At my most recent successful turnaround, four months after I started the engagement, the owner and I had the following conversation at the weekly management meeting.
The accounting manager displayed the prior month’s income statement and balance sheet on the wall-mounted computer monitor in the conference room for the whole management team to see. She began explaining what they were seeing, so everyone understood the prior month’s results of operations.
There were very few people in the meeting who understood the finances, but when she said, “The company just had the highest sales total for one month in the history of the company,” everyone clapped. Her next statement was that the company had made a nice profit for the month and year to date. “Plus,” she added, “I believe the company may not have another loss in any month for the balance of the year.” The company’s owner then looked at me and asked, “Bob, does that mean that the company has turned around?” “Well, John, that is one of the first signs of a company that has turned around.” “What other signs do we need to see?” he asked. “That is a great question! There are several signs,” I said, and then I listed them for the owner and each manager:
- The company must have a great management team with a professional manager in each functional area of the business.
- The company uses an operating budget to manage the business.
- The business has a detailed marketing plan to drive sales growth.
- The business has a strong system of internal controls to protect the company’s assets.
- The company has timely, accurate financial and operational reporting.
- There is minimal employee turnover for the company during the year.
- The company has an excellent hiring policy and only hires “top-tiered” candidates for each open position.
- The owner and senior managers are totally in sync with their goals for the business.
- The company never offers a person a job with the company before we do a complete and comprehensive background, criminal, drug, and credit check on the candidate.
- And, finally, the company hires the best people in the area, treats them with respect, gives them the tools to do their jobs, provides them an excellent environment to work in, and compensates them fairly.
So, once we can check off each of these items listed above, we can all say that this company has turned around and will be successful in the future.
My name is Robert Curry, and I am an Author, CEO Coach, Keynote Speaker, and Turnaround Specialist. Over the past 20 years, I have worked with more than 75 companies taking their businesses from Loses to Profits. Click on the links below to read other articles like: “How do you know when your company has turned around?”
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Recently, I published books about two of my prior turnarounds: “From Red to Black” and “The Turnaround.” My third book: “The Turnaround 2,” will be published in three weeks from today. All books are true stories about the turnarounds of real companies that I have turned around during my career. In the From Losses to Profits series, I shared all my secrets on how to help to grow sales, reduce expenses, improve cash flow, and most noteworthy, strengthen the management teams.