Strategic fit – Make sure the turnaround strategy is in line with the business purpose
I am always surprised to see turnaround strategies that have at their core a complete reduction, let’s say in Marketing and Service departments, supporting a purpose that is based on increasing sales penetration and the provision of first class customer support. Obviously one is not consistent with the other and there is no chance of the purpose being achieved.
It seems common sense, but the turnaround strategy needs to align with the new purpose and the environment within which this is all taking place. The strategy also needs to be consistent with the organisation’s, and hopefully individuals’, values and beliefs.
I believe the purpose of any turnaround strategy should have at its core something everyone can get behind, and not just the shareholders!
It may be that part of the new purpose is to create wealth and security for all employees of the business and that once the Turnaround Plan has been achieved there will be a special bonus, or additional holidays (forever?), or share options or even share holdings for all? It needs to be something that will get that extra buy-in and appeal to the hearts and the minds.
There is a great deal of help available, both online and offline, on how to develop and implement turnaround strategies – simply put ‘planning turnaround strategy’ into Google and make your choice. TIP: Make sure you are not committing to any fees up front if you decide to take face to face advice as you should be able to obtain a good deal of assistance on a contingent basis.
You can determine the appropriateness of the proposed turnaround strategy by the use of an Environment, Values and Resources (EVR) fit review. The new strategy has a far higher chance of success if it is a good match for these three elements.
1. Environment
It is very important that the turnaround strategy aligns with the environment in which the business operates. For example a recruitment company needs to have great relationships with both clients and candidates. The environment within which the business operates should therefore be one of service and support where the organisation is seeking to provide a great fit between these two parties.
2. Values and Beliefs
The strategy needs to be consistent with the organisation’s values.
For example if you work at Apple, the ideology is one based on innovation of the product and that the customers will follow the product. The strategy therefore needs to incorporate considerable time and resource for research and development and creativity.
3. Resources
Ensure the strategy takes account of the organisation’s resources, and doesn’t ask the workforce to produce top quality products or services with antiquated equipment or poorly trained and un-motivated staff. Ideally you should produce a Resource Audit. If you don’t have your own format for this, the methodology to produce one is available as a free resource in our free eBook, The Guide to Company Turnaround and Refinance.
Summary:
The turnaround strategy needs to align with the new purpose and the environment within which this is all taking place.
The new purpose of the business that sits behind the turnaround strategy needs to be more than just making more for the shareholders and directors.
The strategy also needs to be consistent with the organisation’s, and hopefully the individuals’, values and beliefs.
As always, if you have any comments or your own experiences relating to this or any other area of turnaround strategy, please contact me at john.thompson@transcapital.co.uk or on 0845 679 8750.
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