RSM Resources

Much like conductors after a typical train wreck, companies claimthey never saw trouble on the tracks and wonder how they could havejumped the rails so suddenly. Yet business leaders can avoid many ofthese mishaps altogether by keeping a clear eye out for some commonpitfalls or by quickly steering themselves around emerging danger zones.

"Thereare dozens of reasons why midsized companies find themselves in aturnaround situation, but we’ve seen that there are five major triggersfor that kind of organizational distress," says Brian Lassiter,president of the Minnesota Council for Quality and a member of theboard of examiners for the Malcolm Baldrige National Quality Award."Ultimately, they all tie back to a fundamental lack of perspective,whether it’s in how you view your product, your people or yourmarketplace."

Here are Lassiter’s top five reasons why midsized businesses go astray and how they can devise their own makeovers.

Losing focus on your customer.Growing businesses can become more internally complex and self-involvedas they scramble to produce greater volume or deliver broader services.Ultimately, this inward focus can put a company out of touch with itscustomers’ changing needs or the evolving marketplace. Lassiter’sanswer to this dilemma? Stop, listen and learn.

"Collectingcustomer feedback doesn’t have to be a complicated process," he says."Traditional surveys, focus groups and one-on-one meetings are allperfectly good methods of getting your customers’ input and gaugingtheir satisfaction. The important thing is to do something — you justcan’t stay in a vacuum and punch out a product. You’ve got to hear whatyour customers have to say."

Also, think broadly about youropportunities to build deeper customer relationships. For example, bycreating an inventory of customer complaints and tracking issueresolution, you can use data to identify problems early and ensure thatclient concerns get the necessary attention.

Losing focus on your people.Employees are the No. 1 driver of customer satisfaction, and theirrecruitment, selection, development and retention are paramount to yourcompany’s success. "The minute you go from one to two employees, thecomplexity of managing your workforce more than doubles, and you’ll seeit continue to jump exponentially as your organization grows," Lassitersays. "There’s no doubt that employee management is an enormous task,but your company will suffer if you don’t invest enough time orresources into training and preparing your staff to be successful. Fromthe beginning, business leaders must establish a culture that respectsand engages employees, and that has a clear set of values that drivesdecision-making at all levels."

Not using data to make decisions.It’s been said that a person who comes to a decision without data isjust a person with an opinion. Lassiter emphasizes the importance ofusing real facts to fuel a business, noting that some midsizedcompanies get into trouble because they manage by instinct. "It’sincumbent on an organization to figure out what data is needed tosupport its internal and external objectives, then collect thatinformation and actively incorporate it in running and planning thebusiness," he says. "You have to look outside yourself to understandall the market forces at work."

Not managing through a set of processes.Companies can mistakenly run their operations in silos that may befunctionally efficient but ultimately disconnected from each other.Lassiter advises companies to think horizontally and identify the coreprocesses that are essential to creating a positive customerexperience. "Once you have those processes identified, you can reallyfocus on delivering an integrated and customer-focused result," hesays. "When you are conscious of how each piece fits together, you canfollow the flow from your customer’s point of view and more easilyidentify trouble spots in the big picture of how your organizationoperates."

Lacking visionary leadership. This, saysLassiter, is the most important influence on an organization’s healthand its ability to recover from a turnaround. "A leader’s vision is thedriving force behind a business," he says. "Organizations must becomeforward-looking and strategic in what they do and how they do it. Ifthey don’t, they’re just managing by tactics, trying to get the productout the door, and ignoring the critical, long-term issues that reallyplay into whether a company survives. Top managers must pull themselvesout of the day-to-day issues, set a vision of where the company isheaded, and provide that overarching support for their employees andoperations."

The bottom line on conducting a turnaround is that you’re never really done.

"Thisisn’t something you fix and forget about," Lassiter says. "You have tobe attentive and continually monitor your organization’s performance sothat you can take action before potential issues become full-blownproblems. Avoiding a turnaround situation in the first place is thebest alternative, and that requires a proactive, strategic approach tomanaging your business, motivating your employees and engaging yourcustomers."