Internal and external communication should be consistent, clear,
frequent and timely.
Revert to Zero-Based Budgeting
Today, zero-based budgeting (ZBB) is the buzz word around companies
looking to transform and manage growth at the same time.
ZBB is painful and time-consuming. Vested interests will fight in
their corners to the last. But this process can allow a business to focus
with intensity on what really matters and what doesn’t. By attacking
fat and overheads in this radical way, you can take granularity to a
new level. However, gone are the days when setting a cleaver to an
organization has lasting impact — many companies have already been
through several rounds of cost cuts.
Besides willingness to cut, companies need the knowledge and
experience to see where some savings can be re-invested or re-directed.
Growth and new shoots are always the key to ZBB working.
Stay Calm and Be Optimistic
You will likely find yourself under intense scrutiny. People will be
watching you very closely for signs of those twin imposters: hope and
desperation. So, remain cool and cheerful but always entirely realistic.
Even if you are scared, try not to show it. But by the same token false
hope, openly expressed, can be damaging. Try to look sharp and
behave professionally even if you don’t always feel it. It’s an overused
word but “authenticity” can count for a lot during turnarounds.
Make Sure You Have a Plan-B
The path to success — like love or happiness — rarely runs true and
straight. A fall-back position will always be a necessity. You should,
of course, not plan to fail. But business today, more than ever, is
filled with uncertainties. You must assess and refine your approach,
events and situation as the process unfolds. If the founders of Google,
Starbucks or PayPal had stuck fast to their original business plans and
dreams, we would never have heard of any of them. There is never
only one way.
Most turnarounds inevitably focus on the short term. But the best
transformations have a destination, a vision and a narrative that all
stakeholders can understand and know is for the long term. If the
destination plays to the heart of your business and is continuously
reinforced in the minds of all your people, then you stand more chance
of winning. abfj
MALCOLM MCKENZIE, a managing director with Alvarez & Marsal, is
co-head of the European Corporate Transformation Services practice and
previously set up and built A&M’s Performance Improvement practice.
symbols can you make use of to signal there needs to be
a change — a move of the head office? Does the senior
management parking lot look over-filled with expensive cars and gas guzzlers? Send quick and decisive
messages that things need to change.
In the meantime, never take your eye off the cash.
Often it is surprising how even large corporations are
obsessed by an intense study of a whole array of KPIs
and arcane measures and yet lose track of cash in the
business. Cash is king.
You’ve got to have a plan; Where are you going? How
are you going to get there? What does everyone have to
do to play their part?
It is important to have high levels of emotional
resilience, communication qualities, IQ, EQ (emotional
quotient), XQ (executional quotient) and integrity.
Ensure there is a good level of engagement and integrity
across the board and top management. And ensure they
all know where they need to go before embarking on a
journey that is going to take vast effort.
Set Out Your Vision and Choose Your People
The plan should be practical but it must also inspire —
what’s going to get better, when and for whom? Even if
the details have to change in response to events, your
vision can remain intact. Signal a change in behavior is
required and that you need people to recognize there is
a need to change. You need to force the pace and jump
start people out of a “business as usual” mindset.
Ensure the right leadership team is in place. Find
those within your organization who are up for change
— they may not necessarily be the existing leaders and
senior managers, and may be frighteningly young or
those who thought they were coming to the end of their
careers. But they must be the types who are not afraid
of casting aside the status quo and are up to do things
differently and with urgency.
Harvard professor Joseph Schumpeter famously
talked about “creative destruction,” but for every person
attracted by “creative” there are many more terrified
by “destruction.” Non-conformist, free-thinkers are
the ones happy to question the status quo. However,
most people are inclined to rationalize it as legitimate,
even if it goes against their own interests. If the world
is supposed to be this way, we don’t need to find fault
with it. You need to seek out the bold, original thinkers.
Keep Stage and Stakeholders Updated
You simply cannot explain your vision too vigorously
or too often. Get it out there and across all the channels — internal meetings, traditional media and social
platforms. Leave no doubt as to your intentions. It
doesn’t matter what the nature of the turnaround or
transformation is, it will go nowhere fast if you can’t
sell it to the workforce and business partners and
show momentum and progress along the way. And this
means all your stakeholders.
Most turnarounds inevitably focus on the short term. But
the best transformations have a destination, a vision and a
narrative that all stakeholders can understand and know is
for the long term. If the destination plays to the heart of your
business and is continuously reinforced in the minds of all
your people, then you stand more chance of winning.