How To Revive A Business on a Downward Spiral – Part 1
By Nada Andersen
How long have you listened to the excuses of poorly performing economy and how much has it affected your business bottom-line in your reality? Did contracts dry up? Did your people break away from you to start a similar business, taking away your customers with them? Did a wealthy competitor come to hit you on the head with his money? Did you inherit a company that your forefathers created and milked until it came dry? Or did you come to Uganda from abroad to manage a business that was presented to you as the best thing since sliced bread – until you found out, once you signed a three-year contract, that the bliss is actually a dead duck?
Whatever your predicament, you can still draw a line, evaluate how much this company truly means to you, assess the challenge ahead and ultimately – through a lot of hard work and dedication from each employee – you can turn it around. Do I sound like a self-help book already? Trust me, best solutions fit on a couple of pages of paper.
It boils down to cruel simplicity with which you should look at the business in front of you, and how clear you and your employees will be in discovering, documenting and weighing these six simple steps:
- Situation Assessment
- Strategy Reform
- Talent Acquisition and Redeployment
- Product Revival
- Marketing Strategy
- Capital Injection
Finally, your determination to put decisions to work will decide on how successful you will be. Ask yourself, before you begin – is it personally and professionally worth it? What are the implications of your extra-commitment? Will your personal and family life suffer? What do you have to gain (because trust me, you have a lot to lose)?
- Situation Assessment
When you start talking to employees about the reasons for failing to stay afloat, they will talk about external forces like stiff competition, difficult market conditions, no purchasing power and therefore no product uptake, high taxes, high distribution costs etc. They will share insights in finest detail, including how it should be done and you should, indeed, ask yourself why it wasn’t done if it’s that solvable and simple. Most often, the reason is inside the very people who continuously find many reasons why not to produce results.
People most often fail to keep delivering because of the lack of direction, lack of proper management systems in place, lack of clarity on their own deliverables, lack of understanding how their role supports the overall organisation and so on. There are several areas you need to evaluate in order to get the complete picture. Hire a company or do it yourself, but ask these questions and get your answers first, before tacking anything else:
What is your financial situation?
What can you say about Customer Satisfaction?
What values does your product bring to customers and to the company?
What processes happen inside and outside the company to take product to customers?
Strong Vote of Confidence: Mbire Reappointed MTN Uganda ChairmanWho are the people that make all this happen and how enabled are they?
Is there an overall strategy that allows the company to live a focused life?
When evaluating company’s finances, have a conversation with your accounts department, your internal and external auditors, your lawyers and your tax advisers. That ‘s an awful lot of people who know all about your numbers. They can tell you, in total isolation from the rest of the problems, what are the areas of excessive spend, how much the company is in debt for, what are the tax implications of your various financial decisions and so on.
Check how your accounts department is booking various expenses and make sure all tax deductibles are appropriately considered. Many businesses fail for simply not filing returns correctly and on time, thereafter collecting hefty fines and penalties to pay. Ask if your accounts department has a clear policy and clear deadlines for filing all tax obligations and financial reporting.
Next, check the pulse of the person who brings the money: your customer. Do you have any, are they satisfied, do they trust your company and brands, are they profitable to you or just difficult? You can make some calls yourself. Reach out and ask for sincere evaluation of their relationship with your business and listen to their stories. Try and hear about what they want.
Are your products and services satisfying your customers’ wants and needs? Are you continuing to improve your products and cost-efficiencies through use of new technology and processes?
What do your processes look like? How do the inputs move throughout the organisation in order to create the product? What happens to the product once it leaves your premises, how is it handled on the journey to the customer? What is the payment process like? What about your internal processes like hiring, onboarding, training, promotions, healthcare, leave, termination, interdepartmental communication, rewards and benefits, bonuses etc? It’s overwhelming, isn’t it?
Now, look at your people. Are they the right people in the wrong places or the wrong people in the right places? Do you sense commitment and passion or you see discontent and grief? Are they respecting each other or you sense divisions, bickering? Are policies, processes and managers people-oriented? Do people show love for the organisation?
With all these questions answered and your notebook filled with your observations, facts and figures – ask the key question: does your business have a strategic direction?
This question is key and this is why I left it for the end of your evaluation process. Usually people start with seeking direction without understanding the inner workings of the business and the obstacles in the way. Establishing the strategic direction of the business is essential to move it forward. The new organogram of your company can be written out of the strategic direction. You as the CEO or top manager are responsible to see this happen.
The writer is the CEO of Advertising Agency Star Leo and the Chairperson of the Uganda Advertising Association
