Turning around a company isn’t as straightforward as stabilizing finances, containing costs or fixing operations. More often than not, a turnaround goes well beyond the fundamental business issues, delving into areas such as employee attitude and temperament. From my experience, there are three key areas that must be addressed in order to create the best possible opportunity for success.
DON’T KID YOURSELF
When you deal in reality, you cut costs and rationalize your budget to fit the business trend–not what you would like it to be or what it used to be. Hey, it is what it is, today and literally. Start taking immediate steps to stop the bleeding and then give the business a chance to heal. Most importantly, put time on your side. You need as much of it as possible.
DOUBLE DOWN ON COMMUNICATION
Don’t hide bad news. Involve your organization and respect your people by communicating openly, honestly and often. Demonstrate leadership and build confidence by laying out business realities and the tough steps that need to be taken. Equally important, build confidence and alignment and support by outlining the recovery plan. The fact is, the collective force, energy, and belief in a better day that’s pervasive across the entire organization creates more than positive energy, it can literally keep people rowing in spite of the pain. And you know what they say: People aren’t scared of bad news, they’re scared of the unknown.
DON’T PLAN, PAUSE.
Planning is the consummate table stake. But when backed against the wall, many stop planning thoughtfully or strategically. What you have to remember is that while cutting costs, you also need to be planning for growth. Reviewing and defining your business or brand positioning can galvanize your organization behind a singular reason for being and start building back cultural glue that is often frayed in a struggling business. Once you gain buy-in from your board, the business positioning and strategic plan should be presented clearly, broadly and openly to the entire organization. But think fast and slow. Act quickly but methodically. The more strategic and thoughtful the plan, the more decisive you can be.
Are there more than three keys to a turnaround? Sure. Lots of little things have to happen. But I’ve seen a lot of brands get this right and as many blow it by not ensuring that everything ladders up to these three. Pulling a 360 is never an easy trick. But it can be mastered. And more importantly, it can pay you back in multiples.
T. Scott King is part of Zimmerman’s Retail Board Advisory