Behind the Scenes of a Business Turnaround – The First Month

In our last post I pulled the curtain back on Week #1 of a business turnaround, focused on the first tasks to be accomplished, and the strategies employed to tone down the chaos and begin moving forward.

As I mentioned, the first goal is to get the production schedule locked down and then make sure that I’m the only one who can change it. I take a hard line on this. Why? To be successful the organization needs to have one primary focus and at this point that is the schedule. Everything else needs to be subservient to the schedule. My job is to exhibit the leadership to pull the organization and team back from chaos mode and into a new productive and profitable phase. To get there the schedule must be king.

The schedule is the center or hub of the operational wagon wheel. Everything that’s done by the organization is there to support the operations team and the schedule. At the same time, as issues surface that impact the schedule, I’m there working with the leadership team in laying out priorities and getting resources focused on the issues. As I listen to everyone involved, I can then begin to sort out the BS from reality.

What’s really important in the first month is to stay on course and not be overwhelmed by the constant distractions. It takes consistent, decisive leadership (and a certain amount of audacity!) to do so with an organization in flux where lots of people are not all on the same page. Change is hard.

Calming the chaos means tamping down the panic of “oh, this customer will be upset” and “we’ve never done it that way.” I often use my experience as a fighter pilot to offer some perspective because in that world, when things don’t happen as they should, people die. Period. So, in business, anything short of that is okay.

Another key to calming the chaos is in taking the emotion out of the challenge. Usually, things are so far out of proportion and people are in such a reactionary mode, it drives emotional responses. We need to keep things fact based.

I focus on getting the team moving forward by working the problem. By focusing on the schedule, the problems will start to surface as we work to keep on track, and by staying focused on the problem, and working together, we can focus on rectifying those problems. One problem and one step at a time.

It’s a hands-on, back to basics approach. In some ways it’s similar to asking a young child to clean their room. We’ve all seen them come out overwhelmed with the task, but we teach them to break down the task step-by-step. Okay, let’s put all the shoes in the closet. Dirty clothes go in the hamper. Clean clothes go in the dresser. Place the toys in the toy box. Next, get the sweeper.

Beyond a singular focus on the schedule, there are some basic rules of the road that are the same for every organization.

  • Safety first – We want everyone to leave with the same number of fingers and toes they started the day with.
  • Schedule – Are we on schedule? What is our on-time-delivery this week? Were there any orders that didn’t ship on time and what are we doing to get them back on track?
  • Cost – Are we beating our cost projections for the work we are performing? If not, what are we doing to get the cost back in line?
  • Inventory – Are we working on components to fill customer orders per current order book, or are we building inventory? Machine and people utilization is good, but building and holding excess inventory consumes cash and that is not something we want to do.

My goal in the first month is to cut down on the chaos by getting the organization to focus on the schedule, and being able to plan out for two weeks at a time. We’ll line out the schedule, set the priorities, and then monitor each element to make sure it stays on track.

Usually, at the beginning of the engagement, there are about 10% of the people who are on board as soon as I walk in. I quickly try to sort out who they are so I can try to expand the 10% to 20%. There is another 10% who are sure that “this” is never going to work, and I’ll just ignore them. Over time, they will either convert, live with the changes or leave. It’s their choice.

And the other 70% are skeptics, but as they start to see progress they come over and begin to join the team. Once people start to see the difference that staying on plan makes, there’s an “ah-ha” moment and momentum starts to shift.

In the last segment of this series I’ll focus on supporting and growing the leadership team who will take over the reins after I’m gone.