How to Deliver a Turnaround

The business is in trouble. The finance director has bought some time from the creditors, and now you need to deliver a turnaround in the trading performance. Here are the five basic steps you need to follow.

1. Identity Check that everyone around the table is absolutely clear on what the business is about; "what you do" and, more importantly "what you don't do". A diversified or multi-segment business needs fast decisions on which parts have a future, and which would be better owned by someone else. The decision needs to be logical and simply explainable, to everyone in the business, so the ones that are staying know what the future holds. Move fast, move once, and move on.
2. Positioning Most turnarounds happen in the face of strong competition. To survive, the business must make consistent, and effective business decisions at all levels. Clear positioning statements help this to happen. Whether it's a value, price or customer promise, the clearer it is, the better. Often, reaching into a company's history and drawing out a founding principle that's relevant for the present, can not only provide clarity, but can accelerate engagement throughout the organisation.
3. People Change and uncertainty is an uncomfortable combination, and it's easy for those outside of the boardroom to become disheartened, detached and disengaged. Trust, empowerment and, above all, genuine appreciation, can go a long way to rebuild confidence. Recruiting during turnaround can be tricky too, but for key positions, it's imperative that you get the right people in quickly, particularly in operations, sales, buying and supply chain. Interims and consultants can be varied, so use your extended network, and make sure you bring in people that understand what's required in a turnaround situation - it's not everyone's cup of tea.
4. Focus Turnaround is about creating momentum. This means picking, and relentlessly focusing on a small number of big, meaningful areas to turn the dial, and delivering some impactful changes as early as possible. Set audacious goals for longer term programmes, and ensure the first deliverables are visible, tangible and widely celebrated. Above all, ensure the focus stays tight - spreading the focus too thin is the absolute key to failure.
5. Belief Inspiring belief is the single biggest job for an executive in a turnaround business. The biggest enemy to your success is the cynicism and resignation that grows daily in a failing organisation: it's a contagious mindset that saps energy, kills pace, and stifles change. "Whether you think you can, or think you can't, you're probably right" is a truism that is magnified for an organisation in turnaround. The CEOs most important role is that of chief believer and evangelist.

If you address each of the five areas above, drive hard on the pace, and never, ever stop convincing your colleagues that there is a future for the organisation, you'll be giving yourself the best possible chance to succeed.

(Pic: donielle cc2.0)