Managing a turnaround situation
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.