The firm of the future: Wipfli Annual Report, 2018-2019

Over the past 20 years, Yeled v’Yalda has experienced amazing transformation. It has grown from a less than $20 million Head Start-focused program to a $95 million diverse family services agency. Further growth is on the horizon, but achieving its $125 million funding goal means continuing to innovate — this time to successfully implement a succession plan from its founder and CEO to a second generation of leadership. This change requires bringing along the entire leadership team and maintaining the organization’s unique and successful culture.

As Yeled v’Yalda’s longtime trusted advisor, Wipfli was asked to help transform the organization from the inside out. In order to create a strategic transition plan, both Wipfli and Yeled v’Yalda needed to understand the current culture and the leadership team’s strengths, weaknesses and needs.

That meant delivering hard data. Using interviews, the Predictive Index, and Human Synergistics’ assessment and development tools, Wipfli demonstrated how different leaders were impacting the organization of 2,000-plus people. This revealed leadership development opportunities and specific areas of coaching to help get them where they need to be to continue Yeled v’Yalda’s successful growth strategies.

Ultimately, transforming the organization required evolving the way its leadership team perceived their responsibilities. And it involved enabling them to make tough but strategic decisions to redefine roles and even scope out hiring a new chief operating officer and HR leader from outside this tightly knit, community-oriented organization.

Inclusive change management was the key to success, but coaching on strategic thinking, culture, and how to use data in key development activities, laid the foundation. When you develop your leaders, teams and culture, you set yourself up for even greater innovation throughout the rest of your organization.

As a long-time and successful equipment maintenance program provider, SU Group knows how essential it is to maintain long-term customer relationships. Sustaining these relationships requires robust tools and timely underwriting data and loss data for its leadership, sales and underwriting teams to use. 

The company was relying on its own internally developed historical loss data to prepare reports used for business planning. However, the company’s management found that these reports often contained raw data that needed to be refined to make it useful. SU Group’s management also noticed that as its customer relationship management (CRM) software had evolved, its use by the sales team was falling.   

SU Group reached out to its trusted advisor Wipfli for potential solutions.

After assessing SU Group’s situation, Wipfli identified Microsoft Power BI — a business analytics tool that provides real-time, customized business intelligence — as a possible solution to both the internal reporting and CRM adoption concerns. Through Power BI, SU Group’s president could access reports directly through his phone, and the data contained in the reports was better refined and updated in real-time.

The president also found that Power BI enabled him to easily customize the reports with filters. Both he and other leadership team members were impressed with these features and realized that Power BI could be used for more than tracking sales numbers — it could improve overall decision-making for the business.

While Wipfli worked with SU Group’s IT Department to build out Power BI dashboards and implement the tool, the firm’s experienced change management team was also able to work with SU Group’s sales team to increase adoption of the CRM software and systems. This helped streamline the company’s generation and pipeline activities, leading to greater collaboration between departments and increasing the amount of data flowing into the system.

Transformative ways of thinking about processes, technology adoption and data make this a story of innovation for SU Group. Its team is now primed for greater growth and success well into the future.

The best family business leaders know when financial success is occurring and lifestyles seem comfortable, standing still in manufacturing is not an option. These leaders are always in search of options to become their very best, grow strategically and manage leadership succession effectively.

The president of family-owned Van Zeeland Manufacturing was in the succession process and had the foresight to equip the next generation with supportive resources that would move the business further down the path. He turned to Wipfli for their manufacturing experience and strategic tools necessary to embrace his vision.

The first focus was operational. There appeared to be questions relative to actual overhead costs to manufacture different types of components, as well as accuracy of gross profits at the component and customer levels.

Wipfli conducted job-costing workshops with the Van Zeeland leadership team. Together, they broke down cost pools, developed true overhead allocations, and discovered different perspectives of gross margins. Van Zeeland’s team quickly discovered some key customers and products were costing them more than anticipated, and their estimating business rules were in need of change.

As difficult as it seemed, parting ways with profit-draining customers allowed Van Zeeland to be laser-focused on lines of business with greater profitability potential and new information that made estimating more accurate.

The second focus was cultural. Wipfli helped mentor Van Zeeland’s next generation of leaders in lean improvement, allowing them to see the business, its operations and its people differently. Weaving continuous improvement into the estimating and quoting process seemed like a natural starting point to win more good business and quote more accurately with less effort. With Wipfli’s guidance, they broke down the existing process, targeted where improvement needed to occur and reassembled to be their very best.

Van Zeeland’s leadership — both present and future — is clearly on the path of a smooth transition into the future, and Wipfli has gained a new meaningful relationship with a very promising future.

As one of the most storied sport franchises in the world, the Green Bay Packers require an advisor who provides honest feedback and a focus on their long-term vision. Wipfli has done just that for nearly a century.

As the Club and NFL have grown, so has Wipfli’s ability to be of service. The firm’s relationship with the Packers has evolved from establishing their initial books and records to providing audit and tax services, including NFL-required reporting for salary cap purposes and team comparability. In recent years, consulting services, including performing cost segregation studies, compensation studies, and interpreting revenue recognition’s impact on the Club’s financial statements have added value to the organization. Wipfli’s ability to combine our specialized expertise with a Wipfli Way service mentality set the firm apart.

In recent years, the Packers have taken on a number of expansion projects to increase their future financial viability. Wipfli suggested cost segregation studies, allowing the team to properly classify asset additions in their appropriate depreciable categories. This technique accelerated their depreciation expense, ultimately providing them with a significant amount of cash flow from current tax savings.

Wipfli was involved with arguably the most important expansion project in Lambeau Field history in 2003. The old Lambeau Field facility was no longer financially viable, so the Club was faced with a referendum to approve a sales tax measure to move forward with a significant stadium renovation. The first step in the referendum was a financial presentation to the non-partisan Legislative Audit Bureau (LAB). After the LAB reviewed and gave their support to the budget, plans and projections, the referendum passed through the state legislature and ultimately was approved by the people of Green Bay. By helping construct the projections, financial analysis and LAB presentation, Wipfli played a key part in getting the approvals and funding the team needed to survive in Green Bay.

Today Wipfli is a thought leader working with the NFL, the Club and other auditors on a variety of accounting and tax matters, such as the challenge of revenue recognition. The firm’s forward-thinking and expertise in football matters has been recognized by these parties. This has placed the Packers in a leading position among the league, reinforcing that they are properly managed and have the advisory support they need for long-term success.

Although part of a national league, the Packers benefit from a local firm that’s only a 10-minute drive from Lambeau Field. Wipfli has provided services, advice and forward-thinking solutions through the ups and downs of the Packers’ history — the true marker of a relationship built on trust.

Tulare Regional Medical Center (TRMC) was facing a tough challenge: becoming the first hospital in California to reopen after declaring bankruptcy in September 2017.

But they were determined to succeed. As step number one, the Tulare Local Health Care District Board engaged Wipfli in October 2017 to assume management control of the hospital. The ultimate goal was to develop a plan to pay off its debt, gain financial solvency and reopen — all within one year. There were countless obstacles, including the fact that the District's current liabilities were over twice the amount of the current assets, compounded by the District losing $39 million in the previous fiscal year ending June 2017.

Wipfli provided executive leadership in a hospital CEO, CFO, controller, chief administrative officer, revenue cycle support, and third-party reimbursement services.

To reach the overall goal, Wipfli delivered a full suite of solutions. The team analyzed the District’s financial condition and developed a plan to meet its debt obligations. Wipfli’s team was very instrumental in finding cash via accounts receivable collections and taking necessary steps to obtain millions of dollars of supplemental funding from the State of California to sustain the District throughout this process.

This team worked hand-in-hand with the board, its legal counsel and the bankruptcy counsel over the course of the following 20 months to get the hospital reopened and the bankruptcy plan developed and submitted to the court. This was all while simultaneously assisting the District board as it directed the research to find an operating partner, working toward the resolution of numerous lawsuits, seeking and obtaining operational financing, and marketing the District's other properties for needed cash flow to assist with financing the District as it moves forward.

One of the most critical efforts was to work with the board in rebuilding community relationships and trust. This included working to develop relationships with consumer groups and federal and state licensing authorities, as well as rebuild relationships with vendors who were owed debt and the doctors who had left TRMC. In the meantime, there were local and state investigations that required hundreds of hours of dedication to address. Wipfli provided significant leadership in all of these matters.

Wipfli worked with the board in creating a request for proposal (RFP) for management services and negotiated with potential management companies. Adventist Health, a very strong nonprofit healthcare system, was awarded the management contract and worked with the Wipfli team for three very intense months to successfully reopen the hospital a full two weeks before the one-year deadline. As part of this agreement, Adventist Health provided a $10 million line of credit to the District to prepare the hospital for opening. In the November election, Adventist Health was rewarded with an 88% favorable vote from District residents, authorizing the District board to enter a long-term lease of the hospital with Adventist Health — a win-win for all.

The key facets that Wipfli brought to this engagement were effective leadership and planning, communication and trust-building skills, and extensive experience in all facets of hospital operations. It was the ultimate turnaround challenge, and it took an entire team effort led by the board, legal counsel, bankruptcy counsel, Wipfli, Adventist Health, physicians, the hospital foundation, employees and countless community members to achieve this tremendous accomplishment.

Schwieters Auto Group owns and operates three dealerships in central Minnesota. Since its owners began working with Wipfli over 20 years ago, they’ve built a trusted relationship that emphasizes strategic advice.

While the owners originally engaged Wipfli for accounting and tax solutions, they realized they could also use Wipfli’s wide range of consulting services to help them grow and pursue long-term success.

Using solutions like enhanced tax planning, streamlined processes, strategic benchmarking and M&A advice and analysis, Schwieters Auto Group has become one of the most profitable and successful dealership groups in Minnesota. Just engaging Wipfli’s cost-segregation studies has saved the group millions when acquiring a dealership — and increased its cash flow.

Each year, the Wipfli team performs year-end benchmarking analyses and planning in order to help Schwieters Auto Group build out the following year’s strategy and help make sure it’s continuously improving its operations. Wipfli’s ongoing communication with shareholders updates them on industry trends and explains the year’s profit distribution.

On the tax side, the Wipfli team provides comprehensive tax planning to fully leverage the changes in tax reform. The team also helps Schwieters Auto Group streamline the closing of its books and tax reporting and provides a full review of existing operations and potential acquisitions. This streamlined reporting process allows the team to be proactive in tax decisions and focus forward.

Schwieters Auto Group knows Wipfli is only a phone call away and is always available to talk strategy, from leveraging tax credits to planning an acquisition. With Wipfli, they can make decisions and move forward quickly — an essential need for a dealership group.

Located in central Montana, Robert E. Lee Ranch is a diversified cow/calf and small grain operation. The ranch is owned and operated by Bob and Kathy Lee, who purchased their first piece of ground in 1969.

At 70 years old, Bob and Kathy decided to formally transition ranch operations and the family property to their three children. But since only the couple’s son and daughter-in-law worked in the day-to-day operations, how best to proceed with the transition presented numerous challenges. What’s more, Montana’s high land values presented heavy tax risks.

The Lees were familiar with Wipfli from the firm’s involvement in the Montana Stock Growers Association. Knowing Wipfli had the industry experience they were looking for, Bob and Kathy asked for guidance.

In structuring the transition, Wipfli set out to establish a healthy balance between fairness and continued ranch profitability. This balance started by first understanding the family’s unique dynamics. By collaborating with the Lees, the Wipfli team explored the best ways to transition the business to the son and his wife as on-ranch heirs, while also providing for the two daughters as off-ranch heirs.

Also challenging was properly addressing the relatively high value of the ranch real estate. An outright sale would be disadvantageous and result in costly tax liabilities. Mindful of the more favorable federal estate tax laws, Wipfli structured a hybrid plan to transfer land control and ownership both as a gift now and as an inheritance later.

The Lees now have the peace of mind that comes with a well-developed transition plan. Their succession plan preserves both family harmony and the family legacy. It positions the ranch for continued viability into the next generation with the least amount of financial burden. It supports the livelihood of those family members still working to sustain the company’s operations, while fairly providing for remaining family members. And it saves potentially millions of tax dollars compared to the alternative of selling the business and dividing the assets.

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