I'll never forget April 2000 as long as I live. It was easily the worst month of my professional career. My firm, Peppercomm, had begun life five years earlier and, as a result of the "com" in our name, attracted millions and millions of dollars in start-up dotcom business (Note: We named the firm after my black Lab and the com was short for communications. But, we knew as much about dotcoms as Donald Trump does about humility).
We lost 33 percent of our business in April 2000, and had to immediately shift gears and re-position ourselves (or wither on the vine and die). We performed a complete turnaround, but I wish I'd had Tony Sarsam by my side.
Sarsam is chief executive officer of Irwindale, CA-based Ready Pac Foods Inc., a premier producer of convenient, healthy fresh foods. He also happens to be my client.
And he's a turnaround expert who, when he first parachuted into Ready Pac just over two years ago, took the reins of a corporation that was listing heavily to port and rapidly sinking.
The man followed a rigorous plan to get Ready Pac back on an even keel. As a result of his strategy, revenue grew for the first time in five years, and Ready Pac got back to break-even status. In his first full year, revenue grew by 10 percent and profits by over $17 million. Today, Ready Pac is a healthy, vibrant company with profit improvement of nearly 700 basis points. Sarsam has six tips to revive your ailing business:
1. Speed doesn't kill: Entrepreneurs must instill an immediate sense of urgency in an ailing company. You need to understand the basics of what went wrong and what the current state of the business is.
2. Assess the situation: Sarsam argues for a rapid, but thorough, assessment phase, and one that focuses on bringing the entire organization along for the journey. Evaluate whether the people in charge are capable of whatever turnaround task is at hand. If folks aren't ready, he says, you'll burn up in 90 to 120 days and not make it.
3. Change and nurture: You'll find you're either going to promote people, do field promotions, or move people into positions where they can better serve the business. But if you can't find them, go outside and find some. Once you've got the right team in place, engage and nurture them.
4. The Vision Thing: Decide what your new vision for the reimagined company will be and get your top team to buy into it first. Then, make sure everyone understands the new message. Sarsam says, "You want to grab people and motivate them to make the changes because they understand the situation. I also needed to instill confidence that the next set of investments would actually work this time around."
5. Mission Critical Mind Shift: You MUST establish a new mission statement to serve as a guidepost for the rapid changes you'll be making.
Sarsam jettisoned Ready Pac's old generic mission statement, "We will provide high-quality fresh foods on a national basis. Our valued associates are innovative and driven to exceed the expectations of our customers and consumers."
He replaced it with: "We give people the freedom to eat healthier." He says it's simple. It speaks to employees' hearts and tells them they're doing good things for consumers. It also motivated them to say, "My product has to be healthy. My product has to be convenient and my product has to be in arm's reach all the time."
That, my friends, is a cosmic mind shift. And, it's exactly what you need to do to turn things around in your business.
6. Discipline: While new processes and meetings may seem like a waste of time to a small business owner in deep trouble, the exact opposite is true. Sarsam said he held very few meetings as Ready Pac enacted the turnaround. But, he says, they were urgent and meaningful ones. He framed them based upon what the top team had agreed to do, and asked the following questions:
a. How are we doing? Are we happy or sad?
b. What are the next steps?
c. Who's in charge?
d. Who's going to do these things?
Here's a final word of caution from Sarsam: "I have never regretted moving too fast and have occasionally waited too long to make a leadership change or process changes. I have also learned that early successes can work against long-term success. When we set out to do something differently, and it works really well, we start thinking we are geniuses and stop looking for what is still flawed with that change. I have been burned a couple of times adjusting my laurels for too long."
Note to Tony: Where were you when I needed you back in April of 2000?
Note to readers: If you want to pull out of your death spin, start moving on Sarsam's advice yesterday.