When it comes to business operations, poor or under performance , regardless the reason, it is a clear indicator something needs to change. Acceptance of this fact can be a hard pill to swallow for many boards, companies and even entire industries.
Staying competitive and agile continues to be the key to business success. That means continuous evaluation of products and services, business models, processes and technological advancements that can impact your market position.
Comfortable with the status quo, management may believe it understands its business better than anyone else. As a result, it refuses to look outside its own box for new ideas or to seek advice. Adopting this insular approach prevents the company from realizing its true potential. In the same respect, it gives management permission to revert to older ways of doing business, ignoring the fact that the industry and the market has changed. As a result, the company misses a golden opportunity to move forward.
Many turnarounds get railroaded by paralysis by analysis. Decisions are held up when an executive makes the case that further review is necessary. Although careful considerations of this nature are useful when a situation demands more clarity, this foot-dragging tactic is often a ruse for not willing to change. Obsessive analysis can also be the result of wishful thinking that things will get better and the urgency to change will no longer be there. Unfortunately, in today’s competitive market a company in jeopardy can’t afford to put the brakes on the turnaround process and expect to remain in the game very long.
Although every turnaround process is company-specific, here are some essential strategies AMC will follow for better and faster results:
Reluctance to change is often deeply anchored in the failure to fully appreciate the depth of the problem.
Keeping key players in the loop avoids ruffling feathers, which keeps everything on track and facilitates a smoother turnaround process.
Jumping to conclusions without fully examining every aspect of the business is a waste of valuable time.
Avoid an emotional approach that might cloud judgement and interfere with rational decision making. Ask questions to get a better understanding of the situation and pinpoint why the company is underperforming.
Every successful turnaround begins by focusing on the business model. For instance, is the company currently a high-cost/high-quality or a low-cost/low-quality model? This answer may have changed over the years due to product expansion market strategy or new leadership.
Not all non-controllable drivers impact the business or do so in the same way, and many can be overcome. Focus the majority of the energy on impacting controllable drivers. Many failed turnaround was built on a plan that hoped for better industry-wide pricing or increase market demand next quarter.
Employees need to know “why” before they can move forward. Therefore, be transparent and clarify the reasons for the turnaround, breaking everything down into bite-sized pieces that are easy to digest. Additionally, encourage all employees to ask themselves the same question: “How does my job impact the business model and how does this need to change to make the company more successful?” Provide opportunities for employees to share their answers and ideas, and listen to them.
Employees look to management for clues in how to proceed, so change from the “do-as-I-say to do as -I-do” attitude. During the turnaround process, adhere to the same expectations and policies expected from all employees . Adopting this stance is especially important when using the services of an outside turnaround consultant service. any change & turnaround assignment is as successful as the support it get from the clients management and it employees.
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