3 Steps to Turn Around a Failing Company
Revenues falling? Customers and key employees abandoning ship? Costs overwhelming your reserves? Don't lose heart. There are steps you can take to turn your company around before it's too late. So says Grant Cardone, star of the reality show "Turnaround King" and author of several books including The 10X Rule. He's made his career going into failing companies and making them profitable again.
How does he do it? Here's his prescription:
1. Get the real scoop.
You may think you know why your company has hit the skids, but Cardone is quite certain you don't. (And it's definitely not the economy, he says.)
"In 25 years, I've never seen the executives of a company have the right idea of what the problem is," he declares. "It's like talking to a drug addict about his problems: He'll blame everything but the drugs." So he says, "Before I meet with the management team I get some intel on the company."
Cardone does this by experiencing the company as its customers do, as a secret shopper or other undercover customer. Doing this can be highly enlightening. "I did a secret shop at one of the biggest names in retail," he says. "I was there for 16 minutes, walking through 12 different departments before anyone said hello to me. At multiple locations, I couldn't get waited on. There was no engagement."
The retailer's executives had many other explanations for what was going on, he adds: the economy, a badly timed expansion, even the government. Then Cardone showed them video of his visit. "Their jaws dropped and all of a sudden everyone in the board room had this 'Aha!' moment."
2. Sell your staff.
To turn your company around, you'll need to do a fantastic sales job--on your own employees. "When we go into a company, I ask the executives: 'Do we have the people here who can execute our plan?' Typically the answer is no."
So what are you going to do, Cardone asks? Get rid of current staff and head into the marketplace to recruit dream employees--when your company's future looks uncertain? That doesn't sound like a good plan.
Instead, Cardone says, work with the people you already have on staff and turn them into your dream employees. "What is the ideal?" he asks. "Problem solvers, disciplined people who initiate on their own--all the things people put in employment ads. Request from the existing staff that they become this ideal. Train them and correct them to become it."
Of course, you'll have to convince them first, which may be a challenge if things have been going downhill, and especially if you've been drastically cutting costs. "Executives need to become master salespeople," he says. "I'm not talking about guys who can sell cars, I'm talking about masters."
3. Take one hill.
"I've never been in a failing business that didn't have a morale problem," Cardone says. "People are overwhelmed, overworked, and not getting paid enough."
Counteract the trend by rallying the troops around a definite and achievable goal. "Tell them you're going to focus on this one problem," he advises. "Then take that one hill. One victory will help you increase morale."
And increased morale will likely go directly to the bottom line, Cardone says, since every business rises or falls on how its employees interact with customers. "Politics or software, B2B, back rubs, foot rubs... underneath everything I'm going to find people--somebody selling something to somebody." The more those transactions happen, the more confident and motivated your people are, the more likely you'll be able to increase the bottom line. Until your company isn't struggling anymore.
Follow @GrantCardone on Twitter.