What's a Turnaround? In a nutshell, it's a systemic efforts to bring a company back to its normal state. That is, normal profitability. Profit is everything needed by a company to run another good operation after facing a tornado. Does it sound simple? Probably. But the fact is, turnaround is difficult. It's not just some smart effort to make a sexy breakthrough. It's really complex. Some say it requires a certain magic to conduct one.
The Process
If we look at the fundamentals, we will see that everything needed in conducting a turnaround is clear: find the disease, fix the process, and promote more.
The first thing, finding the disease, is begun with diagnosing the whole body of the company. What felt uncomfortable or wrong? Management can feel all of them. It is reflected firstly from the financial statements and other management reports. But sometimes a tiny itch doesn't instantly make us scratch. Depending on the significance, uncomfortable symptoms can steal attentions but not necessarily result in concrete actions. This is where management commitment is needed the most. Set priorities. Only by setting priorities right can we be able to recognize the real disease of our operation. Is it on the production section, administration, or marketing? Set priorities and diagnose well.
Second one, fix the process. Now that we have located our disease, we can see the way how to cure it. We can see how we should fix anything that goes wrong. Sometimes this stage requires high decisiveness ability because often we have to face unpopular issues, like discontinue a certain line of business, layoffs, reorganize, etc. Be wise and brave.
Last phase, promote more. What is meant here is business promotion to increase sales. Where do profits come from? Sales! Well, profitable sales to be exact. But no matter, sales are the key to making and gaining profits. Sometimes companies need to divert some significant amount of resource to promote sales. It's understandable. Revenue is the basis for providing profitability.
Efficient Yet Tough Strategy
Conducting a turnaround scheme is sometimes faced with unpopular issues like slimming to achieve better alignment. Employees fear this because it can mean layoffs. Layoffs are of course disastrous. Being out of job means having no income to live life. This is hard. That's why top management must consider this as the only last resort.
Prior to coming to that last resort, top management can apply some efficient strategy that focuses on alignment. Management theory says that when an organization is aligned well, information streams are run efficient. Each and every information within the company flows to the right person and on the right time, making operations move effective and efficiently. This is what has to be achieved. Should this be conducted properly, there should be no alternative for layoff.
Easy as it may sound, making a good alignment is not easy. Understanding the whole business process is simply not enough. We have to have a lot more information and knowledge to anticipate leaks that may potentially break the sought after alignment. There may never be enough resources to capture the whole information we can seek to find. Not only that, filtering all the information and extracting the knowledge is yet another thing to consider.
The answer to that is commitment and ever-learning culture of the organization. Make a vow on commitment and create a set of individual learning system that make custody of all the acquired knowledge the organization gain. Preserve all the knowledge to enable constant learning. The system needs to be separated from other systems in the organization in order to have a helicopter view of the whole business operations run everyday. This will make executives pleased.
Well, it is efficient, but it is tough,
The Process
If we look at the fundamentals, we will see that everything needed in conducting a turnaround is clear: find the disease, fix the process, and promote more.
The first thing, finding the disease, is begun with diagnosing the whole body of the company. What felt uncomfortable or wrong? Management can feel all of them. It is reflected firstly from the financial statements and other management reports. But sometimes a tiny itch doesn't instantly make us scratch. Depending on the significance, uncomfortable symptoms can steal attentions but not necessarily result in concrete actions. This is where management commitment is needed the most. Set priorities. Only by setting priorities right can we be able to recognize the real disease of our operation. Is it on the production section, administration, or marketing? Set priorities and diagnose well.
Second one, fix the process. Now that we have located our disease, we can see the way how to cure it. We can see how we should fix anything that goes wrong. Sometimes this stage requires high decisiveness ability because often we have to face unpopular issues, like discontinue a certain line of business, layoffs, reorganize, etc. Be wise and brave.
Last phase, promote more. What is meant here is business promotion to increase sales. Where do profits come from? Sales! Well, profitable sales to be exact. But no matter, sales are the key to making and gaining profits. Sometimes companies need to divert some significant amount of resource to promote sales. It's understandable. Revenue is the basis for providing profitability.
Efficient Yet Tough Strategy
Conducting a turnaround scheme is sometimes faced with unpopular issues like slimming to achieve better alignment. Employees fear this because it can mean layoffs. Layoffs are of course disastrous. Being out of job means having no income to live life. This is hard. That's why top management must consider this as the only last resort.
Prior to coming to that last resort, top management can apply some efficient strategy that focuses on alignment. Management theory says that when an organization is aligned well, information streams are run efficient. Each and every information within the company flows to the right person and on the right time, making operations move effective and efficiently. This is what has to be achieved. Should this be conducted properly, there should be no alternative for layoff.
Easy as it may sound, making a good alignment is not easy. Understanding the whole business process is simply not enough. We have to have a lot more information and knowledge to anticipate leaks that may potentially break the sought after alignment. There may never be enough resources to capture the whole information we can seek to find. Not only that, filtering all the information and extracting the knowledge is yet another thing to consider.
The answer to that is commitment and ever-learning culture of the organization. Make a vow on commitment and create a set of individual learning system that make custody of all the acquired knowledge the organization gain. Preserve all the knowledge to enable constant learning. The system needs to be separated from other systems in the organization in order to have a helicopter view of the whole business operations run everyday. This will make executives pleased.
Well, it is efficient, but it is tough,
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