Business Turn-around

     

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Turn-Around Strategies (Business Turn-around)

Organisation turn strategies come in many forms and understanding the drivers for change  is a key element. In addition effective and successful  turn-around strategies require an understanding and plan to address every relevant aspect of the organisations functioning before the actual core turnaround strategy is selected and implemented.

Drivers for growth

Whether your organisation is a commercial or non-commercial organisation you need to identify those drivers for radical change , normally associated with a turnaround,  ensure that there is a sustainable path for the organisation to achieve the turn-around organisation goals, some examples of turn-around drivers are as follows:-

  • The organisations performance history and/or projection indicate declining KPI performance
  • The investor valuation of the organisations value has been dropping (e.g. stock price)
  • A game changer  technology  has emerged (perhaps from a competitor)
  • Organisation performance compared with a competitor or benchmark is poor
  • There is a need retreat and consolidate position (e.g. exit a market)
  • The loss of a significant contract
  • The business model has changed in the Market
  • The obsolescence of a role or function in an organisation
  • The loss of investment
  • A change in Government and knock on impact on the public service
  • A significant shift in environmental conditions such as recession
  • A major international disaster such as an earthquake or political event requiring the  consolidation of the organisations position

These are just a few examples

Capability to re-structure or turn around

Every business operates in a context and structure that can either facilitate or restrict re-structuring, this can be as simple as the national employment legislation to the flexibility of internal systems to change to allow re-structuring .

It is essential that leaders and change managers understand the forces for and against change they are likely to encounter in growing the organisation. There are many considerations, here are just a few:-

  • Geo-political
  • Maintenance or Regulatory Compliance
  • Ability to re-skill staff
  • Lack of Investment
  • Culture & Morale

 

  • Current process and business model

 

Growth Strategies

The two big ones we think of are Downsizing and Re-positioning, but there are many others. Downsizing is often a key component of a turnaround strategy, with a need to re-align cost structure with available future revenues or available budget. Downsizing not only impacts those that have to leave the company but also those that are staying. It also impacts many if not all of the systems and processes depending on the target structure which will support the new business goals. Re-positioning has a change focus that matches a new internal organisation to a new external environment position that the organisation wishes to achieve.

Turnaround strategies can have many different components or elements and normally have a radical change agenda. Some components might include:-

  • Downsizing or Rightsizing
  • Re-structuring
  • Market entry or Exit (or both)
  • Move to in-sourcing or out-sourcing
  • Change the business model
  • Re-Locate
  • Spin out or spin in
  • Performance management change

Where HOMI fits in turn-around  strategies

HOMI is an ideal tool to guide leaders and managers in understanding the capability to turn-around performance and to create the readiness to ensure the turnaround strategy executes effectively and efficiently. Carrying out an organisation assessment/diagnosis provides information to management that they would not previously have had access to. By understanding at and organisation level and a unit level all core organisation dynamics management can identify potential barriers and potential supports for change and growth. Interventions can be taken in advance of main  change programs that ensure the successful implementation of a turnaround strategy. During the execution of the  strategy management will have tools to benchmark and measure progress. Of course the bottom line KPI’s are the primary metrics that indicate successful growth strategy implementation but having underpinning systemic metrics allows rapid calibration to maximise the success of the turnaround.

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