Turning around an ailing business will be a challenge not every CEO will want to take on or relish – but for those CEO’s who are entrepreneurial, it can be a welcome challenge. Richard Close, CEO of Briggs Equipment, offers some fundamentals twill make the turnaround a success.
A key rule is to ascertain on day one who are your bankers and who are your obstructers. Discovering who is with you and who is against you and establishing this as a priority will be key to deciding the top team that will sit with you around the boardroom table. Only then can you move forward from a strong position to take on the next stage.
Chances are with a challenge such as this, there will be many fires to tackle, but establishing which ones to tackle first seems obvious - although will involve some good judgement as to which are burning the fastest. Is the business running out of cash? You can implement measures such as the sale of inventory. However, if customers are fleeing it is a customer retention issue, which is a harder one to address but one which must be prioritised. Or maybe it’s low staff morale? Establishing the fires and the order of priority in terms of extinguishing them i.e. which is the most serious fire to put out first, is crucial.
When setting out to turn around a business, the agenda must also be clear. Do you want a long-term
Do you want a long-term strategy or short term win?
strategy or short term win? Each will require a very different approach and different ethics and so needs to be decided at a very early stage so that the right tactics can be employed.
During my roles in business turnaround, I have come across almost all of the challenges one could imagine, but the recurring one, and one which is absolutely vital to address, is that of staff culture and management techniques. It’s an obvious thing to say people are a company’s most important asset – but it is, and so one should ensure the culture is right for the business plan and model. Customer service has to be a priority and this will only be done with the right people. If the culture isn’t right, challenge it. Empower people, but also make them accountable for decisions.
However, be prepared for the response – staff may not feel they can make decisions initially as this may be a completely new concept to them and they won’t have the confidence. Keep communicating, make them believe they can do it and if necessary, set objectives to measure them against. Then slowly release them to do it themselves – it can almost be like a weaning process – and highlight to them where it has worked well. But a point of caution; be careful if you’re challenging their decisions. Giving staff free reign and confidence to make decisions but blaming them if it goes wrong is not a positive way forward.
Engaging staff as part of culture change is key and I’ve found the best way to do this is ‘walk the walk’ – get amongst shop floor staff and find out what the issues are. The ‘middle management concrete’ can be a tough one to crack, but by making allies on the ground to put pressure on this middle layer of management from below, as well as above, will make for a more cohesive workforce with a common goal. People may be lost along the way, and this is for the best as those who don’t adhere to culture changes will not be effective for the business in the future. The end result will be a stronger team that can aid in taking the business forward.
Turning a business around and transforming into a successful enterprise is hard work, I make no bones about that, but it is a truly rewarding experience and one on which many people with the right disposition thrive. It is an environment in which I have been involved many times over – turning loss-making businesses into profit generators.