining power
• Insurance companies -gt High bargaining power
• . High overall bargaining power

6
Analysis 5 Forces

• Buyers
• Elderly family members
• Increasing number of elderly
• Decreasing nursing home use
• . Low overall bargaining power
• Competition
• Numerous competitors with low market share
• . High overall competition

7
Analysis 5 Forces

• Substitutes
• Family
• Stay alone
• . Low threat of substitutes
• New Entrants
• High startup costs (high debt)
• Highly regulated
• High liability costs
• Guaranteed Income
• . Medium-High threat of new entrants

8
Analysis Internal

• Weakening position in the industry
• Management
• Mature/Experienced
• Aging
• Lack of opposition Personally appointed
• Compensation
• Employees
• Compensation Below industry
• High turnover
• Lack of focus / Decline in sales
• Nursing homes vs assisted living and Alzheimers
  facilities
• Cash problems
• Debt restructuring
• Publicly traded

9
Alternatives
Yes (keep)
Hire internally
Reassign
Hire externally
Keep Jackson as CEO?
Hire internally
No (dismiss)
Ask for resignation
Hire externally
Hire internally
Fire
Hire externally
10
Alternatives

• Keep current CEO
• Pros
• No contract fee
• Maintain good relationship among management
• Cons
• Lack of crisis turnaround skills
• Inability to see real causes of poor performance
• Inability to see where market is headed (ability
  to restructure)
• Lack of conflict resolution

11
Alternatives

• Dismiss current CEO
• Pros
• New fresh ideas
• No management ties
• Hired to address critical issues (financial and
  personal)
• Reassure shareholders
• Cons
• Loss of relationship among management
• Contract fees (25M)
• Potential for upper management turnover
• No succession plan

12
Alternatives

• Reassign current CEO
• Pros
• New fresh ideas
• No management ties
• Hired to address critical issues (financial and
  personal)
• Reassure shareholders
• Keep valuable asset within the organization
• No contract fees
• Cons
• Tension among employees (follow new CEO or
  Jackson?)
• Sway managers ideas
• Clash with new CEO

13
Alternatives

• Hire External CEO
• Pros
• New insights
• Neutral perspective
• CEO skills/ competence
• Address management issues
• Cons
• Cause tension among employees
• Potential resignation of management team

14
Alternatives

• Hire Internal CEO
• Pros
• Minimize losses
• Assure continuity
• Cons
• Overwhelming desire for continuity (incapable of
  bringing new ideas)
• Loss of management team
• Partial decisions
• CEOs lack of competence
• Lack of knowledge for external industry trends

15
Decision criteria

• Ability to identify and address industry trends
• Ability to manage crises
• Internal Management/Financial
• External Market shift
• Turnaround skills

16
Recommendations

• Ask for resignation or dismiss current CEO
• Hire externally

17
Plan of action

• Identify succesor
• Ask CEO for resignation
• Accepts
• 3M as per compensation package
• Anounce resignation to management team
• Issue press release
• Introduce new CEO the following week
• Present to management team
• Hold press conference

• Refuses
• Dismissal
• 25M as per employment contract
• Inform management team
• Hold press conference
• Replace immediately by new CEO
• Expert in debt restructuring
• Not necessarily from within industry
• Experience with highly regulated industries
• 3 year-contract with 2 year extension clause

18
Good Hands Healthcare
Thank you