Have you missed targets and need to regain profitability?

Have you missed targets and need to regain profitability?

As a new to position CEO or MD a key objective will be driving growth. Most new leaders head straight to the financials to determine where the business is in relation to targets and if it’s in line with forecasts for the quarter. It can quickly become apparent that targets have been missed and change at speed is required to regain profitability. When faced with such a scenario it’s imperative to ascertain where the cause of financial problems and if they are pointing towards operations – how do you change operations quickly but without adversely affecting long term sustainability?.

Managers are essential to getting back on track

To recover quickly you need to be confident in your current management team’s capability. You need to ascertain if they have a plan in place, a proactive mindset and action orientated outcomes looking ahead to the future not looking back and laying blame on the past.

It’s important to understand the quality of management information (MI) they’re using to make decisions and if they’re planning based on facts or assumptions. With accurate MI managers should be able to easily identify areas where the biggest impact can be made and their planning and actions should reflect this.

What answers are you getting from these questions?

  • How long have they known about the issues?
  • How long have they been thinking about the problems?
  • If they were aware of issues, what actions have been taken – find out what’s working and what hasn’t?
  • When did it become apparent that targets had been missed?
  • How long have they been trying to recover?
  • How have they been making their decisions and have they been based on accurate management information?

Success in management requires learning as fast as the world is changing.

Warren Bennis
traffic in Hong Kong at night

An external perspective

When you find yourself in a scenario where targets have been missed, it’s imperative to stop the flow of losses as quickly as possible, cauterising the problem and driving rapid change to get the operation back to a healthy position. Speed is essential to galvanising management and staff and getting them to realise they’re in a positive situation, moving forward and things are looking bright. Many leaders use external specialists to conduct operational diagnostics get an outside perspective of the challenge faced. With accurate measurements of tasks and processes combined with unbiased assessments of skills and competencies, problems are rapidly identified. With greater visibility it becomes far easier to make decisions around capacity, reinvestment and opportunities to remove waste. With issues diagnosed, a set of solutions can be designed in conjunction with senior management to get back on track and return to profitability as quickly as possible.

Perspective is everything

Joni Eareckson Tada
Office life

Uncovering the unknown

Operational diagnostics often reveal operations are not as healthy as initially thought. A full assessment typically uncovers problems not seen at face value. It’s these underlying problems that are often the root of present challenges but also can be the cause of bigger problems in the future. Uncovering problems as early as possible gives the best possible chance to develop solutions and get an operation to full health so that it not only meets present needs but is also fit for the future.

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