In another life I was the new GM of a company that just came out of a failed merger. The company had a loss of $340K versus profit the year prior of $1M. It had debt of $1.1M versus year prior of cash in bank. It had revenue of $3.4M versus $4.5M the year prior. A Complete mess.
My job was to turn it around and make it work. The upshot of 15 months work was:
- Profit went from $340K loss to $2.5M profit
- Revenue went from $3.4M to $6.7M
- Debt paid back in full
- Business got sold for many millions of dollars
Here’s what I did to turn it around.
- The general manager (me) was on very attractive incentive program
- We contained the cash outflow – put the cheque book in the draw
- all expenses scrutinised and reduced
- strict budget & cashflow – measured daily then weekly
- worked out what to stop doing, continue doing & start doing
- writing project plan of 149 initiatives – shared responsibility
- relocated the business – a breakthrough happens after a breakwith!
- hired above average people – total team of 17 FTE’s
- position descriptions, performance standards & career development process implemented
- non financial incentive programs implemented
- created a fun and success driven environment – people wanted to come to work
- involved team on decisions and shared all of the KPI’s
- increased training budget to 7.5% of salaries
- set up management structure with weekly “soft” & “hard” reporting
- hired a sales team with clear focus – sell
- invested heavily in IT to reduce downtime and speed up processes
- wrote extensive systems on “the way we do it here”
- increased client numbers by 11% with marketing initiatives
- increased price of one major product line by 36%
- created new product – responsible for $1m rev & $400k profit
I learned that a successful turnaround can happen if you have a plan, your are focussed, disciplined and the work you do is in the right area.