Mon, 9 Jan 2012 | By John R. Treace

Time and again the same problems occur in attempted business turnarounds, regardless of the reason requiring the turnaround.
Here are the five steps that need to happen during any major business adjustment and some of the pitfalls to avoid along the way:

1. Assess the situation

It is crucial to understand what got the company where it is now. Since ineffective management is usually the problem, the people who created the problem in the first place will not know how to fix it. Providing that the company’s products or services are competitive, the issues affecting the performance of a sales team can range from an ineffective sales process to low morale. Great insight can be gained by getting close to the company’s sales force, sales processes, and customers to determine why sales are not progressing to plan.

2. Defining a winning culture

Companies in need of a turnaround usually have an ill-defined culture. Especially when a company is charting rough waters, it is imperative that the sales team embrace a unified culture, one that will define success. At the heart of culture are the core values a company embraces. These are simple action statements that define the principles the company believes in, not fuzzy declarations that can be interpreted at the whim of management. “Tell the bad news first, not last” was a core value we used at one company.

3. Managing people

In a business turnaround, it is important to identify who stays in his or her current position and who must find a position elsewhere. Making this determination is critical; powerful managers surround themselves with high performers. However, when looking at in the long term, it isn’t so much who you fire as who you hire. To retain high-performing employees, you must ensure that they can trust management’s word, that management has their best interests at heart, and that management is committed to distinction in all that they do. High performers want to be on a winning team, and if they think management can’t accomplish this they will look for employment elsewhere.

4. Creating a new vision of the future

When companies fail, employee morale and confidence is degraded, and many high performers will look for employment elsewhere. Most employees in these situations want their company to prosper. They also believe that they have done an admirable job and will resent those who say otherwise, especially if employees from other departments lay blame on their department. In these situations it is imperative that a new vision for the company be formulated and effectively communicated to all employees. Don’t expect this to be an easy task, as you can expect employees to fall into three categories: those who embrace it with enthusiasm, those who sit on the fence to wait and see how things go, , who resist the change and are open and verbal in their opposition. The fence sitters and the resisters must be persuaded to enthusiastically support the new vision or find employment elsewhere.

5. Developing a strategic plan

Once a turnaround-management team has defined the core values, culture, and vision of the future, effective strategic planning can begin. The strategic planning process should include the top management members who will be charged with implementing the plan. After the plan is finished, the sales force should be promptly informed as to the outcome and how the plan affects their future. Powerful companies have solid strategic plans, and they effectively gain employee buy-in to them.

Summary
Pulling off a business turnaround takes an intimate understanding of a business, including its customers, products, sales process, and employees. With the proper tools and an understanding of these five steps, you’ll be on the road to a successful and permanent business turnaround.

John R. Treace is the author of Nuts & Bolts of Sales Management: How to Build a High-Velocity Sales