Successful Business Turnaround Strategies – 10 Steps to Executing a Profitable Comeback
Accomplishing a successful business turnaround is much easier said than done. For a small business without access to government bailouts, Wall Street lines of credit, or national media campaigns, the challenge can seem downright impossible.
In the following 10 steps I want to share a simple sequence for managing a marketing-centered business turnaround.
1. Meet with key leaders (and board of directors or advisers if applicable)
Before any change program can take place in a company, there must be absolute honesty about why things are where they are. A management team that is grounded in reality is an absolute must if the process is to end well.
2. Meet with employees
Discussing the new situation with employees is usually one of the most anxiety-inducing aspects of a executing a business turnaround strategy. The dangers are definitely real. Vital talent might jump ship, or productivity-draining misunderstandings about the turnaround plan may arise.
My most important recommendation is that you involve employees during the formative phases of your intended changes by developing clear metaphors and story lines that illustrate your company’s strategic challenges and the set of strategic choices you face.
3. Meet with key customers
Meet with key customers (or call them) and draw out where their priorities are. Determine whether your business model and marketing strategy is clearly differentiated and perceived as uniquely valuable. If you find this is not the case, your earliest project is to develop a new brand positioning strategy and unique selling proposition (USP).
4. Scan competitors
Never ignore your competitors when crafting a new strategy or identifying a new marketing message. Mine your customers for competitive intelligence. Shop your competitors to identify areas of strength you can learn from or whether your organization needs to create greater divergence from their strategies.
5. Renegotiate vendor terms and financing terms
Make a list of your key suppliers and approach each to negotiate new terms. Don’t be afraid to put pressure on your vendors. Look for new terms in areas such as pricing, volume pricing, customization, value added services, deeper integration with your systems, etc.
You could also try sharing the nature of your challenges with the vendor. Before you take this approach with a supplier, verify that your request will not bring a negative outcome like a downgrading of your credit terms or status. Don’t share sensitive information if you think sharing that information could have adverse consequences.
6. Develop a Strategic marketing plan
Developing a strategic marketing plan is one of the most effective ways to execute a business turnaround. An effective strategic marketing plan expresses itself as a comprehensive marketing system within a business. It grants you greater management control by making marketing results predictable and predictable.
7. Create a Strategic Operating Plan From Your Marketing Plan
Asking the right questions can help you build a new strategic plan out of your redefined marketing direction. Some of these questions include:
- What key strategic relationships can you turn into quick alliances for demand generation or cost reduction?
- What human, technical, production and financial resources are needed to keep the promises made by your USP or brand positioning strategy?
- Are the people you currently have up to the task in competencies, attitude and motivation?
- What will be the key processes required to deliver on your new strategy?
- How will you link the new strategy to your human resources strategy, processes and your available technologies?
- Will the new strategic plan be sufficient to meet your earnings or revenue goals?
- What specific programs and projects will ensure that the new strategic plan is executed?
- What milestones or deadlines are associated with strategic programs and projects?
- Who is accountable for what program? Do they know and agree?
Use a rigorous process of questioning, debate, analysis and follow up to make sure that your strategic plan is grounded in reality and is indeed executable.
8. Deploy Your Strategic Marketing Plan
Never attempt to execute a strategic marketing plan before you have verified that your people and your operational capabilities are up to the challenges of your strategy and your message.
9. Renegotiate financing terms
Renegotiating your financing successfully is often a result of gaining the confidence of your bank or financing partners. Armed with all the research that went into your strategic marketing and your operating plans, you can go to your financial backers and request new terms or more money.
They will need to hear detailed and insightful explanations for why the turnaround effort was necessary and how the new direction will succeed.
10. Develop a robust organizational communication system
Business leaders are increasingly recognizing that the key discipline that differentiates successful companies from their struggling counterparts is a culture of execution. Strategic execution succeeds or fails on the quality of organizational communication.
Create reporting systems that supply key performance indicators more often. Develop a constant schedule of strategy sessions that encourage debate, punish inactivity, encourage intelligent failure, and hold people publicly accountable.