How to Successfully Turnaround A Failing Business
How do you effectively turnaround a failing business? Many elements including less profits, bad leadership, and a crisis like Coronavirus can lead to a business failure- and it requires a strategic plan, objectives, and goals to complete a successful turnaround effort.
In this episode of the Page One Podcast, Luke Peters speaks with Andy Bailen on how to successfully turnaround a failing business. Andy founded 3Pe Consulting in 2009 and is an accomplished retail and consumer products senior C-level executive. He has an outstanding record of achievement in multi-billion-dollar companies as well as start-up businesses. Andy’s highly experienced in P&L management, strategic planning, business development, product development, global sourcing, finance, private equity, franchising, etc.
Listen in to learn the importance of involving all business stakeholders in the turnaround process for it to be successful. You will also learn the value of having great people working for you as part of your trusted team.
Key Takeaways:
- How a company’s leadership perspective can either make and break the turnaround efforts.
- The importance of talking to business stakeholders during the turnaround process, to help formulate the holistic view of a business existence then and now.
- The value of a robust balance sheet in a business for support during a crisis.
- The roles of a business’s leadership, teams, and departments in effecting a successful turnaround.
- How to use OKRs to measure goal effectiveness and teams’ performance accountability during the turnaround process.
Episode Timeline:
- [2:10] Andy explains how they work in turnaround, temporary retailing, and franchising development.
- [3:19] He names some of the big companies they’ve worked with like Blockbuster, KB Toys, etc.
- [4:36] How he turned around Party City’s bordering bankruptcy situation to a success story.
- [7:29] How growth for the sake of growth instead of profitable growth ruins businesses.
- [9:45] He explains how the leadership of a company impacts the turnaround efforts of a business.
- [12:03] The steps that Andy and his team take into account during the first week of the turnaround process.
- [15:23] Why cash is the biggest concern for businesses to raise a turnaround flag, and not the other metrics.
- [17:18] Andy mentions all the KPIs they use, leading with profits and revenue margins.
- [22:14] Why businesses failed during the pandemic due to lack of sufficient working capital.
- [24:03] How a business leadership contributes to its failure and what needs to be done to have a successful turnaround.
- [29:40] Andy explains in detail how they use OKRs to drive for goal effectiveness and teams’ performance accountability.
- [35:29] How not to overwhelm the team with many goals and instead start with the high return goals.
- [39:55] Andy advises business owners to hire great people and allow them to work.
Quotes:
- “In many cases, I found that leadership of a business just simply won’t face the reality that their business is either struggling or even failing.”- Andy [10:14]
- “Seventy percent of the time or so the companies are truly in trouble in losing money and burning through cash.”- Andy [14:40]
- “Many times, that senior leadership needs to change over to truly effect the successful turnaround.”- Andy [25:22]
- “You want to set goals around each element that goes into achieving the high-level goal.”- Andy [33:35]
- “You get much greater buy-in to the go-forward plan when you go to this turnaround effort collaboratively.”- Andy [34:25]
- “The one element of OKRs that I’ve seen people misunderstand from time to time is putting in immeasurable objectives.”- Andy [38:16]
- “Hire great people and let them do the work.”- Andy [39:55]
