Amidst the daily social feeds, news stories and business conversations I observe, one aspect of business is masterfully concealed – a side of business that’s not so “grammable”. The reality is each quarter 1800+ Australian businesses become insolvent. Very few people are willing to admit business hardship, but it’s this very admission that can enable a business to turn around.
Every day we see start-ups rising to success, founders on the speaking circuit and hopeful investors injecting cash into businesses. But there comes a time when every organisation will face its tipping point that will question their future. Entrepreneurs should be speaking about this – every business will face the brink of failure. Through admission and successful management, owners can win back employees, guide learning and enable the business to ride this cycle. It’s those that prepare, and the business’ response that determines who overcomes it. Rather than ignore or hide the situation, its critical to face facts – it’s time to transform.
What we are seeing is blind-sighted failure and silo thinking. Entrepreneurs who have launched a lucrative commercial venture, expanded rapidly or monopolised a market position – ill-prepared or inadequately skilled within the larger-scaled enterprise, and taken by surprise when the success bubble bursts. Silo thinking is where individuals and teams undertake tasks without question because “that’s how we have always done it”. Enabling a culture of innovative thinking is critical to sustained success. Lacking, or solo, strategies can also overthrow a once successful operation. Contingency strategies are crucial to prepare for times like the loss of core clients, competitive market entrants and products. This prevents panic in the organisation and supports quick recovery.
As a business owner myself I can vouch for this, as not only do I work with business CEOs directly facing this, my own business experienced the brink of failure. The signals every business (and investor) should carefully observe are not just financially focused. If growth forecasts and cash injections are at the centre of your business model and decisions rather than customers, employees and services, then you may set your business up for a volatile future.
Secondly, businesses with a Teflon strategy – where nothing sticks and decisions are made on a whim – is another red flag. A simple example is observing a competitors marketing initiative and adopting a copycat approach with a short-term focus, “gut reaction” only and no data driven decision-making. Thirdly, a review of employee and customer engagement and retention will always act as a good indicator on the confidence in your organisation. If these are all trending downwards then this is a valid indicator to act now.
Here are my key steps transformimg your business:
- Build a transformation plan – making sure you have built in contingencies, so it’s flexible to navigate and foresee both internal/external market conditions.
- Communicate is key – take your team on the journey, giving them confidence on the business rationale and how it affects the organisation, creating acceptance to change.
- Centre decisions on data – make sure decisions are driven by data rather than reactions.
- Set out critical success factors by leveraging key KPIs – these should be aligned to each business unit – giving your team an insight, deliverable and ownership into overall transformation outcomes.
- Assess current organisation capabilities – consider People, Process and Technology to ensure the transformation outcomes are sustainable.
- Build the future organisation – plan for skills, roles, structure and capability.
- Make decisions – difficult decisions are necessary in any transformation, make and execute these in a humble, considered way.
- Build the transformed organisation – ensure this is undertaken with sustainability at its heart.
Alan Moore, International Business Transformation Leader and Director, RANDEM
