Jeff Sands, Founding Partner at Dorset Partners and author of 'Corporate Turnaround Artistry: Fix Any Business in 100 Days,' shares his experience turning around struggling businesses, crisis mode, hard decisions & hard conversations needed, vendor relations, debt, labor, and more.
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Quick takeaways
Immediate actions for a struggling business: get rid of unnecessary consultants, focus on fundamentals, strengthen balance sheet, choose strategic direction.
Recruiting in crisis: sell vision of turning around, find motivated individuals committed to making a difference.
Dealing with external pressure: manage expectations, change the narrative, communicate transparently, build trust and buy-in from stakeholders.
Deep dives
Immediate Actions for a Turnaround
There are four immediate actions that can be taken for a struggling business. First, getting rid of the turnaround consultant if their services are no longer needed. Second, maintaining a focus on the fundamentals of running a lean and profitable company. Third, gaining core strength and accumulating resources to strengthen the balance sheet. Finally, choosing the right strategic direction once the business is lean and flexible.
Recruiting in Crisis
Recruiting in a crisis situation involves selling the vision and the potential of turning the business around. Highlighting the opportunity for individuals to be part of a heroic journey and play a crucial role in the recovery. It is about finding motivated individuals who want to be part of a winning team and are committed to making a difference.
Managing External Pressure
Dealing with external pressure, such as negative local narratives or rumors, requires managing expectations and changing the narrative. Communicating the plans and progress transparently to stakeholders, highlighting the steps being taken to address the challenges and showing a clear path towards recovery. Building trust and buy-in from the community, customers, and vendors while staying focused on the fundamentals.
Liquidating Assets and Cash Management
In cash-strapped situations, extracting cash from stakeholders' balance sheets is crucial. This can be achieved by liquidating assets or using financing options creatively, such as selling options or borrowing with a clear repayment plan. Managing cash flow, negotiating payment terms, and strategically utilizing available resources to ensure the business can meet its obligations and maintain operations.
Maintaining Happiness in the Midst of Turnarounds
Despite the challenging nature of turnarounds, being able to untangle complex problems and make a positive impact brings immense satisfaction. The enjoyment comes from being able to navigate these situations without personal risk and from the thrill of problem-solving. The deep passion for turnarounds and the positive effects on businesses and communities contribute to a sense of fulfillment and happiness.
Jeff Sands is the Founding Partner at Dorset Partners. He is also the author of a great book, “Corporate Turnaround Artistry: Fix Any Business in 100 Days.” In this conversation, we talk about Jeff’s experience turning around struggling businesses, crisis mode, hard decisions & hard conversations needed, vendor relations, debt, labor, and more.
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