In previous blogs, we have talked about how to recognise the warning signs that your business might be heading into rough waters, and also about the importance of examining the wider business environment to determine the best positioning for your business.
The third element of creating a Turnaround strategy that preserves value and ensures you stay in control is taking a critical look at the business itself.
Take a broad view of business strategy
When implementing your Turnaround strategy, it is vitally important to take a ‘helicopter’ view of the operation, and to treat all functions equally. It seems obvious that you can’t achieve good top line sales without great sales people, and that you can’t recruit great sales people without a great HR function. HR can’t work without good systems, and no business can work without efficient finance operations!
Make sure everyone is pulling together
A Turnaround situation is an extremely stressful and often very lonely time. But it’s important to remember that you’re not doing it alone. Your employees will be very aware of problems in the business and a lack of information can cause undue concern, stress and a destabilisation of the business, just when you need everyone to pull together.
The culture of the business is everything here. Remember it is your people who are often the face of the business. If they believe there is a problem and they are not sure what you are doing about it, this will be communicated to your customers. Naturally employees talk to each other, and if no-one knows what is going on, morale will plummet.
Create a positive culture
One sometimes surprisingly positive result of a turnaround is that the situation can result in a culture where everyone is working together to get through, and to develop a revitalised business that has real value.
In my experience, there are 5 steps to help make this happen:
- Communicate the plan to the workforce in as much detail as is commercially possible, and explain everyone’s part in it.
- Make the turnaround of the business a real mission that everyone buys into. Make it Us Against the World, battling for survival.
- Make it worth it for your people as well as the Shareholders! Whatever the incentive is, it needs to be something more than being able to keep their jobs if the turnaround is successful. It could include additional holiday entitlement, a special bonus, a promotion, a directorship, share options, shares in the business, or shares in a new business. Whatever works for you and your people.
- Make sure that you do all the easy things better than you did them before. For example:
- Customer care
- Product and service quality
- Returning messages
- Doing what you have said you are going to do
As the owner/manager of a small to medium sized business, you have a lot on your plate in today’s financial environment. It is easy to try to ignore some of the issues facing you in the hope that things will pick up soon. But the sooner you face the problems, the sooner you can deal with them, and the sooner you will be able continue to grow and develop your more sustainable business.
There is no shame in asking for advice, only in ignoring the situation.
We’ve looked at several of the issues surrounding business management and turnaround strategies in our eGuide, “Company Turnaround and Refinance”. It’s designed to be a “one stop shop” for the kind of information you need, with expert and impartial advice for anyone with an underperforming business who is considering turnaround and/or refinancing options.
It’s written by a businessman, for businessmen who want to stay in control, preserve value, and get their business back to where they want it to be.
If you’ve got any ideas about how to preserve value and build a stronger business through a Turnaround, we would like to hear them.
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