|Excerpt from an e-mail to my wife during one of my turnarounds. (______ emailed me and said he will reach out to me later with an update. I am not holding my breath. So I am on the A of the PACE model, aka “How to do it without investment, or entrepreneurial stress for dummies.”)|
In the first three articles, How to Weed Out Apathetic Employees, How to Silence Negative Employees, and
How to Keep the Momentum Going, we have been pretty hard on the team. By now you may have brought in new talent as well as identified the talent that you want to keep. This next phase is tough. Remember that motivation comes from inside and as leaders all we can do is create an environment where people can motivate themselves. Leaders will emerge and they may not look like you. Just make sure the effort is focused in the same direction.
Turnarounds generally revolve around cash-flow. Limited resources create an environment that can either embrace defeat or creativity. As the leader you obviously want it to be the latter. Here is a management tool that you can use to help.
We developed this PACE model to help in key areas of the business. I am going to expand on the critical cash requirements. Each of these will look different based on your business needs and capabilities. Here is an example of what one might look like.
Once you forecast the trouble spots, utilizing this PACE model can help get you through.
o Utilize operational revenues and expense control to self-fund.
o Establish key vendor relationships that allow you to age payables during a trough.
o Defer compensation for active employees that are also shareholders.
o Short-term loan from shareholders.
The example used here allows you to expand or contract the model based on the dynamics of the business. Exercising a “no secrets policy,” everyone should be aware of what is happening to include the key vendors that you may have to lean on. As you move from Primary to Alternate, all of the others move up as well and you need to identify a new Emergency response. How important is a common language? Everyone I work with knows what I mean when I say PACE, even my wife when I sent her an update in the e-mail excerpt above. So when I ask “where are you on your PACE model,” the response I get gives me a good idea of our planning and execution.
There have been no fewer than seven times when I had to fully execute all four steps of the model. I could predict in each case if we weren’t going to make it with the step we were on and already had the next one primed to execute. After I first developed this I used it on subsequent turnarounds, even though everyone was aware of the PACE model , no one other than me had experienced its power.The excitement when we avoided catastrophe at each turn began to build confidence and encourage the model to be used in other areas such as; sales, succession planning, logistics, marketing and even manufacturing.
Can you see a use for the PACE model in your business?