Prosperity out of Adversity – The Turn Around: 4 Key Elements of the Plan

Previously, we found that “Planning was essential“ and “A good plan, violently executed now, is better than a perfect plan next week.” However, in dealing with a turn-around or disruptive environment we need to add a few pieces to the puzzle.

During a time of turn-around you need to:

1.  Develop a plan to accelerate business growth - now
2.  Uncover hidden growth areas at your company
3.  Turn your balance sheet into a fortress
4.  Heighten the performance of everyone on your team

Law of Vibration - anything that exists in our universe, whether seen or unseen, resonates and exists as a vibratory frequency or pattern. The thoughts, feelings and actions we choose have their own particular rates of vibration. These vibrations will set up resonance with whatever possesses identical frequency. In other words, your thoughts are inseparably connected to the rest of the universe. "Like attracts like". As you choose good thoughts, more good thoughts of a like nature will follow. For us, thought is where it all begins.

We have our 1-page plan describing where the company needs to go, what you are going to do and now everyone knows the direction and metrics. If it’s not on the plan, then you and your people should not be working on it.

Let’s now look at 4 Key Elements of the Plan in detail:

·        Think Money In - NOT Money Out

Regardless of what some people might think, you cannot save your way to prosperity. Just cut overhead. You have to generate revenue or MONEY IN. So how can you get more MONEY IN?    - How can you excite the Customer and quickly generate positive cash flow?

- What new products or service, Sales and Marketing programs might you launch?

- Would replicating a competitive offering, not currently in your line, make sense?

·        Build a Fortress Balance Sheet

A lot of good businesses go bankrupt due to too much leverage or debt when it can’t pay its bills. Always a good idea to have plenty of cash and flexibility to borrow if needed. One can also use profits to take debt off the balance sheet. Make sure you create a cash flow statement and balance sheet that monitors cash usage.

If you are in a cash squeeze, identify all the issues that need to be addressed and where you can generate cash in the short-term. As necessary, discuss deferred payments with creditors. Just remember this the next time banks and other parties offer you attractive terms, and are telling you, you can leverage your business to a greater extent.

·        Clean House

You may think you have a pretty good management Team. But we typically rate people better than they are. The downside is that in difficult times, you don’t have the people to face the challenge or take the business to the next level. Going back to Continental, they let 50 of their 51 most senior executives go and hired 20 new people with the skills and talent they needed given the situation.

The Management Team around you will help you achieve the turn-around. You need to make the hard decisions. In a growth situation, this is even more important as most likely you don’t have the right people for the next phase. Many times you need different skills and “new blood.”

If you think about it, regardless of the size of the organization, a large percentage of a CEOs time should be spent on evaluating, developing and placing his talent in the right roles. If they are not doing well, not enjoying their job, it’s time to move them along.

·        Let the Inmates Run the Asylum

Once you have built that Fortress Balance Sheet and strong cash position, have your 1-page plan, know ow you are going to grow and generate money, have your Management Team in place to execute the plan, it’s time to let the Inmates run the asylum.

This will require defining and putting in place the proper incentives – sales, margin, sales and margin, etc.

Keep in mind the type of behavior you are trying to achieve. The 1-page plan defines what levers drive value – and these are the things you want to compensate.

Returning to the Continental example, they linked a monthly bonus to on-time performance. Continental was spending $9 million per month due to late flights (hotels, re-booking on other airlines, baggage handling). The incentive, if achieved, would cost $3 million. It was self-funding. They also incorporated a 15% profit share for all employees as part of their “One Team” strategy.

Make sure your plan includes these 4 key elements.

Motivation Tip # 7- Visualize Your Progress (and Your Plan)

One of the big parts of staying motivated is having momentum. Starting a locomotive on the tracks takes a tremendous amount of energy and power, but once it’s rolling it requires far less energy to keep moving. If you always feel like you’re having to restart your train—or worse, constantly jumping from one train track to the next—it’s no wonder you feel demotivated. You don’t have a sense of progress.

A way you can help experience a sense of momentum is to visualize your plan and your progress. It doesn’t have to be complicated. It could be just a series of steps on a whiteboard, or a bunch of post-its on your wall. To visualize a habit of making progress each day, how could you represent your plan in a visual way so you literally see the progress you make?

To assist you in these turbulent and uncertain times, as a valued member of my business network, I’d love to send you a FREE copy of my new book, The CEO Growth Mindset.

It’s a practical guide for CEOs, packed with tools for achieving sustainable results, increased profitability and value.

To receive your FREE copy of The CEO Mindset, click here:

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To your success,

Rich

Rich Kohler is the Private Growth Advisor To Aerospace & Defense CEOs who are looking to Boost Profitability and Organization Value. A former Fortune 500 executive with over 30 years of “street smarts” in business strategy, marketing, new business development, executive and leadership development, Rich works extensively with CEOs, Senior Executives and Business Owners at mid-size, privately-held and Fortune 500 companies to successfully identify areas that restrict profit and sales growth. 

?? If you are open to a different perspective to growing your business, contact me at 480-766-1772, or email me: [email protected]