HR & Management

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Five tips for a successful turnaround

5 Mins

1. Assess the situation

First step: you need to understand what got the company where it is now. When businesses fail, it is most often due to ineffective management. And most ineffective management teams will say that they need greater funding to correct the sagging business. They don’t: throwing money at a problem doesn’t work. The people who created the problem in the first place will not know how to fix it. Providing them with greater resources is a mistake: it wastes money and degrades employee morale. 

I’ve never seen a “bad” sales team, but I have seen plenty of lousy processes and plenty of low morale – both deal-killers that will destroy any company’s sales effort. Great insight can be gained by getting close to the company’s sales force, sales processes and customers to determine why things aren’t progressing to plan.

2. Define the culture

Failing companies usually have an ill-defined culture. Test this by asking salespeople to describe the company culture as they perceive it. In failing businesses, employees will not be forthcoming, and answers will vary from person to person; you’ll find that no two sales reps share the same description. 

At the heart of culture are the core values a company embraces – they’re a bit like the Ten Commandments. They are simple action statements that define the principles the company believes in, not fuzzy declarations that can be interpreted at the whim of management. They should be published and posted throughout the company. 

“Tell the bad news first, not last” was a core value we used at one company. If we were not able to make a customer delivery on time or if we expected to miss our sales forecast, we were expected to give fair warning.

Many companies say they do the right thing—but do they? And do they do it all the time? Core values define corporate culture. Companies without them tend to wander and underperform.

3. Identify the high-performers

People are the most important component of every – yes every – organisation. Powerful investment groups don’t invest in companies; they invest in people. In a business turnaround, you need to identify who stays in his or her current position and who goes. 

However, when looking at the long term, it isn’t so much who you fire as who you hire. To fill out a failing company with high performers, look for a track record of success. All high performers will have one.

4. Create a new vision of the future

When companies fail, employee morale and confidence plummets. Most employees in these situations want their company to prosper, but they don’t know how to accomplish it. They believe that they have done an admirable job and will resent those who say otherwise. Formulate a new vision and communicate it.

Don’t expect this to be an easy task – it usually isn’t. Most employees believe they have been on the right course, and they blame company’s failure on the ineffectiveness of other departments, not theirs. 

When you communicate the new vision, expect employees to fall into three categories: those who embrace it with enthusiasm; those who sit on the fence to wait and see how things go; and those who resist the change. The fence-sitters and the resisters must quickly reverse their positions and enthusiastically support the new vision—or find employment elsewhere. The sooner you convert these groups, the better. 

5. Develop a strategic plan

Once you’ve defined the core values, culture, and vision of the future, start putting together a strategic plan. Make sure you include the top management members who will be charged with implementing the plan. 

The planning sessions should not be held in secrecy. No one likes secret meetings that may define his or her future, and salespeople are especially sensitive to this. Once you’ve finished the plan, inform the sales team and explains how it affects their future. Powerful companies have solid strategic plans, and they effectively gain employee buy-in to them.

John R Treace has more than 30 years of experience as a sales executive in the medical products industry. He spent ten years specialising in the restructuring of sales departments of companies that were either bankrupt or failing. 

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