Business Turn-Around Management
By Jesse Kauffman, Lead Consultant, Everyday Business Resilience Group
Contact Jesse at 812-568-0515 and email@example.com
Welcome to the 3rd article in our three-part series on Business Turnaround Management! I hope you found the first two articles in the series helpful, and if you haven’t read them yet, be sure to check them out on The City-County Observer website.
For this article we’ll be looking at how we can apply what we’ve learned from identifying the causes of the business failure and quantifying those failures to understand what that truly cost the business. We’ll use this information to build a plan of action and then execute that plan.
After working through the processes of my first two articles you should have two key pieces of information: what caused the business to fail, and what the true cost of that failure was. Now that you have the primary causes of failure identified and what that failure is worth to the business, you have the baseline for what needs to be addressed for the business turnaround.
The first step to take now is to prioritize the business processes you need to change. Using the information you’ve generated on causes of failure and impact of those causes, you should be able to rank the failed processes by which ones cost the business the most. When that priority list is finished, you can then begin developing your change plans for each failed process.
Rank the processes according to the following criteria:
- Cost, in terms of contribution to the failure
- Cost, in terms of the money required to change the process
- Return expected, in terms of the processes contributing to cash flow
- Amount of time needed to modify or revamp the process
- Number of people needed to change the process, both dedicated and part-time
You can use the results from these rankings to plan which processes you need to revamp first. To keep things simple, for each process just add up the results of the 5 criteria. The highest score will be where you’ll focus your initial efforts.
Because this list will not only give you an idea of which processes are critical to the business and need to be revamped, it will also allow you to see which processes aren’t critical to the business and are taking up valuable resources, whether those resources are money, time, or people. Now’s the time to deprioritize, or even eliminate those low-value processes, so that you can conserve and direct your available resources to changing your high-value processes. It’s also a great gut check on how you may have been prioritizing an aspect of your business that doesn’t deliver much in the way of return on your investment.
Now that you know where to focus your efforts, it’s time to roll up your sleeves and get into the hard work of changing long-standing processes. Because the business failed, there’s a good chance that if you attempt these changes using only the people that were part of that failure, you will find it difficult to make the change you need. That’s not to say that the people you have can’t help make the changes needed, as they have first-hand experience with the business failure, and the value of that type of learning opportunity is too often discarded.
This is a great opportunity to combine the strengths of your existing employees and new or outside help. Bring in some new people with experience in your industry or the processes you’re trying to change, but who have not worked with your specific business for a significant length of time. Their viewpoints and experiences can bring valuable insights that can be combined with the hard-earned learnings of your existing team, allowing you to benefit from two critical skillsets that you need at this time:
- The ideas and creativity that a set of new eyes brings to the challenge.
- The experience and institutional knowledge that your existing employees bring to the challenge.
If you can put this kind of effort into changing the most critical process your business has, a successful business turnaround is practically guaranteed. Once you’ve revamped that first process, each following process you focus on changing will be easier than each previous process, allowing you to build up momentum and affect the business turnaround you dream of faster than you thought possible.
I hope you’ve found this series of articles useful for your own business, and I look forward to continuing to share insights and valuable information multiple times each month with you through The City-County Observer.
FOOTNOTE: Jesse has 17+ years of experience in industries including, appliances, plastics, nutrition, and pharmaceuticals, across all aspects of business operations. He and his wife, Josi, are proud parents of 3 wonderful kids and are continually working on their own version of a modern homestead on the west side of Evansville, IN
If you have questions please contact Jesse at 812-568-0515 or firstname.lastname@example.org