Deathbed Businesses When a Business Stops Growing. It Starts Dying. |
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A nationally recognized turnaround management firm
specializing in interim executive leadership, asset recovery,
investing in underperforming distressed troubled companies.
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iNDIVIDUALS. iDEAS. iNFORMATION. on Growth
By John M. Collard Too often, companies die unnecessarily because most business leaders haven't learned to
recognize the symptoms of oncoming illness in their business. Leadership hasn't had to
deal with it in the past and is ill equipped when trouble sets in. • The
obvious signs of business trouble are rarely its root causes. Losing money, for example,
isn't the problem; losing money is the result of other problems. The astute CEO recognizes
his infallibility and has the foresight to ask for help - before serious trouble
sets in. • If you can answer yes to some of these
questions, it is time to take decisive action. Whose work are you doing? When the CEO continues to perform functions that should be done
by others (once the business has grown to a more complex level), you are over extended.
CEOs need to delegate work appropriately. Define the owner's and key managers' jobs to
clarify role responsibility. Assess subordinates' competence; retain them if appropriate
and replace them if not. Monitor key metrics so you'll
remain informed about conditions, without being immersed in them. A sure sign of underlying problems is rapid employee turnover. Employees know when
problems exist, and the good ones will leave early. The price for ignoring this problem is
high: low morale, lost wages, recruiting costs, lack of productivity, and ultimately, forfeited business. Uncover the real causes early on, and rectify them. Solutions include clearly defined
job responsibilities, performance expectations, rewards and scope of authority. Several
levels of management attention should be devoted to new key employees (and those moving
to new positions) during the initial days of their assignment. Chronic failure to achieve stated business goals suggests a problem far more
serious than a lack of performance. Often, it implies a lack of clarity regarding
your goals, and usually indicates a failure to secure management team buy in. Take a long, hard look at the goal setting process. Set goals and hold managers accountable for success. While it seems obvious that programs should clearly and directly reward successful
job performance, it's remarkable that many companies unwittingly set up compensation
structures that reward performance altogether different from that outlined in the job
description. A word of warning if this is your practice: be careful what you pay for - you might just get it. If so, you are out of touch with the marketplace. High prices, unresponsive proposals
and giving more than is required of you are the typical reason companies lose bids. Commitment
to winning new business is essential to success; so identify targets early on, always
keeping a close eye on the customer's special needs. Bid to win, and then manage for profit and growth. Determine if a decrease in business from long-time customers is due to poor market
conditions in their industry, or poor service from your company. If it's you, you're
probably no longer meeting the customer's needs. Worse, you may not know. Manage customer relationships carefully. Customer needs, like your own, change.
Assign specific responsibility for nurturing customer relationships to all levels of
management, not just to those within the sales force. Products developed before market needs are assessed can waste resources and be
difficult to sell. It is less expensive to create awareness of a product or service
that meets an existing demand than to develop a new market for existing products or services that doesn't exist. Setbacks drain businesses of cash, time, and morale. When companies fail in one effort,
management tends to pull in its horns the next time out. The result? Suppressed hopes for
growth or expansion. Efforts fail because of inadequate cash, poor management, lack of
thorough market analysis or improper control systems. Ineffective meetings, management information, or inter departmental coordination can
destroy a business from the inside out, even as it is growing. If all that you accomplish during “Bull Sessions” is a lot of “Bull” it is clearly the
fault of the leader. It's a leader's duty to limit the scope of participants and topics
discussed and to establish an agenda - with specific begin and adjourn times - and stick to it.
Demonstrate organization by managing your meetings and your team will demonstrate
that organization by managing your company. John M. Collard
is Chairman of Annapolis, Maryland-based Strategic Management Partners, Inc., a nationally recognized
turnaround management firm specializing
in interim executive leadership, asset recovery, investing in underperforming distressed troubled
companies. He is past chairman of the Turnaround Management Association and
brings 35 years senior operating leadership, $85M asset recovery, 40+
transactions worth $780M, and $80M fund management expertise to advise company
boards, institutional and private equity investors, and governments.
For more information about Strategic Management Partners,
call (410) 263-9100 or visit www.StrategicMgtPartners.com
We welcome constructive inquires. More information is available if required. There is more to Strategic Management Partner's
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John M. Collard, Chairman We serve as experts for comment or quote, please contact us at 410-263-9100
We welcome constructive inquires, please send via E-Mail to:
Strategist.
Copyright © 2007-2008
Strategic Management Partners, Inc.
Deathbed Businesses:
When a Business Stops Growing. It Starts Dying.
ARE YOU OVER EXTENDED?
IS TURNOVER EXCESSIVE?
ARE GOALS UNCLEAR?
ARE INCENTIVE PROGRAMS YIELDING POOR RESULTS?
IS NEW BUSINESS WANING?
ARE KEY CLIENT RELATIONSHIPS DETERIORATING?
DO YOU CREATE PRODUCTS IN SEARCH OF MARKETS?
DO YOU HAVE FAILED EXPANSION PLANS?
ARE COMMUNICATIONS INEFFECTIVE?
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About the Author
About the Firm
Strategic Management Partners has
substantial experience advising corporations and individuals on the strategic
and mechanical issues of corporate development and governance, operating management and
turnarounds for asset recovery. Our principal has over 30 years experience in
P/L Management, Strategic Planning and Repositioning, M&A for Strategic
Advantage, Finance, Investing, Raising Funds, Sales/Business Development,
Building Selling and Marketing Teams, and Operational Auditing = In Public &
Private companies = In healthy and crisis situations.
We work with and support the equity capital community to provide assessment studies to determine the situation,
planning and strategy development to direct the company, crisis management to oversee that assets are
not squandered away, workout teams that recover assets, and board level
oversight to keep the client headed in the right direction.
We seek strategic alliances with private equity and recovery funds.
Contact Information
Strategic Management Partners, Inc.
522 Horn Point Drive
Annapolis, Maryland [MD] 21403
Voice 410-263-9100 Facsimile 410-263-6094 E-Mail
Strategist@aol.com.
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