Working exclusively with closely-held companies provides a perspective that can benefit other business leaders in similar circumstances. If your company is underperforming, look inside and outside for clues to addressing these challenges. Most external issues concern the obsolescence of the offering, changes in the way customers buy the offering, or the strong economic forces of a consolidating industry. A good example of consolidation, combined with changing buy patterns, might be car insurers like GEICO grabbing lots of online customers that were once the domain of a neighborhood agent.
External challenges are generally beyond the control of the business. But, internal matters, when addressed early can improve the outlook rather quickly. A growth or turnaround plan differs only in urgency.
Underperforming companies are confronted by operational deficiencies, have culture issues, or they lack a sufficient system for customer finding. At the core of most complaints from owners or business leaders about their operations, is that one or more of the three fundamental systems is operating ineffectively.
What’s your problem?
- Operational deficiencies – Consider the fact that customer satisfaction is the most important key to longevity. Your marketing sets expectations that the other parts of your enterprise must be able to bring to life. Consistently satisfying customer expectations depends on strong systems and dedicated people.
As competing these days is like an extreme sport, we are all typically up against really good competitors. Tackling operational weaknesses bends the satisfaction meter in your favor. Assess your internal structure like a franchisor might; qualifying every step and procedure in pursuit of the most efficient protocols.
- People problems – Your people dictate whether you fly high, or crash and burn. The “rank and file” wants to be led. Owners may believe that employees embrace the goals and feel invested in the organization, but most really don’t. Lead with a regular drumbeat of encouragement and personal interest.
Think like the coach of a professional sports team. Make sure each individual knows what is expected of them and how their work contributes to the goals of the organization. Hire the right people using clear criteria for job descriptions. Let go of underperformers while always on the lookout for talented people.
- Obsolete customer finding methods – No business lasts very long without a robust system for attracting and retaining customers. Continuing to employ grandpa’s old methods, or waiting for customers to call, “like they used to,” are not the cornerstones of a sustainable process.
Nail your value proposition, build on what satisfied customers might say about you and “stimulate” those with sales responsibilities. Develop a killer database/CRM of prospects, customers and friends of your company. Stay in touch with your “constituents” regularly and be the resource they come to rely upon.
Note to business owners – The leader is usually the one that has to change the most. As you address the 3 essentials consider what will be required of you. Leading will be your most important role. Ask yourself, how much personal change is needed and if you are prepared to see it through.
Steve Lauterback and his associates have worked with owners of privately-held companies to build robust business development platforms, optimize operational systems and improve the business culture. Our takeover partner option may be the right solution for your underperforming company.