December 31, 2018 Last updated December 26th, 2018 340 Reads share

How to Quickly Turn Your Sinking Ship Into a Profitable Business Again

Image Credit: Depositphotos

7 Ways To Save Your Sinking Company

1 – Eliminate Preconceived Notions and Become A Blank Slate

“When you’re first looking at a business or getting familiar with a business, you hear a lot from the founders or other coworkers or the news about what they’re problems are, what their issues are or what they need to do. I find that people often will analyze business and provide the answers or the solutions without ever really knowing the business intimately.” If you drown out the noise, the secret to a company’s woes is easier to hear.

2 – Focus On the People

“So many people make the mistake of looking at the software, looking at the hardware, looking at their reports, looking at all of the assets and not the most important asset initially, which is human capital—the human asset. All of those systems, procedures, and protocols are only as good as the people driving them and that is infinitely more important.”

Though common wisdom may show some personnel to be stars and others to be mediocre, Bristol said he’s found such assumptions to be false, pointing to his first rule of approaching an ailing company with an open mind because all of the internal employees and managers have some kind of agenda.

3 – Act Fast But Don’t Act Stupid

When quick changes need to be made to right a suffering company, those changes could be penny-wise and pound foolish. “Axing this process or this vendor or this product or compromising the quality of the product for one that’s inferior will lead to initial cost savings but in the long run could ensure that your business further deteriorates.” In other words, avoid going into panic mode.

4 – Do Not Hide From The Truth

When you’re planning a turnaround mission you have to be realistic about the timeline you give yourself to figure out if your plans are working and the business is indeed turning around. If you’re not realistic about the problems facing the company, your timeline will be off and your new strategy will be flawed. Bristol found himself faced with such miscommunication at Russell & Miller.

5 – Remember, A CEO Should Calm Nerves, Not Amplify Anxiety

Being secretive, evasive and opaque is a good way to turn up the volume on the rumors and whispers employees are already generating. “When the senior team is sneaking in and out of the office or holding secret closed-door meetings or saying one thing to one group and another thing to another—that just increases the acceleration t which the business declines.”

6 – Don’t Be Driven By Pride Or Fear

When things are going wrong, fingers get pointed. Too often CEOs or top managers have too much pride to admit their mistakes and the entire organization suffers for it. Their stubborn nature can be a hole in the bow of a sinking ship. “For me, it’s one of the criteria I use to determine whether I’m going to work with a business or not,” says Bristol. “If I see that the owner or CEO is very belligerent and half the lights are off in his building and he hasn’t drawn a paycheck in a while yet he seems unable or unwilling to truly change, that’s a huge mistake.”

But sometimes inability to change stems from fear, not pride. “It’s easier to dump a CRM or a manufacturing vendor than it is to let go of the person in the office next to them, or upstairs or downstairs, or to hire somebody that is more knowledgeable and experienced than they themselves are.”

7 – Allow People A Chance To Turn Themselves Around For The Good Of The Company (Cut Them Loose If They Don’t)

In a turnaround mission, Bristol says that when he sees a manager or employee behaving in a way that’s not in step with the company’s corporate culture and values, he will take them aside and tell them – in a warm and friendly manner – that their way of thinking cannot continue. “’This is the situation that we’re in, this is how you’ve chosen to respond to this situation and these are the ramifications of your actions’—and then just to hit it home I’ll repeat it: ‘you did this and the end result is this, and it has magnified this problem.’”

Unfortunately, some people have a hard time changing with the tides. “I talked to a VP about making the situation they were in better instead of worse and he was crying,” Bristol said. “He told me he got it. As I was leaving, I was going to shake his hand and he wanted to give me a hug.” But the change Bristol was hoping for in the manager didn’t quite take. “Sure enough, two hours later, the same action,” he remembers. “This company did not have the luxury of time to teach this person how to be an ethical person, how to be a good businessman, how to be part of the team that was going to rebuild the infrastructure, not dismantle it. So I let him go.”

Is Your Company A Sinking Ship? These Tips Could Be Your Lifeboat

If you work at a big company, look for:

  • New opportunities are evaluated and shot down based on their impact to the old legacy businesses. (See The Innovator’s Dilemma).
  • Managers are paid for making quarterly and annual targets, so they avoid investments that pay off in the future since they detract from their bonus numbers. As the business declines, they simply negotiate lower bonus targets each year.
  • You benchmark your performance against your direct, legacy competitors instead of the new disruptive entrants in your market. You think you are doing well vs. your competitors without being aware that you are competing in the equivalents of the Seniors Tour.
  • Mediocre employees are not fired since their managers know they can’t recruit better ones anyway.
  • When asked “why do you like working here?” your employees talk about the dental plan.
  • Your managers roll their eyes when you point out how new technologies like Apple Watches, Twitter, and Amazon Web Services will impact your business. They call them “toys” and say, “our customers will never trust their businesses to those!”
  • Your co-workers use Blackberries from 2009. They say, “I already know how to use it, and I don’t need that distracting new stuff.”
  • You spend the first week of the quarter talking about long-term strategic planning. You then forget about it and spend the next twelve weeks scrambling to make the quarter.
  • Instead of firing bad leaders, you create cross-functional committees to solve the problems those bad leaders created.
  • When those problems persist, you disband the committees and bring in consultants to solve the problems the bad leaders (then the committees) created.
  • All conversations about new grown end with reluctant middle management saying, “only if you give me more budget!” The budget never comes, and you all go back to what you were doing.
  • You integrate acquired companies so quickly that you destroy their businesses and their best people leave.
  • Or, instead of integrating the acquired companies, you keep them as independent business units and get no synergies. You integrate them in a hurry a year later during a cost-cutting exercise. The best people leave.
  • Your CFO spends 5% of her time talking about innovation and revenue growth and 95% talking about cutting costs. She says, “that’s my role here.”
  • The HR department thinks their job is administration, compliance, and keeping employees from suing, not ensuring the company wins in the market by having the best team.
  • To pay $9.99 for an Evernote subscription, you need to wait a year for the “Information Technology Steering Committee” to approve Evernote as a vendor.
  • You have a Chief Strategy Officer. People say, “I don’t know what he does all day.” He disappears and is not replaced.
  • You don’t target the best companies and try to hire their best people. Instead, you put three-page job descriptions on your website and wait for candidates to find them, fill out a form, and apply.

Multicultural business team having a conference stock image

Andrej Kovacevic

Andrej Kovacevic

Andrej is an accomplished digital marketing specialist and an avid internet technologist. Throughout his career, Andrej has combined his passion for cutting-edge technology with a keen eye for emerging industry trends to deliver customized marketing solutions to businesses and clients around the globe. He believes that the key to modern marketing excellence is a constant willingness to learn and adapt to the ever-changing digital world.

Read Full Bio