We remain in challenging times, and as such it is important to take a tactical approach to developing business strategies.
Although economic indicators suggest the likelihood of a positive turnaround within the next 18 months, now’s the time to get ahead of the curve and understand how to head-off potential problems through a series of selective solutions and delegation.
Within the aftermarket, I’m sure you’ll agree, are a variety of personality types, including those who attack each situation with creative solutions, and others who prefer to passively wait out the economic pitfalls. But wise is the person who applies reasonable tried-and-tested strategies-”not all of which are based solely on experience.
First, consider a few known facts. In a crisis situation, the leader of the business tends to be the first casualty, and frequently outside consultants are brought in to sort out the situation. Historically speaking, the reason many companies find themselves in trouble is almost always due to problems at the top.
But also consider that it is the inside leadership that is often best-suited to apply the strategies necessary to save the business once firm footing is found. Simple as it seems, internal chemistry aids in the turnaround and helps get the business pointed in a new direction.
Developing an internal support structure is paramount. Any solution must be one in which all parties can offer their support. Consider that you get just one shot at trying to turn a business around. Everything has to be up for grabs, and fear and tradition must not be allowed to inhibit action steps in the process of finding the cure.
It Starts at the Top
An area of business in which few of us have much experience is in turning around a faltering company before it implodes.
In harsh economic times, the issues of sustainability, cash flow, employee retention, expansion, advertising and branding are always on the leader’s desktop. In these situations, it’s frequently the job of the top person to immediately focus on leadership and recognize the pitfalls within the company’s inner chemistry.
The greatest difficulty the person at the top faces is the problem of analyzing the causes of a downfall with sufficient clarity and over a long enough period of time to strategize an effective solution. It’s critical that the leader have enough time to view the situation and correct the company’s path.
However, he or she doesn’t have to go it alone. Outside management consultants familiar with the aftermarket industry are recommended, as are local management professors at your local college or university-”consider these people as not only advisors, but also having the ability to direct from the outside. They can help reduce the time needed to find a solution for whatever is ailing the company.
The goal, of course, is to prevent the collapse of the business. Unfortunately, the elapsed time from the first business mistake to eventual disaster varies enormously. Very large companies can often carry on for a surprisingly long time before events overwhelm them, while in the case of a small aftermarket business, disaster tends to strike much more quickly. Time isn’t usually on your side.
What is certain is that both the stock market and banks have less and less tolerance for business mistakes, and the time available to demonstrate an effective recovery plan is becoming ever shorter. Moreover, business analysts and even the press can hamper efforts of a turnaround by correctly or incorrectly predicting near-future results.
Thus the strategy within any turnaround is to look at the people within your company who know the myriad problems that must be overcome and the actions that must be taken.
Again, an advisor may be the neutral person in this instance, helping to identify and plot a new direction the company can follow to survive.
This is also where being able to call on the knowledge, drive and enthusiasm of existing employees can be so valuable. This is obviously far more difficult when all of your employees are worrying about the future, and the best and most self-confident are hoping for a safer environment.
I repeat: the reason many companies find themselves in trouble is almost always due to problems at the top. I personally have yet to encounter such a dire situation that was caused solely by employees.
Employee dissatisfaction is largely caused by mismanagement or frustration. No employee actually wants to do a bad job, or to be seen to be doing one. Obviously, no employee actually wants the company to fail or to find himself faced with enforced redundancy on minimal terms.
Diagnosis and Solution
In a challenging economy you may find yourself managing a turnaround. The first things you must do are diagnose the problem and ensure you have the time it will take to carry out your solution.
For the diagnosis you’ll need every piece of information, opinion, and statistical analysis you can lay your hands on. And the view and openness of those on the shop floor are as important, or in some cases more important, than those at the top.
Individuals in these situations are astonishingly honest with themselves, and it is from this apparently new mass of opinion and fact that a first rough-cut analysis will appear.
The strategy has to be concise and simple, for it is essential that everyone inside or outside the company understands the aims. The details are best left to those who will have to deliver the findings.
It stands to reason that you can’t turn around a company by doing more of what has already landed you in trouble in the first place, but it is extraordinary how often existing management fails to question the strategy that has so obviously failed.
Consider that few individuals are so closed-minded that they won’t give you a chance if you explain your thinking, and in any case, no recovery plan is a single unique solution with no means to an end. The eventual solution you decide upon can, and must, be one to which all parties can offer their support. Remember that your leadership has kindled hope in those who work for you.
A positive strategy with clear delegation for action and a lot of trust in your employees can change things quickly. The next, albeit very difficult, action is entirely within your core group.
It is absolutely vital that everyone knows where he or she stands. Start with the key 10-20 percent who you are sure you need to keep as the core team. These are leaders in their own right. The exact number varies depending on the size of your business. But there must be trust and the ability to delegate within that core.
Don’t be trapped by the fear of lack of security on data. Bad news travels like lightning and all too often is far exceeded by rumors and ill-concealed notions. Think about where you are today, where you employees think the company is and the reality of it all.
Leading by Example
Those in ownership or management will likely relate that leading is no simple task and the roadmap is long and twisty.
Each personality within your company is personal. Each person is vital to the pull-through to the next round in the economy. Therefore, knowing your employees is vital to your overall success
Each person reads, hears and is evaluating the evidence linking the economy to their job and thinking about their future. Thus the lesson of leadership is not an easy lap but one that you must confront with openness, as it is probably the most personally difficult phase of all in moving your business vertical and ensuring its long-term viability.
Both inside and outside the company, you have to radiate confidence and realism while encouraging people to increase their speed of activity. You can execute action steps by removing the brakes, simplifying the structure and increasing your tempo.
The other aspect is your personal honesty. Be real but yet involved. Work by example. Work as a team and be creative as a leader. Also, knowledge is power as you forge ahead with wisdom and experience.
Additional time with your core is vital, as is the fact that the art of listening is as important as the art of the sale.
By taking ownership of a new strategy and plan of attack, you’re likely to see positive results with the new pace of action. Turnarounds are difficult, as is sustainability, but once it is evident you have started on the way up, there’s no limit to how far and how fast you can grow your business.
Making It Happen
There are certain action steps in the turnaround process. Many of us have experienced the cycle of an uncertain economy, but we can also conclude that a positive vision also yields a stronger tomorrow. The following action steps are essential to maintaining a positive curve to success.
- Act with certainty that people within your company, including your client base and your vendors, recognize the strength of your business; it’s an attitude within.
- Confront the economy and its current impact on your business.
- Resolve to be creative in your branding and continual outreach.
- Concentrate first on your diagnosis of the problem and ensure a reasonable time to execute your chosen solution.
- Ensure that a solution is one that all parties, particularly within the company, can support. Address your solution with your banker and advisors for input.
- Once you have decided the strategy, set your aim and developed a core team, then delegate intensively.
- Lead with reasonable respect and authority. Work as a team.
- Continue to build your brand. Advertise with authority. Be seen.
- Continue to develop your inside-out strategy. Be heard.
By understanding your resources within, you can challenge the economy and successfully continue to build your business. The aftermarket is a unique workplace. It is a culture, a community, and a vibe like no other.
Within the structure of you company is leadership. Also, attributes such as the human side of communication and delivery of your message are valuable factors that brand you within your aftermarket world.
Thankfully, there is the economy we have to deal with and then there is the aftermarket economy, which all indicators reveal is alive and healthy. Be sure your company is ready to go along for the ride.