By John Treace
I have taken part in many business turnarounds in my career, and time and again noticed the same problems, regardless of whether the reason for the turnaround was a relatively minor situation or a reorganisation after bankruptcy.
Here are the five steps that need to happen during any major business adjustment and some of the pitfalls to avoid along the way. While this article will focus on sales teams, these steps are of a universal nature and will apply to most departments within a company.
Five essential steps for a successful turnaround …
1. Assessing the situation
Before a successful business turnaround can be implemented, it is crucial to understand what got the company where it is now. Simply throwing money at a problem does not work.
Providing that the company’s products or services are competitive, the issues affecting the performance of a sales team can range from an ineffective sales process to low morale, which is caused by any number of factors. In these situations, I have 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.
2. Defining a winning culture
Companies in need of a turnaround usually have ill-defined culture. We can 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.
It is imperative that the sales team embrace a unified culture, one that will define success.
At the heart of culture are the core values a company embraces. Core values are 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. Core values define corporate culture, and companies without them tend to wander and underperform.
3. Managing people
People are the most important component of any organisation. Powerful investment groups don’t invest in companies; they invest in people. Most failing ventures have poor methods of measuring individual’s sales results, so care must be taken in this selection process as making this determination is critical.
4. Creating a new vision
When companies fail, employee morale and confidence is degraded, and many high performers will look for employment elsewhere. Most employees in these situations want their company to prosper, but they don’t know how to accomplish it. It is imperative that a vision for the company be formulated and effectively communicated to all employees. Powerful companies have sales organisations that embrace a vivid vision of the future and employ sales representatives who are confident in their management and in their employment with the company.
5. Developing a strategic plan
Once a management team has defined the core values, culture and vision of the future, effective strategic planning can begin. It makes little sense to begin strategic planning before these first steps have been accomplished.
The strategic planning process should include the top management members who will be charged with implementing the plan. Powerful companies have solid strategic plans, and they effectively gain employee buy-in to them.
Pulling off a business turnaround takes an intimate understanding of a business, including its customers, products, sales process, and employees. With the proper tools and an understanding of these five steps, you’ll be on the road to a successful and permanent business turnaround.
John Treace has 30 years experience as a sales executive in the medical products industry and has spent a decade restructuring the sales departments of struggling companies.
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