Manag­ing a turn­around sit­u­a­tion

Finweek English Edition - - Companies & Markets - John Mbuya, PhD, di­rec­tor: Fac­ulty of Man­age­ment & Lead­er­ship, Milpark Busi­ness School

HERE ARE six com­mon signs that a com­pany is head­ing for trou­ble. Care­fully con­sider whether or not they ap­ply to your or­gan­i­sa­tion. If you can an­swer yes to any of th­ese ques­tions, it‘s time to do some­thing about it. Owner or top man­age­ment overex­tended? Whose work are they do­ing? When they con­tinue to per­form func­tions that should be done by oth­ers (once the busi­ness has grown to a more com­plex level), they‘re over-ex­tended. They should do the work for which no one else is qual­i­fied.

Del­e­ga­tion is the key to deal­ing with overex­ten­sion. De­fine the owner‘s and key man­agers‘ jobs to clar­ify role re­spon­si­bil­ity. As­sess sub­or­di­nates‘ com­pe­tence; re­tain them if ap­pro­pri­ate – re­place them if not. Mon­i­tor key met­rics so you‘ll re­main in­formed about con­di­tions . . . without be­ing im­mersed in them. Is the em­ployee turnover rate ex­ces­sive? A sure sign of un­der­ly­ing prob­lems is rapid em­ployee turnover. This con­di­tion can be the re­sult of a faulty hir­ing process, in­ad­e­quate train­ing, poor man­age­ment . . . the list goes on and on. The price for ig­nor­ing this prob­lem is high: low morale, lost wages, re­cruit­ing costs, lack of pro­duc­tiv­ity, and ul­ti­mately, for­feited busi­ness.

You must un­cover the real causes of rapid turnover early on, and rec­tify them. Clearly de­fine job re­spon­si­bil­i­ties, per­for­mance ex­pec­ta­tions, re­wards, and scope of au­thor­ity. Con­cen­trate sev­eral lev­els of man­age­ment at­ten­tion to new em­ploy­ees (and those mov­ing to new po­si­tions) dur­ing the ini­tial days of the as­sign­ment. Talk to em­ploy­ees, but more im­por­tantly, lis­ten to what they say. Be as­sured, em­ploy­ees know when prob­lems ex­ist. Are com­mu­ni­ca­tions in­ef­fec­tive? In­ef­fec­tive meet­ings, man­age­ment in­for­ma­tion, or in­ter­de­part­men­tal co-or­di­na­tion can de­stroy a busi­ness from the in­side out – even as it is grow­ing.

If all that‘s ac­com­plished dur­ing ”bull ses­sions” is a lot of . . . well, ”bull” . . . then the blame rests squarely on the shoul­ders of the leader of the meet­ing. It‘s a leader‘s duty to limit the scope of top­ics dis­cussed, to es­tab­lish an agen- da – with spe­cific be­gin/ad­journ times – and stick to it. Limit par­tic­i­pants too – not every­one needs to be in­volved in ev­ery topic; what a waste of time and pro­duc­tiv­ity. Demon­strate or­gan­i­sa­tion by manag­ing your meet­ings and your team will demon­strate that or­gan­i­sa­tion by manag­ing your com­pany. Are goals un­clear? Chronic fail­ure to achieve stated busi­ness goals sug­gests a prob­lem far more se­ri­ous than a lack of per­for­mance. Of­ten, it im­plies a lack of clar­ity re­gard­ing the owner‘s goals. Busi­ness and per­sonal goals must be in sync. Fail­ure to achieve busi­ness goals also in­di­cates a fail­ure to se­cure man­age­ment team ”buy in”.

Take a long, hard look at the goal set­ting process. Set goals and hold man­agers ac­count­able for suc­cess. Goals must be clearly ar­tic­u­lated and agreed upon. If you can‘t step back and be a scep­tic, the goals have no sub­stance. And, if that‘s the case, how can you ex­pect your team to achieve them? Com­pen­sa­tion and in­cen­tive pro­grammes While it seems ob­vi­ous that pro­grammes should clearly and di­rectly re­ward for suc­cess­ful job per­for­mance, many com­pa­nies un­wit­tingly set up com­pen­sa­tion struc­tures that re­ward per­for­mance dif­fer­ently from that out­lined in the job de­scrip­tion. If this is your prac­tice: be care­ful what you pay for – you might just get it. Key client re­la­tion­ships de­te­ri­o­rat­ing? De­ter­mine if a de­crease in busi­ness from long time cus­tomers is due to poor mar­ket con­di­tions in their in­dus­try – or poor ser­vice from you. If it‘s you, you‘re prob­a­bly no longer meet­ing the cus­tomer‘s needs.

Man­age cus­tomer re­la­tion­ships care­fully. Cus­tomer needs change. Give spe­cific re­spon­si­bil­ity for nur­tur­ing cus­tomer re­la­tion­ships to all lev­els of man­age­ment – not just to the sales force. Get out and talk with the cus­tomer. How else will you re­ally know what the cus­tomer thinks? Few cus­tomers will call to tell you they are not go­ing to buy your prod­uct any more, they just stop writ­ing cheques. The key is to get in­volved.

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