Why Organisation is Key to Business Turnaround

Today’s guest post on the Business Fixer blog comes from productivity coach and ‘Getting Things Done’ expert, Ed Lamont from Next Action Action Associates. If you would like to contribute to the Business Fixer Blog then contact us here. And now, over to Ed…

Disorganisation is Costly

When a business is in a cash crunch, collecting overdue invoices is one of the things you’d expect to find pretty near the top of any list of to-dos in the organisation. Strange as it might sound, that is not always the case. One leadership team I heard about recently was so busy fighting insolvency that they forgot to prioritize collection of overdue payments. Big payments. Hundreds of thousands worth, that would have given them critical breathing space in the situation they were in.

On one level that is very human; in what feels like an existential crisis, many of us get tunnel vision. In this case, they couldn’t keep the wider focus needed to both handle the turnaround and keep the day-to-day business processes ticking over at the same time. 

Part of the challenge is that a turnaround situation exposes weaknesses in the business, weaknesses that were previously hidden by a healthy cash flow. One of the reasons some organisations get into difficulty in the first place is that they aren’t very organized at all. For many companies, ‘dis-organisation’ would be a better fit, name-wise.

The Need for Speed and Responsiveness

Another of the weaknesses that is exposed in turnaround is a lack of speed and responsiveness in both communication and action on the top team. In turnaround, there is no room for error, no margin for dropped balls, and any lack of responsiveness simply adds to the urgency of an already critical situation. Quite often it’s one or two key disorganised individuals who have a disproportionate impact on the rest of the team’s ability to execute under acute time pressure. These people are ‘blockers’ on things like decision-making, approving new designs or authorizing payments. When times are good, these things are an irritation. In turnaround, they can mean the difference between continuing to trade and going over the edge.

How to Handle the Chaos in a Turnaround

Being in turnaround is a high stakes version of what most people experience all the time: too many problems, coming at them way too fast. Without a systematic approach to handling all of the moving parts, it can simply feel like chaos.

Here are some simple, immediately accessible things that will help:

• Being hyper-clear on what the outcomes are for everything that has the top team’s attention. You want these outcomes to be described in a way that means that anyone looking at the results would recognise when they are completed – or not yet finished. If you are less than clear, you’ll lose time having your people working on what they thought was the right thing, but then needing to re-explain what you actually wanted before they can do it correctly

• Identifying the very next action is for each of those outcomes, and who has accountability for them. Building the habit – as an individual or as a team – of consistently clarifying the next visible action will save boatloads of time. Why? Because nothing can happen until someone has clearly identified what the next action is. Our suggestion is to do that systematically, as outcomes are identified, rather than wait for pressure to build before driving to that level of granularity

• Having a clear and accessible system for tracking outcomes and accountability and making sure that it gets reviewed weekly. Perhaps even daily when the heat is really on. Part of the challenge is that while in turnaround there are clearly things that have become super-urgent, there are a host of things that – if they don’t get just a little bit of attention this week – will become urgent in their turn in 2-3 weeks time. If we take our friends from the opening paragraph, it was because of the crisis-induced tunnel vision (and a lack of a team projects list…) that they had taken their eye off the ball and so couldn’t help themselves with liquidity in a crisis situation

In many cases, not doing things like the above is precisely how a company gets into trouble. Too many ‘non-urgent’ topics simply don’t get enough attention at an appropriate time. Many of our clients complain that they resent fighting fires in their businesses, until we help them understand that they are their own arsonists. How so? Because when we clear out their inboxes with them it becomes clear that they have been ignoring dozens of important topics because they have been so consumed by the urgent ones. 

Conclusion

Ideally, making sure that all key players know how to keep on top of their workflow is taken care of well in advance of any turnaround situation. If so, the leadership team will have an inbuilt fire alarm system to stay ahead of any self-created flames. But even when serious problems arise, a little focus on individual and team workflow will support greater responsiveness and offer a better perspective on the problems, and – like our friends with the uncollected invoices – potentially a bit of liquidity to provide a financial fire break in a difficult situation.