What Do You Want Instead?

Perhaps you want substantially more profit without necessarily getting substantially bigger.

Maybe you want a business that doesn’t require you to make every important decision, solve every difficult problem, or be there every day to make sure things get done.

You may need to stop declining sales, disappearing margins, employee turnover, customer losses, or a cash flow problem before they become more serious.

Or you may be doing quite well and want to grow, add locations, enter new markets, introduce new products or services, develop additional sales or distribution channels, make an acquisition, franchise or license the business, or bring in outside capital.

Perhaps you want to prepare the business for succession or sale. Or simply build something more valuable, more manageable, and more capable of giving you the freedom you expected when you went into business in the first place.

You probably already have some idea of what you want.

Not So Fast

Knowing what you want is important. But it isn’t where a turnaround begins.

Before you can intelligently decide what needs to change, you need a much clearer understanding of what you already have.

And that means more than knowing your sales, profits, number of employees, customers, locations, products, equipment, or other obvious facts about the business.

You need to understand the circumstances that produced the business you have today, how those circumstances affect one another, which ones are helping you, which ones are getting in the way, and which ones you may not have noticed at all.

Before you decide how to get from here to there, you need to know where “here” really is.

Look At Your Business From Every Angle

Don’t rely only on what you see yourself.

Talk with employees, managers, customers, suppliers, advisors, and other people who see the business from different positions. Look at your financial information, operating reports, customer feedback, complaints, returns, delays, mistakes, employee turnover, and anything else that may tell you what is actually happening.

Then compare what you learn.

Your numbers may tell you something different from what you expected. Employees may describe the same situation differently. Customers may care deeply about something you hardly notice. A supplier may see a problem developing before you do.

When two sources disagree, don’t be too quick to decide which one is right.

The contradiction may be telling you there is something you don’t yet understand.

Over the years, I have learned to pay particular attention to contradictions. Working with businesses in very different industries has repeatedly shown me that disagreement is often more useful than agreement. It tells you there is something you don’t yet understand, and that is usually where you need to look more closely.

Don’t Stop at the First Answer

Suppose you conclude that too many decisions still depend on you.

That sounds clear enough. But what decisions?

When do people need you most? Where in the business does the dependence occur? Who comes to you, and who could make those decisions instead? Why aren’t they doing so now? In what way does your involvement affect speed, quality, cost, accountability, or control? By what means could the decision be made without you?

The same questioning can be applied to almost anything you discover.

A sales problem. A margin problem. An employee problem. A customer problem. A capacity problem. A recurring mistake. An opportunity you haven’t been able to pursue.

The first answer identifies something worth examining. The questions help you uncover the circumstances behind it.

Don’t solve the first problem you see. Find out what is producing it.

I didn’t always approach business this way. Operating our own businesses taught us how easy it is to become consumed with solving whatever problem is immediately in front of you. Working with hundreds of other businesses later taught me something else: what appears to be the problem is very often only the visible result of circumstances underneath it.

Write Down What You Learn

As you observe the business and ask better questions, write down what you discover.

Record what happened, what other people told you, what the numbers showed, where information conflicted, what surprised you, and what still needs to be understood.

Writing forces greater precision. It also lets you compare observations that occurred at different times, in different places, and under different circumstances.

Patterns begin to emerge. Connections become easier to see. Something that appeared insignificant by itself may become important when you see how it relates to something else.

And gradually, instead of carrying a collection of impressions around in your head, you begin developing a much clearer picture of the business you actually have.

That becomes your Current Reality.

Now Decide What You Want Instead

Once you understand your Current Reality more clearly, you can return to the question we started with: What do you want instead?

But now you can answer it differently.

Instead of saying you want more profit, you can identify where that profit might come from and what would have to change to produce it. Instead of wanting the business to depend less on you, you can identify the decisions, responsibilities, capabilities, and systems that would have to work differently.

You can do the same with growth, customer retention, employee performance, financing, succession, a future sale, or almost any other objective.

And because you have written down your Current Reality, you can begin describing the circumstances you want to replace it with.

That becomes your New Reality.

Your New Reality Has to Become Real to You First

Clarity about your New Reality may be the most important part of a turnaround.

It cannot simply be something you would like to have happen. A wish is too easily changed when circumstances become difficult or someone gives you a dozen reasons why it won’t work.

You need to develop the New Reality until you believe in it yourself.

Think through what the business would actually be like if this were already true. How would it operate differently? How would your people behave? What would customers experience? What would you do differently? What would you stop doing? What problems would disappear, and what new problems might you have to deal with?

And write it down.

The act of putting your New Reality into words forces you to make choices that are easy to avoid when the idea exists only in your head. Read what you have written. Change it. Add to it as you see something more clearly. Compare it with what you have written about your Current Reality.

The more you work with it, the less it becomes an idea about what you might do and the more it begins to become a description of the business you intend to build.

Practice that New Reality in your mind for a while before you expose it to everyone else. Question it yourself. Challenge it. Look for weaknesses. Become comfortable enough with it that you can explain not only what you want, but why you believe it can work.

Because once you expose it to other people, they are almost certain to tell you what is wrong with it. Some of their objections will be valuable. Others will simply reflect the business they already know and the way things have always been done.

I’ve learned to be careful about exposing a developing New Reality too soon. In turnaround, restructuring, and growth work, I’ve seen good ideas immediately become debates about why they cannot be done. There is a time to invite that challenge. First, you need to know what you believe strongly enough to distinguish an objection that improves your thinking from one that simply pulls you back toward the Current Reality.

You need enough belief in your New Reality to listen carefully without allowing every objection to tear it down.

None of this happens in a moment.

Your initial observation of the Current Reality, writing down what you discover, and developing your first firm belief in a New Reality deserve a concerted period of effort. A couple of weeks is often a reasonable starting point.

You are not trying to have every answer by then. You are trying to become sufficiently clear about where you are and where you intend to go that you are ready to begin bringing other people into it.

Only then are you ready to start changing the business.

Align Your People With the New Reality

Now bring your people into the New Reality. Make sure they understand where the business is going, why it is changing, and what will be expected of them. Tailor roles and responsibilities to each individual’s motivations as much as possible.

Make it clear, both in what you say and by example, that nobody is allowed to slip back into old ways simply because they are familiar. This is particularly important when it comes to training new hires.

Deal quickly with anyone who believes the rules apply to everyone but them. It may be a longtime employee, a high producer, a manager who considers himself indispensable, or someone with a close relationship to the owner. The particular reason doesn’t matter. If one person is permitted to operate above the rules, everyone else learns that the rules aren’t really the rules.

Then make sure your people have the responsibilities, authority, information, and capabilities they need to help make the New Reality real.

Make sure you celebrate accomplishments, both individual and as a group.

Adjust Your Systems

Now begin adjusting the systems, procedures, and other circumstances that must change to support your New Reality.

This may be the bulk of the turnaround work. You may need to change how work is performed, decisions are made, information flows, customers are served, performance is measured, or resources are used.

Don’t try to change everything at once. Make changes gradually enough for people to learn them, for the changes to take hold, and for you to see what actually happens before introducing too much more.

Keep observing, questioning, and writing down what you learn. Adjust what isn’t working and reinforce what is.

And celebrate the wins along the way.

Fine-Tune, Then Re-Observe

Once the major changes are in place, spend time fine-tuning them. Watch what happens, correct what isn’t working, deal with consequences you didn’t anticipate, and reinforce the changes that are producing the results you want.

Then do something different: step back and re-observe.

Fine-tuning is active intervention. Re-observing is deliberately more hands-off. Give the business room to operate and watch what actually happens, including what happens when you are less involved.

Neither is optional. A couple of weeks devoted primarily to fine-tuning, followed by another couple of weeks of re-observation, can be a reasonable starting point. These are crucial parts of making the changes stick and determining what still needs attention.

And the rules you have followed from the beginning still apply. Keep writing down what you learn, keep going deeper, and keep celebrating the wins.

The Method Behind the Turnaround

What you have just worked through follows a method we call 3R2A: three Rs followed by two As.

The three Rs are Current Reality, Write, and New Reality. The two As are Align and Adjust.

Throughout the process, you examine circumstances using seven questions: What, When, Where, Who, Why, In What Way, and By What Means. We call this the seven elements of circumstances or just 7CS for short.

The names aren’t particularly important. The discipline behind them is.

You continue observing, questioning, and writing as you align people, adjust systems, fine-tune the changes, and re-observe the business. And you keep going deeper. What appears to be one circumstance is often made up of several others, and changing one can affect several more.

The process is simple enough to understand. Doing it thoroughly is where the work is.

Putting the Method to Work

Everything we have described so far applies across industries. The circumstances will differ, the terminology will differ, and the work itself may look very different, but the underlying process remains much the same.

A general methodology can show you how to approach a turnaround. Actually doing one requires something more concrete: what to observe, what to write down, what questions to ask, how to organize what you learn, and how to keep moving through the process without skipping the difficult parts.

We have begun developing industry-specific applications of the Turngrow methodology for that reason. Our first is for restaurants.

The Showcase Restaurant Blueprint takes the process you have just read about and applies it specifically to a restaurant turnaround. It provides a course, workbook, observation sheets, and exercises for working through the process over approximately ten weeks.

The examples and terminology are restaurant-specific. The underlying methodology is not. Owners of other kinds of businesses who are comfortable translating those circumstances into their own may find it useful as well.

Learn more about the Showcase Restaurant Blueprint course

The Turnaround Doesn’t End There

A turnaround isn’t finished simply because the major changes have been made. Continue observing what happens, measuring results, writing down what you learn, and making adjustments as circumstances change.

For clients who want continued help, Turngrow can stay involved to monitor implementation, review results, and help fine-tune the business as the New Reality becomes the Current Reality.

And the business you have now may be far better prepared for growth than the business you started with.