How Leaders Reinforce the Human Side of Turnaround Management

Leading a small business, nonprofit, sports team, or busy corporation through a turnaround is part of the job for owners, executive directors, and CEOs today. Troubled business models are either failing stubbornly or being bought out by fresh-faced entrepreneurs armed with modern metrics and a better operational strategy.

Workplace pitfalls and land mines abound if your core strategy is not communicated honestly and completely from the outset to the entire team. Malalignment of job execution, product ROI and service ROE are the genesis of most fiscal failures.

When special forces teams go into harm’s way, each person has studied both the positive and negative outcomes of the mission relentlessly. Success for them is a matter of life or death, so they are happy to study their jobs in detail. Running a business or organization today is not so different, mathematically.

Malalignment of job execution, product ROI and service ROE are the genesis of most fiscal failures.

Bottom line: Poorly led, operationally flawed organizations are declining and crashing. Expertly led, well-executed organizations are prospering and soaring.

I’m grateful for a book entitled [easyazon_link asin=”B00ES28YFO” locale=”US” new_window=”default” nofollow=”default” tag=”achievstrate-20″ add_to_cart=”default” cloaking=”default” localization=”default” popups=”default”]The Medici Effect[/easyazon_link] (Johansson), because it changed how we view intersections, diverse collaboration, and the intersectional ideas that compound into innovation.

Turnaround management is the diametric process whereby positive patterns and outcomes are duplicated, and negative patterns and outcomes are eliminated –– aggressively and simultaneously. In my 24 years of experience, those organizations that embrace new intersections and the discomfort of change turnaround faster.

Poorly performing organizations, business models, even cities and towns are not intersecting well enough, or turning around fast enough. More specifically, companies in trouble are still sweeping five fundamental atrophies under the rug:

A) Lack of executable competitive advantage (poor organizational strategy)
B) Lack of honest, granular number-crunching (poor data and metrics analysis)
C) Lack of improved policy adherence (poor behavior or customer service, or both)
D) Lack of seasoned employees recruited and compensated based on merit, experience, and actual value to the company (not political ballyhoo)
E) Inefficient or non-existing accounting, legal, strategy, HR, PR, financial, tax, security, and other critical expert counsel or staff or policies in place (pending industry specifics)

Examples:

  • The manufacturing CEO unwilling to challenge its unproductive workspace orientation and supply chain — morale and profits dip consistently
  • The medical or legal practice partner unwilling to modernize its brand or marketing efforts — incoming patients / clients taper off continually
  • The corner restaurant or store unwilling to challenge its dingy surroundings, tired menu, and employee treatment — revenues and reputation steadily decline
  • The creative entrepreneur unwilling to clarify multi-hat-wearing job descriptions and compensation models — HR turnover remains high
  • The retail or gallery owner unwilling to get working agreements in writing because they feel contracts scare clients and good deals away (one cash-flow and vendor disaster after another) –– revenues and reputation steadily decline
  • Any company unwilling to embrace the top technology, equipment, training, or operational practices possible for adding new value

What is both exciting and uncomfortable is facing the positives AND negatives lurking within your organization fairly, squarely, and simultaneously. This process requires a fresh mindset, accepting revised policies and procedures, greater teamwork requirements, and even more consensus to handle the new work.

What is both exciting and uncomfortable is facing the positives AND negatives lurking within your organization fairly, squarely, and simultaneously.

Here are five intersections that any struggling business or organization can embrace, so as to begin challenging and coaching yourselves:

1) Strategy Implementation 

Leadership either has proactive strategies in place that are prospering your organization – or your business model is shackled by tired, outdated strategies yielding unfavorable outcomes.

2) Innovation Implementation

Leadership either has your team proactively researching and implementing sustainable innovation – or your organization is reacting to diminishing ingenuity.

3) Presentation Improvement

Leadership either engages stellar public relations, marketing, events, media, graphic design, and related branding efforts that result in innovative organizational presentations –– OR your C-suite tolerates lackluster, half-hearted presentations that look more like 1974 than 2015.

4) Fiscal Improvement 

Leadership, especially anyone is fiscal management, are either proactively ratcheting granular accounting best practices – OR your C-suite allows pinholes to exist in the hull of your ship. Self-inflicted accounting and legal woes are what plague US small business owners the most, especially small businesswomen.

5) Behavior Improvement

Leadership and your entire staff either exude patterns of polished behavior that add fiscal value to your workplace, community, and industry brands – or they are misbehaving liberally, especially small businessmen.

Takeaways:

  • Millions of everyday small businesses, nonprofits, industry associations, and middle-market companies produce wonderful products and public services, yet still operate poorly and chaotically in private.
  • Companies are growing by compensating stellar people for stellar work, and improving overall performance based on the latent capability and capacity being discovered inside their organization.
  • It can be uncomfortable for organizational leaders, busy executives, and small business owners to confront granular truths inside their struggling organizations, especially business models in the $1MM to $15MM space. The first step is to reach out for help, then form a plan.
  • The best organizations achieve better outcomes than their competitors –– in less time –– because they have excellent accounting, legal, and related expert counsel or staff in place to map out and help manage their escalating positives and negatives, simultaneously.
  • What will a POSITIVES + NEGATIVES analysis reveal honestly about your business model and future?
  • How can you form and begin to execute a turnaround plan within the next 30 days?
  • Put your mind into your company, your job, your mission, and your team –– as if your life depended on it.

 

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Copyright: gyn9037 / 123RF Stock Photo

Baron Christopher Hanson

Baron Christopher Hanson is the principal and lead strategist at RedBaron Strategy / PR (www.redbaronusa.com) in Charleston, South Carolina, and Palm Beach, Florida. A former rugby player, Harvard graduate, and expert on turnaround management and revenue growth, Hanson has written for Harvard Business Review, SmartBrief, and SwampFox considerably. Baron can be reached for advisory roles or speaking gigs via engage@redbaronUSA.com or over Twitter @RedBaronUSA

  • Tim Kuppler

    Excellent post. Many of the areas you reference go back to the lack of knowledge about how to develop and maintain a disciplined operating model. Your #5 (behavior improvement) impacts the other four areas and is the reason why effective work on the other four intersections will often fall short of the full potential. The one thing I would add would be the need for an operating model (an interconnected set of systems & habits) that provides a framework in which to operate and reinforce the behaviors needed for sustainable performance improvement. I assume this is part of your approach in some form.

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