Troubleshooting22nd April 2013
Remember Sir John Harvey Jones MBE? His TV show in the early ‘90s, Troubleshooter, and a few successors that have updated the entertainment factor, apparently tell you much of what you need to know about Troubleshooters. Often they show the angry, mistrustful or tearful owners, through a magical process being led through the maze, transforming into re-motivated and joyful beings … with a little help from that essential re-brand and make-over to help them on their way!
Owning a business is an emotional attachment with few peers. Entrepreneurs are justly proud of the risks they have taken, of their achievements, and just like a home or marriage partner really want their business to look good, feel good, and reward them. But hazards will appear along the route, and sometimes we need to remind ourselves, and our customers, why the world is a better place with us rather than without us. Or sometimes the world just seems to be moving faster than us.
Even the largest, most successful businesses occasionally stumble. From public crises to quiet concerns over the performance of certain divisions, the important thing is to act accordingly, not seek to cover up the issue with bluff and bluster. Exercises in bravado can waste valuable time during which it would have been easier and less painful to address the issues.
It isn’t just about challenges or business in distress. There may be major opportunities open to a business, which for whatever reason it is unable to progress. So think positive, not negative!
But when do you know that things aren’t quite right…?
Besides anger, mistrust and tears, there are a few obvious indicators that may include:
- A decline in sales or the loss of a major customer.
- A decline in profitability faster than a decline in sales.
- A shortage of cash in the business to pay the bills.
- An inability to effectively compete for business.
- Concerns expressed by funders, or a breach of borrowing covenants.
More nuanced indicators may include:
- A decline in the rate of growth.
- A decline in customer approval ratings or enquiry-to-conversion ratios.
- Plenty of profit, but no real change in cashflow.
- An over-reliance upon selling goods or services that are readily available elsewhere.
- Challenges with suppliers, including static or adverse changes in credit terms.
- Changes in the market created by innovation or customer attitudes.
- Cost reductions not having the desired effect.
- An inability to invest what you want, when you want.
Recognise any of these in your business, and it may be time to invite in some help. Running a business is typically a full-time task, and it is only natural that occasional intensive support will yield positive results. No business leaders can hope to have experience in, and to have faced-down, the entire range of brickbats that life can throw at a business, and sometimes it takes an outsider to see the wood from the trees.
More than that, I have lost count of the businesses which were established for very worthy reasons, where the owners have little concept of marginal pricing and costing (both business essentials) or believe that cashflow improvement can be achieved through expansion (whereas the very opposite is often the case). Even when a business is going OK, a visit from the company doctor can be an enlightening experience!
What can I expect from a troubleshooter…?
So if calling in a Troubleshooter is a natural part of a business’ evolution, and should incur no shame, what actually happens?
- Listening: Any troubleshooter to fails at this stage should be for the high-jump. This is the opportunity to understand issues from the business’ viewpoint, and also to appreciate the extent of the challenges involved.
- Understanding: With the best will in the world, business owners are often good at explaining the symptoms rather than the cause. So what has been discussed needs to be understood in a wider context, tested, and analysed. This may involve research or discussions with management, staff, customers or suppliers, as it may take the concerted involvement, action or reaction by some or all of these to achieve the necessary turnaround.
- Identifying: There are likely to be a combination of issues that require solutions, some of which involve an “easy win”, and others which will be more challenging, perhaps requiring time, effort or investment. They need to be clearly identified through a logical, systematic approach.
- Influencing: It is all well and good agreeing what is wrong, but this effort will have been wasted if the necessary action isn’t taken. So the troubleshooter will look to propose and agree a course of action, using clarity, realism, diplomacy and assertiveness in measured combination to reach agreement, and then act!
What will a troubleshooter be looking to influence?
Depending upon the issues, an effective troubleshooter’s reach may include helping with:
- Service and product improvement, segmentation and positioning.
- Effective pricing and routes to the marketplace, with clear targeting and marketing.
- Reorganisation to enhance productivity and profitability.
- Day to day and long-term cash management.
- Enhanced motivation and teamwork, pulling together across the organization.
- Filling the void between an owner’s vision, their practical experience and leadership capabilities.
- Understanding risk, either through avoidance, acceptance, reduction or transfer.
- Communicating and securing the support of stakeholders, including family, investors, lenders and staff.
Many of these issues may just be modest tweaks, or they may require turning the business on its head.
How quickly can this be achieved…?
In an ideal world there is plenty of time, but reality often means things are rather more urgent. Sometimes crisis management is called for, and an intensive period of rationalization or support is necessary to action the priorities.
Changes must take their position within a clear agreed strategy, with reasoned tactics that everyone responsible for playing a part in has bought into. It is all too tempting for a business owner to prefer to take change more gently, or even worse to hope that things will be better or different in a few months. Change is invariably better now, not later, and decisive action is often preferred by staff.
There are no certainties, and any realistic plan of action involves execution risks as it hits the competitive realities of the marketplace. This is why modest change often goes un-noticed and has little positive result. So be ready to think outside the box, to re-invent the business, to commence a journey, to up-end the marketplace, all in the cause of securing a sustainable competitive advantage for your business.
Sometimes the right direction and results can be secured in a few discreet meetings, and at other times it may take years of involvement and supportive project management.
If you are wondering if it is really for you, just have a think:
- Would your customers really miss you?
- What is the potential for technological disruption to your industry?
- Without growth, how small will your business become?
- Is everything really perfect in your world?
Inevitably you will need rolling forecasting & budgeting to support these strategies to ensure that the right resources sources and cash are available. If you don’t have them, or if they are unreliable or looking at the wrong things, they will need prompt improvement.
At times major restructuring of the business’ trading or assets, the corporate structure, or its financing is called for, when specific accounting or legal support may be necessary. This process needs active directing and managing By the troubleshooter.
Once a business comes through troubleshooting it should have a clear strategy, perform with efficiency, be clearly focused on its core business with financing to fit, be more innovative in its thinking, and proceed with the full support of its owners, managers and funders.
Success beckons… The future may be brighter than you think!
FYI can help with all aspects of troubleshooting … please pick up the phone and talk to us.