5 Steps to Turn Around Any Struggling Business

business Mar 04, 2021

Turn Around Your Business in 5 Steps

  1. Get The Right People in the Room

  2. Start With The Customer

  3.  Create Clarity

  4. Understand Your Key Metrics

  5. Weekly Plan Review

Imagine living in a town with no police department, no hospital, no Walmart, and no crimes.

Two summers ago, I was driving through a small town in Texas called Higgins. If you have not heard about it, I do not blame you. No one has. It is a small town surrounded by nothing. 400 people call Higgins home, and I met 5% of the town population in 15 minutes.

Its downtown consists of vacant storefronts, old homes, empty streets, and good people. I needed to stop and to enjoy the quietness of the town, get a cup of coffee, and enjoy some Donuts.

I asked for a dozen donuts, and the clerk behind the counter gave me 13 donuts. I smiled, and I walked away thinking, this kind of service does not happen in big cities or big franchises. Every donut has to be counted and sold even though 99% of donuts shop throw over 20% of their donuts away at the end of each business day.

The clerk did not gift me one donut; she gifted me with an unexpected gesture of appreciation. I drove north out of the city, feeling happy and loved. I know most business people won’t dare to talk about love and business in the same sentence. I was one of these people that did not talk about love at work until last January.

Lead with Love 

I attended a conference called unconference, which was held in Dallas. I was sitting on the same stage with Alan Mulally, the former Ford CEO who saved Ford from bankruptcy. Mulally was not afraid to talk about love. When Patrick Lencioni asked Mullaly, how did you turn around a horrible company? Without hesitation, he said Love.

Right after taking charge of the company, he instructed his executive team to tell Ford dealers that they loved them. After the experience, one of the most powerful dealers said, “I felt the love, and I knew that the culture of the company had begun a transformation that would be second to none.”

Mulally did not claim that love alone can turn the company around, but he said that you could not turn around a company without it. What are the other components do you need to turn around your company?

Let me share with you 5 things you need to do to turn around your business.

1. Get The Right People in the Room

Get the right team in the same room and address the elephant that everybody is ignoring. Author Jim Collins popularized that leaders need the right people in the right place before they can move in the right direction. First Who, Then What strategy states, “When facing chaos and uncertainty, and you cannot possibly predict what’s coming around the corner, your best “strategy” is to have a busload of people who can adapt to and perform brilliantly no matter what comes next.”

Invest a lot of time identifying your key team players, formal leaders, informal leaders, and cultural ambassadors who can help you move the company forward. When you are in doubt, do not invite the person to the room; if it is not 100 % yes, it is a No. When you are trying to turn your company around, you do not have time for internal politics.

Some people will leave your company, and that is what you need. If someone is not ready to move forward, it is okay to leave. Sometimes it is easier to recruit change than to create it. If someone does not fit your vision for your company, invite them to leave the room.

The right people know their roles and responsibilities. They understand the risk of not performing their jobs and the reward if they perform exceptionally. They are not afraid to discuss tough issues, and nothing is off the table.

2. Start With The Customer

Meet some of your customers. Start a focus group. Ask them what change would you like to see. The best way to help your customers is to find out what they want and deliver it to them. As Shep Hyken said, “If you want to be successful? solve your customers’ problems.” Restaurants do not sell food. They sell a solution to the problem of not having enough time or knowledge to cook.

Keep the customer the focal point of your business. Jeff Bezos reserves an empty chair at every meeting that the company holds, “Bezos is famous for leaving an empty chair at the conference table and letting attendees know it’s occupied by the most important person in the room — the customer.” As Bill Gates says, “Your most unhappy customers are your greatest source of learning.” Learn what they want and deliver your solutions to them.

Everything you do should make it easier for people to do business with you. It should make your business more reliable and your services more accessible. Anything else is a distraction. Do not start marketing your products or services before understanding your customer's needs.

3. Create Clarity

Once you identify the right people in the room and determine that serving your customers is your primary goal, create clarity around your tactical goals. Everyone on your team should be able to answer six questions. Where are we going? Why do we want to get there? Who do we serve? What do we have to do? How do we behave? How do I fit in?

Employees should be able to articulate the company's vision and the purpose of why the company exists. They should know their exact roles and how to behave daily. If everyone knows the answers to these six questions, your company will never fail.

4. Understand Your Key Metrics

Most business owners ignore their key metrics. If you watch your team members interact with each other, you will get a good idea of your culture's health. However, if you track and analyze your financial numbers, you will have a great idea of your business's health.

Track and analyze your cash flow, net income, profit and loss statement, price point, gross margin, total inventory, labor cost, and occupancy cost. Do not make any decisions before looking at your numbers. It is a crime for a doctor to operate on you without looking at your biometrics. It should also be a crime for you to make business decisions without looking at your financial statements.

5. Weekly Plan Review

Creating clarity is about having everyone understand the overall plan and direction of the company. It starts with establishing annual goals, weekly goals, and a daily plan of action for each team member.

If you dislike weekly meetings, you can leave the room now. Meetings are the most important aspect of running your business, but you have to run them effectively. Patrick Lencioni believes that the best setting for evaluating executives is in a conference room while meeting with their team.

Meetings should do three things, answer important questions, check on the team progress, and hold people accountable.

Alan Mulally gave people a voice but also held them accountable. His primary vehicle for holding people accountable was the business plan review meetings he held weekly. Every executive had to attend this meeting. They reviewed their operational goals using color-coded status reports, “Projects that are on track or ahead of schedule are colored green, yellow indicates the initiative has potential issues or concerns, and red denotes those programs that are behind schedule or off-plan.”

When one of his executives resisted coming to these meetings, Mulally communicated the importance of these meetings and asked him to trust the process. Later on, the same person asked if he can skip these meetings. Mulally smiled and said, “That’s okay.” The executive was relieved and said, “really?” Alan said, still smiling, “Yeah. We can still be friends. But you can’t work here. It’s up to you.”

These meetings were the key tool that Alan Mulally used to turn around one of the world's biggest companies; if it worked for him, it would work for you. Trust the process.

If you follow these five steps, you will turn around any struggling business. This is a proven framework that helps you win faster. Get the right people in the room, focus on your customers, create clarity, track key metrics, and hold your team accountable. 

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