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Teaching Note
| HBS Case Collection
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2012
Paul Thomson: Walker Insurance (TN)
by
Jim Sharpe
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Abstract
After a year of searching, Paul Thomson has attained his goal of owning his own business. Walker, the prior owner, has facilitated transition but remains involved in the company, and employees are looking to Thomson for leadership. He takes immediate steps to build morale, replace poor performers in the "producer" sales force, and cut wages and expenses. During a post-closing audit, Thomson discovers a $600k problem that wipes out his contingency funds. He is concerned about having to go back to his investors to fund a buildup of reserves this early in his tenure. If he plans to live off cash flow, his growth goals will be delayed and he may lose some recently hired revenue "producers." He has also been approached about selling the company for $4 million, which could yield a good return for investors and for him personally.