Just when companies were seeing the GFC as an event fading into the past, new pressures of changing economies and markets are now upon us. Some companies are reporting they are excelling in business growth, whilst many others are struggling to keep their doors open. For those involved in B2B markets, the pressure can be enormous as you attempt to arrest the challenges you are confronted with.
In research in the half-year just passed, Sales Focus International discovered an interesting emerging trend, in that companies often fail to identify or, more importantly, accept when they should be operating in survival mode and expose themselves to unnecessary risk by not acting early enough. A company that has crossed the threshold to business survival mode can be identified with these simple points:
Beware of the Toxic “If . . . Then”
Do you find yourself making these statements? “If we can just get through this quarter, then things will pick up.” “If this one deal comes through, then others will follow and we’ll be all right.” “If we can hang on until we feel the impact of the new products, then things will work out.” “If we can just get our salespeople to sell a couple more things each month, then we’ll end up being successful.”
As a turnaround consultant, these are familiar statements that I hear before a company shifts into serious business survival issues. You may be overly confident or helplessly hopeful, looking for the simple solution, the quick fix. You may not have experienced how much momentum a failing company can generate in the wrong direction before it is just too late to fix it.
I often review companies that have been experiencing downturns for two or three years before they think it may be a problem. They seek justification from the market conditions and the competitors, and some just seek consultation that it is just hard to be in business today. Once a company has lost momentum for three years, in reality, you are in jeopardy of being unable to respond to what you have to do to survive. The behaviour and decision-making in the business is in conflict with business growth.
Nothing will contribute more to your failure than your unrelenting dedication to your original concept of success, retaining your executive team’s mantra, retaining your company’s behaviours and decision-making, and believing you will be blessed with change just around the corner.
Money is not a cure for business survival
Companies often faced with the challenge of a downturn look for additional funding from bankers or other sources to alleviate the current experiences. There is an unquestioned belief that the business is right, and it requires just a little more revenue to offset debtor ledger issues and the need for investment in the business. They believe increased finance will free up the business to create more revenue. Wrong!
More money creates more debt, and rarely does a company need more debt to remedy top-line results and regain cash flow. Debt is most often a temporary approach to an often complex issue. The issue being your sales business is failing to deliver sufficient results to counterbalance the costs in the company.
Companies often compensate for the underperformance of the sales organisation with market and customer feedback and therefore relinquish the responsibility for the results. The fact is the company is out of alignment through its sales organisation and needs remedial action taken before any momentum will be regained. Only when momentum is in place can debt be repaid.
Before borrowing more money, ensure you have sufficient alignment, momentum, talent and discipline in place so that the debt can be repaid.
Working your way out of business survival mode
Most companies can turn around the results in the company and work their way out of survival mode in a reasonably short time period. The greatest challenge for any company is to have the discipline, understanding and focus on how that will be achieved.
Interestingly, during times of survival, companies often create the best products, reinvent themselves in the market and improve their operational efficiencies and performance capability. It takes conflict, disaster or impeding loss for companies to really challenge themselves to move forward. Otherwise, it becomes just a nice thing to do rather than a have-to-do discipline.
To shift out of business survival mode, it all starts with the CEO.
Taking a reality check
In order to survive, CEOs must dedicate the totality of their efforts to confronting the challenge. This is very difficult to do as often the company’s internal mantra seeks to console the CEO that all is well and you can expect things to change soon. CEOs must be able to decipher reality from internal noise. They must step back far enough from the coalface to gain a new perspective on what is occurring both within the business and the market around it. In this situation, look for misalignment rather than looking for opportunity. Often the pressure felt by companies is not necessarily only about market pressures; it is the fact the business is not correctly aligned with the market, placing unnecessary barriers ahead of it.
Make a stone-cold assessment of the real situation, no matter how unbearable the conclusion; it will be essential to business survival. There can be no room for denial, excuses or reliance on legacies or trusted voices or advisors within the business. You need completely objective feedback by delving deep into the business and understanding the reality that confronts you. The feedback should address not only the problem but also the solution to move forward.
With understanding comes confidence. One of the most important messages that I provide to clients is that if the resolution does not make sense or is overly complicated – then it’s just not right. Many people can cite problems. Few can provide real solutions. Often people recommend solutions that are complex, resource-hungry and take extended periods of time to deliver. My experience has taught us that if it cannot be resolved in under six months, then it’s the wrong solution.
Have dedication and intestinal fortitude for change
If you are going to survive, you are personally going to change, and your company must change. It goes without saying. You cannot continue on the same path and believe the results will be delivered. You must change your decision-making, your expectations of management and, importantly, your tolerance of time. Rarely does a market shift in your favour if you wait long enough and no change is required.
For some companies, this means a change that goes to the core of who the company is and how it goes to market. It takes a dedicated CEO with the intestinal fortitude to lead change as you steer the company in new directions, with new demands being placed upon the team reporting to you. Remember, a CEO will always be rewarded for delivering change but not for being captain of a sinking ship.
The path to survival is one that comes from a deep understanding of the issues, the changes required and a well-mapped path to success. It requires the right people occupying key influential roles in your organisation that can lead change and engage their teams in change initiatives.
Survival comes from change, not increased debt or denial.
If your company has experienced a flattening or decline in revenue for the past two years or more, you need to take action now to ensure you are not involuntarily entering business survival mode. Adele conducts Sales Improvement Review to provide CEOs with the hard evidence and facts of what changes are required to shift out of survival mode.
Adele Crane specialises in the review and development of sales organisations. Contact us today to discuss your specific business goals and assist you to shift from business survival to growth.
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