In another instance I took a company that had lost $4m in one year through bad implementation mistakes associated with their growth ambitions and in thirty months grew the company to the point where it not only achieved its ambitious revenue targets and international growth objectives but made a $22m after tax profit.
The reason for providing these two examples is that on the surface when taking a high level overview it’s interesting to note that both these seemingly different situations had similar characteristics. That is, both were in trouble, one with financial issues, the other didn’t understand that just throwing money at endeavouring to grow the business without well thought through and managed programs doesn’t work. However the real problem in both scenarios was one of poor leadership and a lack of focus at both board and executive levels.
So the question is how to address these types of problems and generate well controlled enthusiasm within both the board and executive functions focusing on achieving the ultimate goal of increasing shareholder wealth.
There are six principles which anyone charged with the task of invigorating a company needs to acknowledge and put into practise in various forms, which from experience I know actually work.
- Make sure from the outset that everyone knows you’re the leader and that your directions are to be followed to the letter. That’s not to say you shouldn’t listen nor operate an inclusive style of management but rather, certainly in the first few months, you need to adopt an autocratic style of leadership ensuring firm control over both policy development and implementation planning and execution. “People will follow strong leaders!!!"
- Directors and executive are either team players or they go. Individuals who can’t or won’t positively except the challenges of change regardless of their employment history or their individual value to the company if they are not committed team players and don’t share and support your vision they need to be moved on as quickly as possible. “You haven’t been appointed to be liked by everyone!!! “
- Within two months a dedicated strategic plan needs to be formulated and adopted utilising both independent advisors, directors and executives input. This plan should not be ridged but sufficiently flexible to accommodate market place and client reaction as the company changes its market and company profile but always with the end game of improving shareholder wealth as the guiding beacon to success. “The day the ink dries on the paper the strategic plan will require amending; nothing remains constant and the plan should be viewed not as being set in stone but rather as a guide and pathway to success!!! “
- Communication is the glue that holds everything together. A strong dedicated communication plan involving shareholders, directors, executive, staff and the market needs to be introduced from day one. Communication needs to be regular and informative, telling it how it is and where necessary targeted to specific groups “Informed staff is the catalyst to ensuring everyone is supporting and working towards the same objective!!!”
- Monitoring plan implementation and progress against set targets should be a board and executive task. There needs to be a collective accountability and responsibility for achievement with directional amendments made where ever necessary. Poor results should not be accepted and if necessary additional experienced resources should be applied to rectify the situation. “You can’t plan the future unless you understand the past which can only be recognised by a regular dedicated monitoring regime!!!!”
- Culture is always an elusive factor to box into an explainable discipline. However when you’re facing a situation that demands change you have to build a positive culture within the organisation based on achieving success which then fuels the desire for belonging to an organisation which is recognised by its peers as being successful. “ Pride in the organisation is a hugely motivating factor which is achieved by cultural behaviour demonstrating a collective willingness to strive to achieve results which are in access of the business targets!!!!”
Summary: There are other business principles such as the importance of cash flow and debt equity ratios, capital investment etc which flow and support the above six points. However get the six principles right and you’re on the right track to successfully grow and mature your business aspirations. From experience I can tell you that there’s nothing more satisfying and exhilarating as a business leader than turning around a company in trouble into a successful enterprise. You’ll suffer a few bruisers along the way but these are forgotten when the adrenalin rush of success kicks in.
"Directors and executive are either team players or they go. Individuals who can’t or won’t positively except the challenges of change regardless of their employment history or their individual value to the company if they are not committed team players..."