In November of 2000, when I was appointed CFO, Text 100 was a global technology-focused public relations firm with over 400 employees in 23 offices across 15 countries worldwide. We had just spun out as a standalone company under our publicly traded parent. We were having our best year in company history, with accelerating revenue and profit growth.
Within weeks of my appointment, it was clear that the bursting of the dot.com bubble was accelerating, with the potential to wipe out a wide swath of our client base. The company’s organic growth strategy over the past 20 years saddled it with a large and expensive operating platform. Each office had been left to its own devices to set up operations infrastructure, compensation schemes, and product strategy. As a result, we were not well-positioned to navigate the economic downturn that was rapidly approaching.
We quickly developed an action plan to ensure the agency could weather the storm and prepare for the next leg of growth. We designed and implemented a shared-services platform to provide accounting, HR, and IT support for our North America, EMEA, and APAC regions, allowing us to eliminate the local operations teams. We closed smaller, unprofitable offices and launched a licensed affiliate program to support expansion in smaller markets, enabling us to establish a presence in Korea, Taiwan, Finland, and Latin America. Finally, we developed global compensation strategies, aligning all staff with company-wide financial and strategic objectives.
The restructuring lowered our cost of operations across the company by more than 25%. Our newfound global alignment on compensation and operations led to the development of sales strategies that improved our pitch-to-win ratio by 65%, culminating in the appointment of Text 100 as IBM’s global agency of record in 2001. Even with the impact of the bursting of the dot.com bubble, we delivered 43% revenue growth, a 212% growth in operating profit, and a 120% increase in operating margin over the next several years.