Over the last 3 years I have worked with many different types of people helping them to get their business back on track. There are many opportunities out there for cash rich investors so choosing the right deal is crucial.
The opportunity cost of working with a business owner who doesn’t share common values can result in lost time and money. I do not charge upfront fees, my remuneration comes in the success of the business being turned around from an insolvent liability to a saleable business.
It’s very much people first and business model and margin second, here is a summary of tips for a successful turnaround.
These steps need to happen during any major business adjustment and some of the pitfalls to avoid along the way.
- Assess the situation. Before a successful business turnaround can be implemented, it is crucial to understand what got the company where it is now. Providing that the company’s products or services are competitive, the issues affecting the performance of a sales team can range from poor management to an ineffective sales process to low morale, which is caused by any number of factors. Insight can be gained by getting close to the company’s sales force, sales processes, and customers to determine why sales are not progressing to plan.
- Pin Point the Problem. Ineffective management teams often say they need greater funding to correct the sagging business, but throwing money at a problem does not work. Those who created the problem in the first place will not know how to fix it, so providing them greater resources is a mistake: it wastes money and degrades employee morale.
- Measure performance. Metrics should not only tell company leaders where they have been but should also be used to gauge future performance. Management should be able to clearly describe how the metrics it uses will predict future results.
- Define a winning culture. Companies in need of a turnaround usually have an ill-defined corporate culture. When a company is charting rough waters, it is imperative that the sales team embrace a unified culture, one that will define success.Know your core values. At the heart of culture are the core values a company embraces. Core values are like the Ten Commandments. They are simple action statements that define the principles the company believes in, not fuzzy declarations that can be interpreted at the whim of management. They should be published and posted throughout the company. Employees should understand the corporate commitment to them, and that disciplinary action will follow their violation.
- Manage your most valuable resource with care. People are the most important part of any organization. Powerful investment groups don’t invest in companies; they invest in people. In a business turnaround, it is important to find who stays in his or her current position and who must find a position elsewhere. However, most failing ventures have poor methods of measuring individual results, so care must be taken in this selection process. Making this determination is critical; powerful managers surround themselves with high performers.
- Identify high performers. In the long-term, it isn’t so much who you fire as who you hire. To retain high performing employees, you must make sure that they can trust management’s word, that management has their best interests at heart, and that management is committed to distinction in all that they do. High performers want to be on a winning team, and if they think management can’t accomplish this they will look for employment elsewhere.
- Do damage control. When companies fail, employee morale and confidence erodes, and many high performers will look for employment elsewhere. In these situations it is imperative that a new vision for the company be formulated and effectively communicated to all employees.
- Create a new vision for the future. Don’t expect this to be an easy task. Most employees believe they have been on the right course, and they see the company’s failure as a result of other departments’ ineffectiveness. When the new vision is communicated, expect employees to fall into three categories: those who embrace it with enthusiasm, those who sit on the fence to wait and see how things go, and those who do not buy in, who resist the change and are open and verbal in their opposition. The sooner management resolves these last two groups, the better. The fence-sitters and the resisters must quickly reverse their positions and enthusiastically support the new vision – or find employment elsewhere. The sooner management converts these groups, the better.
- Develop a strategic plan. Once a turnaround-management team has defined the core values, culture, and vision of the future, effective strategic planning can begin. The process should include the top management members who will be charged with implementing the plan. The planning sessions should not be held in secrecy, as the sales force will always find out that management is conducting an important meeting and will become suspicious about why the meeting is being held. No one likes secret meetings that may define his or her future, and salespeople are especially sensitive to this. After the plan is finished, the sales force should be promptly informed as to the outcome and how the plan affects their future. Powerful companies have solid strategic plans, and they effectively gain employee commitment to them.