It takes courage and a degree of humility to recognize that your company needs to implement a turnaround strategy. The decision may have been months or even years in the offing; the swelling worry as you watch your expenses mounting and your coffers draining. Or, it could have happened seemingly overnight: one minute you were bringing in large deals and the next minute the debt collectors were knocking on your door. Either way, once the decision to implement the turnaround strategy has been made, you’re probably feeling a sense of relief and possibly an added sense of anticipation at the same time. After all, this is the “last ditch attempt”: a recognition that things need to change if they’re going to succeed, and a singular channeling of efforts and energy to make that new start.
Business consultant Gary Rushin points out the risks inherent to implementing a turnaround strategy once it has been decided upon. Problems could arise in one of three scenarios:
- The strategy is flawed
- The strategy is good, but poorly implemented
- The strategy is poor, and poorly implemented.
The risks denote a two-fold responsibility: to make sure the strategy is appropriate for your company’s challenges, and to ensure that it is properly rolled out.
Avoid short-term fixes
According to Rushin, ensuring that these two factors are correctly addressed involves a surprising approach to turnaround strategy management. He suggests that traditional management methods are employed rather than a new set of norms.
“Turnaround involves applying traditional management techniques mainly by following best practices in rather unusual environments,” says Rushin. “The business is distressed, both cash and time are in short supply and rapid restructuring is required. For the company owner or management, improving the short-term performance of the business is desired.”
But, says Rushin, to focus on this “would be a mistake.”
“The stage where the company is in the business life cycle and the attributes of the business will dictate the turnaround approach. The approach for start-ups and high-growth companies is different than the approach required for a mature low-growth business.”
You’re a doctor, not a paramedic
You could see it this way: instead of rushing onto the scene with a stretcher and a life support machine as you would for someone struggling for their life, treat this as a regular visit to the doctor’s rooms. Your diagnosis and treatment should be calm, holistic and long-term.
Don’t run in like a paramedic waving their mouth-to-mouth valve, rather walk in like a physiotherapist being visited in their own consulting rooms. Both your strategy and implementation should not be disruptive or short-term in nature. Your solutions may bring some instant relief, but most importantly they will provide healing and restoration in the long-term. Just as with a physiotherapist, the type and length of treatment should be dictated by the type of the business and its stage in the business cycle, as Rushin points out.
Take the time to diagnose
So what does this example actually serve to illustrate? In order to avoid the risk of developing a poor strategy or implementing the strategy badly, your diagnosis becomes extremely important. The ‘time spent in the doctor’s rooms’ needs to produce findings that are insightful and accurate.
To make an accurate diagnosis and recommendation for treatment, a physio needs to know the following:
- What caused the injury?
- How long has it been painful for?
- What kind of pain is being experienced?
- What exacerbates the pain?
Similarly, before identifying a suitable turnaround strategy, you will need to understand: what caused the decline? How long has the company been in decline for? Where is the company suffering most? Were there any particular triggers to exacerbate the negative condition of the company? Understanding these things will help you avoid a misdiagnosis, and help you ensure the turnaround strategy you develop is appropriate.
Just as there is only limited usefulness in consulting “Dr Google” when you have an ailment, so when your company needs a turnaround strategy, there is only limited usefulness in trying to determine what you need yourself. When you’re sick, you need a doctor; when your company is in decline, you need a qualified expert to assess your needs. If you are looking for such a person, contact The Finance Team. One of our experts can help accurately diagnose your company’s situation and help develop and implement a turnaround strategy that will see you experience the remarkable.