Turning Around a Failing Business - Part 1

Three years ago, I had the unique and special opportunity to turn around a failing business. It was my company's second office. The manager at the time was a brilliant clinical practitioner, but the management decisions that were made absolutely destroyed the company. At one point, the company was losing tens of thousands of dollars every month, and the next part of the story is my favorite. Read on.

My office is internationally accredited for excellence in rehabilitation. This is a very prestigious honor that we have maintained for 7 years. Three years ago, we were set to undergo our next accreditation survey, but the weather was a horrible icy mess. I was worried that I would be iced in the morning of the survey, so I decided to spend the night in my office floor so that even if nobody else was there to oversee the survey, I would be. Yes, I slept overnight in my office floor. When I woke up the next morning, I got dressed and ready for the survey team to show up (fortunately, they stayed in town overnight so they were able to be at the office that morning). My boss (the CEO) stopped me in the hallway and told me something that I will never forget. He told me that the manager of the other (failing) office said it was my fault his office was failing, due to some really ridiculous reasons that later proved to be false.

Recap: I just woke up from sleeping in my office floor. We subsequently received the maximum accreditation by the survey team. My office was making money. His office was losing money. I WASN'T EVEN LISTED ON HIS OFFICE'S ORG CHART. But, the problems were all my fault. Really? Jim Collins writes about this sort of thing in his book, "Good to Great". Only he writes about the opposite kind of manager who looks out the window for success and in the mirror for failures.

Anyways, to skip to the really good part - a few months later, the truth came out. I took over that failing office, turned it into a profit machine with the help of other managers, and it has just finished breaking records in net income for the last two years. I use the management principles in my blogs daily. These principles are the base line for how to get this sort of turnaround done.

For more on the details of how we turned office #2 around watch for Part 2 of Turning Around a Failing Business.

Think BIG!

The most successful people in our history have been big thinkers. Thinking big is a key ingredient to reaching huge goals. Instead of thinking incrementally, you need to think exponentially. My company just finished back-to-back record-breaking years. After reaching such a great accomplishment, I decided that I wanted to double in the next two years. So, I set a goal to double in the next two years. Simple. In order to reach big goals, you first must set big goals. Guess what has happened? The first 2 months of this year were double the average of the last 2 years. Setting big goals can be powerful. We'll keep it going in that direction too!

What big goals have you set for yourself and your business? Guess what? They aren't big enough, so set them higher. The pastor of my church, who is a very wise and great man, once said that God wants us all to achieve great things. He said that regardless of how big we think, it's never big enough. So, of course I look back at my business goal of doubling and I wonder how small that goal really is compared to my abilities. We'll sure see.

Get out of your comfort zone. Anyone can set conservative and easy goals. If anyone can do it, then it's not good enough. Be a little uncomfortable with your big goals. I want people to think you're just being cocky when you announce your goals. Good! Let them think that.

And, that leads to the next point - announce your goals publicly. You need to write them down, share them with others, and be held accountable for reaching those goals. Most people will work like hell to do what they say they are going to do. So, say it loud. Everyone in the organization, in your family, and your circle of friends needs to be aware of your big goals. Give yourself something big to live up to.

What's the worst thing that could happen by setting big goals - even bigger goals, announcing them and then working like crazy to reach them? Only good things can happen. Shoot for the moon and reach the stars. If I plan to double, but then only increase profit by 50%, do you think anyone's going to ridicule me? Heck no! I'll be known as the guy who broke company records 3 years in a row. I'll take that any day. Wouldn't you?

So, think BIG - BIGGER! Be careful though. This kind of thinking could make you famous.

Dangers of Financial Ignorance

We all love to get more new customers. Selling those customers a lot of products or services improves revenue. You can really ring that cash register if you get a lot of new customers and sell them all a lot of great stuff. Then, you get repeat business from lots of those customers and you've got the makings of a great selling machine.

If you don't understand how to read, analyze, and use your financial statements, you will be at risk of running that machine deep into the ground. You must know where your money (expenses) is going. Do you ever take the time to review your income statements? Do you even have income statements? For those of you who aren't sure, an income statement is nothing more than a detailed report of your revenues and expenses. It tells you what you are spending your money on (and how much) and it compares it to how much money you are making. The bottom line of this report is Net Income (or Net Loss if you aren't paying attention). For operational purposes, this is (in my opinion) the most important piece of financial data that you can use. A program like QuickBooks will let you enter invoices and print checks from your computer. It also lets you enter in your revenues. As soon as checks are printed, and at any interval, you can immediately run an income statement. You can view these as often as you want to - daily, weekly, and absolutely monthly.

To make sure your operation is making money, you should graph this information at regular weekly and monthly intervals. Graph your expenses and work like crazy to minimize these, except for anything that helps your company grow. Graph your incoming revenues and work like crazy to increase money coming into the organization. Finally, graph the bottom line - net income / loss. It is irresponsible management not to know where you are financially at all times. The income statement provides you with this data.

On the income statement, your expense categories need to be detailed enough for you to measure each individual category and find ways to reduce those expenses. A simple report with nothing more than a Total Expense number is practically useless to you operationally. With this only, how would you begin to figure out if something is wrong or where you have problems? So, give yourself plenty of detail, and certainly enough to effectively manage your financial operations.

You can not be blind to expenses, revenues, or net income. This is financial ignorance and this kind of ignorance will surely run your company into the ground.

Does Your Marketing Plan Address All the Right Areas?

A top-level marketing plan must address all areas of marketing, even the often forgotten areas. To evaluate the effectiveness of your company's plan, answer the following questions.

Who? - Who will your plan specifically target?
Where? - Where do you find your customers?
How? - How will your customers find you?
Why? - Why should your customers buy from you?
What? - What do you have to offer that differentiates you from your competition?
When? - When will everything in the plan happen?

How do you know?
1. How do you know which marketing efforts are working?
2. How will you track the ways in which customers find out about you?
3. How will you know if your marketing and sales teams are doing the right job?
4. What will you immediately stop doing?

What information should you use?
1. What has worked for you in the past?
2. What are customers telling you now?
3. What is your marketing cost per new customer, for each marketing pillar?
4. What are your strengths, weaknesses, opportunities, and threats?
5. What drives your company's economic engine?

What areas are missing from your plan?
1. Did you consider the impact of customer service on your current and future customers?
2. Does your plan contain any customer retention initiatives?
3. Does your plan address an increase of sales dollars and sales attempts per customer?
4. Did you consider your competitors' offerings?
5. How do your individual marketing pillars tie together?

Do you have adequate training at all levels of the organization?
1. How will you train all of your staff on customer service, retention, and sales?
2. How will you train your sales team to use influential sales tactics to increase customer value?
3. How will you train your marketing and promotions team to create killer headlines?
4. How will you educate all levels of the organization on the efforts of the other departments?
5. How will you ensure that everyone understands how to sell your products.

Your marketing plan will need to consider all of these questions. It will also include a complete list of all marketing, promotion, and sales efforts, along with a strategic time-table for each. The marketing plan is a complex piece of the organization's total strategy. A complete and effective plan is the necessary first step for the marketing team.

Be Fanatical About Training

It has been said (and I agree) that people are not your greatest asset, only the right people are. Well, assuming you have the "right" people in place, now it's your job, as manager, to make sure they can do the right job, the right way. To do this, you must be fanatical about training.

Training doesn't start when you have hired someone new. It doesn't even start when that person begins working their new position. No. Training starts when the manager decides what training materials and methods to use, when to use them, and how frequently to use them. Managers should create standardized training protocols, with standardized materials, that all people in the organization must complete, as a condition of employment.

Once these protocols and materials are available, then the decision of when and how often to train can be determined. The answer to this is immediate and often. Immediately train all new associates. Assign a pro to work with them in a standardized manner, 1-on-1. Test new associates on all training materials. Role play with them. Make sure they can do the job as easily as if they have been doing it for years.

Then, train often. Training is not a one-time event. The manager's job is to make sure all of the staff remains at the top of their game. New systems need to be trained along with older, existing systems. Use weekly meetings wisely and keep your staff working and thinking at a very high level by keeping them shart thru ongoing training.

Give staff relevant business topics to discuss openly. Quiz them. Give them new written materials to read and discuss from the internet. Ask them what problems they are having and what solutions they can recommend. Perform in-services on equipment, software, and communications. Emphasize customer service.

Educate the staff on an ongoing basis about exactly what it takes to remain a necessary and successful part of the organization's mission and goals.

A highly trained and educated staff will excel in every area. This staff will break records. This staff will be a REFLECTION of its manager. As a manager, ask yourself how you want others to see you when they interact with your staff.

To confidently answer this question, be fanatical about training.

Creating Successful Positions Within an Organization

People fail at their jobs when positions are not created properly, by managers, so that the position can be successful. The vast majority of business problems are system / position problems and not people problems. Poor management says that when a person isn't doing a good job, it must be that person's fault due to lack of ability or lack of desire. So often though, the reality is that people don't fail - instead the position was not designed well enough for any person to do a good job in it.

A smart manager knows that their own success depends on the success of each person they supervise. They know that a well-defined and solidly-structured job position will help to create the success they expect and that is expected of them as managers.

To create a successful position within any organization, follow these guidelines.

1. Define the position with a Mission Statement.
2. Define clear goals for the position along with indicators of success.
3. Fit the position into an (already existing) organizational chart.
4. Write a very clear and detailed job description.
5. Write routing steps and policies for the position.
6. Create a tracking system that illustrates problems and successes.
7. Choose the right person to fit the position.
8. Fanatically train the new person with written training materials.
9. Introduce and integrate the new position (and person) into the organization.
10. Continually follow up on progress and give timely and appropriate feedback.

First, notice that finding the right person doesn't occur until step 7 in this process. The rest is about the structure and definition of the position, not the person. Follow these steps and you will find that the majority of your employees will perform like all-stars. Give them the tools to be successful and you, as manager, will be successful.

Finally, realize that each of these 10 steps depends first on the manager's ability. Even step 7 requires the manager to be able to match the right person with the position, and even to be able to identify talented people in the first place. Lesson: the manager's abilities can make or break an organization. Use those abilities and these 10 steps to create successful positions that good people can be successful in.

Always Write Policies and Procedures When Giving Instruction / Training

I have seen managers "teaching" their employees how to perform tasks and going through great lengths to explain the procedures. Later, another employee will need additional training and that manager will explain the procedures to this person too, but this time with slightly different instructions. This continues until the manager has spent an enormous amount of time explaining the same procedures over and over again to multiple employees, all of whom receive slightly different "takes" on the training. What a huge waste of time!

Instead, these procedures need to be written up with very clear and concise details that any person could easily understand and put into action. Each job within an organization should have a written routing system. Standardized policies should be written that applies to all individuals throughout the organization. Combined, these policies and procedures help managers to give consistent instruction, allow employees to have written procedures to refer back to, and serve as the framework for future modifications when greater efficiency can be achieved.

Additionally, use email to distribute policies and procedures to all associates. When explaining a new procedure to one employee, take the time to send those new procedures to the rest of the office. Save time and effort by being an efficient teacher. Training is power in organizations, but the pinnacle of training is for the manager to be efficient in his / her teachings.

Secrets of Motivational Influence With Others

The ability to motivate people and put them in the mind-set to do the very best job possible and to exceed their beliefs about their abilities – limited or other wise, is key to achieving everything that you want to achieve in business and in life. A person who can effectively deal with people is a person who can accomplish greatness. Below, are the keys to achieving greatness thru other people.

1. Be nice, friendly, and likable.
2. Make the other person feel comfortable.
3. Shake hands, pat people on the back.
4. Give honest complements freely.
5. Be patient with other people’s differences.
6. Listen and never interrupt.
7. Make eye contact.
8. Let the other person be the only person in the room when you talk to them.
9. Be mindful of your body language and facial expressions.
10. Never talk bad about others.
11. Show interest in the other person.
12. Always consider what’s in it for the other person.
13. Never give insults.
14. Look for people’s strengths – don’t focus on weaknesses.
15. Love everyone.
16. Ask plenty of questions about the other person. People love talking about themselves.
17. Talk up the person to another person.
18. Boost people up. Make people feel important and valuable.
19. Be honest with people and be consistent.
20. Don’t assume the worst in people.

Professional Managers Needed

Businesses need professional managers who have the knowledge, experience, and special skills needed to grow the business beyond imaginable boundaries.

To run a company from its highest positions, it is not enough to simply pluck a person from the lower ranks based on their individual business unit’s production. How can an associate really be expected to know how to professionally manage an entire business without professional training and an instinctual ability to motivate others to reach beyond their unrealized potential? When that person does very well in his/her position, it’s absolutely wonderful when production from the business unit goes up. Does this however really translate into a person who should manage the business?

A professional manager should understand people and what motivates them to do great work. He/she should have an ability to intelligently supervise the other department managers. A professional manager must be able to understand the business' internal and external environments and develop winning strategies. Areas such as accounting and marketing are keys to successful management - not to mention the ability to drive customer service through the roof. Professional managers understand business tracking systems and they know how to grow the areas that make the business tick. They also know that only with the most efficient time cycles, can a business and its individual units function to their fullest capacity. The best managers can show empathy for individuals. That manager also measures people by their strengths and never judges them solely on their weaknesses. He/she knows how to put the right people on the right jobs and is able to prioritize work effectively based on each task's value. Much of these attributes can and are taught, but many of them are innate - otherwise, they may take years and years to master.

And, many more attributes exist for the professional manager. It is this kind of professional manager that businesses need to grow beyond imaginable boundaries.