Every now then, we hear many stories about companies, businesses or projects falling apart because of low sales, lack of planning, competitive market, low morale, low market share or lack of creativity. And, that is the time executives try to save the company by taking unconventional approach or hiring new people which could save a company from dying.
Some companies reach their goal and successfully manage to come out of this situation, but most of these struggle and eventually die. There are many factors which lead to this situation within a company – lack of management, too many competitors, lack of vision, no long term goals, lack of enthusiasm by employees, no clear strategy and the list goes on.
Analyzing a company’s situation
Let’s try to analyze a situation of a company which is struggling to reach its target sales due to harsh trading conditions and ultimately making its solution driven business unprofitable.
- There is a lack of communication between higher management and the employees because of the old organizational and hierarchical structure and practices that are used within this organization on the whole.
- The Company is not successful in reaching out to its target consumers effectively and being able to convey the true value of its products to them.
- Moreover, being in a flat market is making it even harder to differentiate its products in huge market space and rise in this competitive market.
- Management and marketing team is not able to focus on marketing the products effectively because of too many product lines.
- There is a lack of interest from the investors due to old strategies, no innovation, and same products in the market that do not appeal to customers anymore.
- Ultimately leading to low revenues and zero profits.
Steps that can be taken to save the business
Once said by Sun Tzu,
Finding the root cause of the problem that is taking your business/project down is an important aspect in order to save it. So, identify the problem areas or units first which are under performing and then follow these steps mentioned below:
- Identify the priorities
- State your assumptions clearly
- Frame your approach and create an action plan
- Setting clear expectation of what all the teams need to deliver for every project
- Create distinct goals and milestones
- Have a defined project roadmap visible to all the employees
- Know the possible pitfalls
- Have backup plans
- Choose your communication strategy for maintaining relationships
- Know the metrics to measure the progress
Below is an example of what a newly appointed head of a company planned to do during first 90 days in order to save and resurrect the company.
After analyzing this situation, we identified that there are certain key areas on which we need to focus immediately, re-evaluate and re-define the methods and practices that are not on par with the standards.
As a team firstly, business needs to Recognize our opportunities in target market and making ourselves aware of potential threat, taking a firm Choice to select strategies that will help the company to grow in this market and Align decisions to fit in this changing consumer environment
After this, the whole team should focus on building sustainable products that fulfill needs of the consumer in every possible way that distinguishes the company from the rest of its competitors and are easy for its customers to reach.
- There is a lack of focus on building right products for the right target customers.
- Customer value not clearly defined.
- Existence of wide range products but no focused product to fulfill needs of a specific set of customers.
- Lack of trust by the target customers for our products.
- Lacking differentiating factor to distinguish our products in the market.
- Lacking effective means for receiving customer feedback.
- Over-production of similar type of products with little or no innovation
- Lacking open communication channel between management and employees.
- Missing self-organizing and cross-functional teams within our business unit.
- Old methodologies and practices.
Plan of Attack
If there are certain areas for which immediate actions is required, then plan upfront and for other areas, work gradually to improve the inner structure that would help in delivering efficiently and gain the trust of consumers.
Initial 30 days – Learning and growth perspective
(People, Process, Structure and Technology)
60 days – Internal processes perspective
90 days – Customer and financial perspective
First Phase – During first 30 days, conduct regular meetings, multiple one on one session with employees to understand the company and the core values. Building a new team might not help if the company does not amend existing over-centralized structure and ill-fitted strategies. Seeing that the team built few successful products earlier indicates that company has right teams with right skills. Also, bringing new people right after the new head is appointed might arouse a fear or threat among old employees that could result in high churn rate. Analyzing company’s strengths and weaknesses to become aware of our target market and competitions. This helps to understand what is going wrong, what are reasons and why is company not able to reach its customers
Focus on analyzing previous years of sales that will help in finding the products that do not align with the vision of our company and focusing on what does.
Second Phase – Following 30 days, implement small changes within the organization to see short-term wins and focusing on goals that will help to boost the morale of its employees. If similar type of appliances are still being manufactured continuously but the sales are constantly declining, this indicates a lack of consumer interest. Therefore, eliminating the products from pipeline that do not fit company’s vision.
Steve Jobs opted for a similar approach in 1997 when he returned to Apple where he focused on removing the necessary products trying to capture all types of market. Instead, they produced only one product iMac line of computers that helped them in bouncing back and capture target segment of the market. After they focused on a specific segment, they managed to regain consumer’s trust and generate profits.
Third Phase – During next 30 days, switch from long cycles of development to working in an agile manner that helps in delivering fast and receiving adequate feedback from beta customers. By focusing a cross-functional team on streamlining the system, helps in reducing costs and increasing satisfaction among distributors as well as consumers. Lastly, regular surveys, retrospections by employees and customers to prevent making further mistakes, selecting the right path and pivoting when required.
Reach every household to a level where they become so comfortable using our products that they never feel a need to switch or stop using those products.
To implement this, re-define strategies: Purpose, Mission, Values and Brand.
All in all, achieving SMART business goals; that is being S- Specific, M- Measurable, A-Achievable, R- Realistic and T- Time bound.
- Limiting scope to the essentials
- Breaking down every work into processes that must have an owner and key indicators to track performance
- Eliminating excess processes
- Small agile teams for every aspect of project lifecycle
- Re-establishing new roles and responsibilities within teams
- Re-launching our website and products line in whole new attractive yet simpler way
- Targeting limited area to focus on initial target customers
- Switching to inbound guerrilla marketing strategies such as blogs, videos and online ads than regular approach
- Reaching minimum limit of sales by end of next 2 months
- Building and launching an innovative product to capture market
First phase – Project Routing, Team Analysis and Assignment, Internal Meetings – Introduction and Review, Technical Investigation
Second Phase – Revised Scope, Regular Team Updates, Revised Strategic Marketing Plans, Requirements and Design Workshops, New and Focused Products, Revised Website
Third Phase – Initial and Beta Customer Feedbacks, Target Customers Count, New Customers Acquired, New Investments Proposals
Project Roadmap with Outputs and Reviews
Initiate – Business Case, Business Requirement documents, Business Criteria
Envision – Preliminary schedule
Plan – Status Reports, Project Schedule, System Design Document
Manage – Status Reports, User Acceptance reports
Apply – Project Acceptance Documents
Possible Pitfalls or Risks
- The team might initially fear of switching to new methodologies, practices, and approaches.
- Confidence level of the team may vary while implementing the change in the company.
- There might be a delay in coming up with new plans.
- Employees might be overwhelmed with the new type of work.
- Domestic market might go down or lack of consumer needs.
- Profits might take time to reach visible figures.
Backup Plans or Mitigations
Keep training/mentoring the team and maintain open communication channels between all employees. Alternative plans and buffer time for finishing initial assessment teams.
Relationships and Communications
Answering ‘Who’, ‘What’ and ‘Why’ to the team helps in building strong relationships. To communicate new changes to the teams, management needs to hold regular meetings and conferences to let employees understand the purpose and outcomes of the decisions. Maintaining essential project related templates and guidelines such as project charter, description, status reports help in communicating the changes quickly and increase a level of understanding. Ensure all teams under a business unit use similar tools for communicating at any point. Tools may include e-mail, project management software, telephones, online chat, video-conferencing systems, teleconferencing systems or document management software. Allocate specific time during the day to ensure “Managing By Walking About” is achieved. An environment for open dialogue using straight talk and work ethics is required to maintain transparency within the system.
Productivity – In order to generate more sales that would lead to more revenue, the company needs to measure at what rate the product is accepted by consumers to the rate of production.
Cost of Quality – Estimating the amount of money company lose/lost due to ineffective products.
Customer Satisfaction to include repeat and lost customers (30%), revenue from existing customers (15%), market share (15%), customer satisfaction survey results (20%), complaints/returns (10%), and project-specific surveys (10%).
Other factors include – Increase/Decrease in Sales Growth, Requirement Performance, Employee Satisfaction, Project Budget Performance, Cycle Time and Time to market.
At last, reviving a business with a whole new approach to achieving our goals needs working in harmony and going together. Core values and mission should not be altered and continue to keep building products which customers love and want.
Teams need to collaborate with management to work towards company’s mission that will help them to achieve every milestone as expected.
Keep re-inventing the business strategies, bring new ideas to the table and communicate effectively to other team members, so that it helps in maintaining transparency within the organization, build products that consumers need, gain consumers trust and ultimately generate more investments from the investors.
Lastly, always remember:
“The business of business is people, not products or services. Take care of the people, and the people will take care of you.”
By Jarod Kintz