The Business Turnaround Matrix
This week’s post is a guest post from the wonderful Haroon Rashid, Director at Business Fixer.
SPECIAL OFFER: For Carl Pullein readers, get 40% off Haroon Rashid’s latest eBook — ‘How To Turn Around A Failing Business’. Use promo code: CARL
“Fella, what the hell happened to you?…”
This is what my older brother said to me recently at a family gathering. He looked at my rapidly growing grey hair and beard, whilst he maintains a jet-black mane.
“Stress, brother! That’s what happened!” is my usually jovial reply.
I’ve had a stressful career. I was nicknamed, ‘The Fixer’ a long time ago and it stuck. You see, I’m the guy they call when things are really bad; when the company is at its lowest in terms of finances and morale. This is the time when the Directors lay awake at night wondering how they’re going to pay their staff and their bills. This is the time when loyal staff start brushing up their CVs and handing in their notices. When all of this is happening, I’m the one that gets the call…and every time my hair goes a little greyer.
Does any of this sound familiar? Every business goes through ups and downs. Perhaps your business has taken a hit due to COVID. Perhaps your business is still trying to build momentum and get back to where it used to be. Maybe your business is right on the brink and you’ve no idea where to begin in turning the ship around.
If you are in a business turnaround situation, then I think this is the right post for you. I have not been formally taught how to turn around a business. But I’ve achieved some pretty cool things over the last 10 years and I’ve learned some life-long lessons along the way. Over the years I have codified these lessons into a simple matrix which I call ‘The Business Turnaround Matrix’. This matrix is what I use now to turn around big companies, departments, and even individuals. Simply put, this Business Turnaround Matrix works.
I’ve used the Business Turnaround Matrix to do the following:
Turn around 3 multi million pound companies
Turn around a department that was losing £20K per month
Coach over 50 people around the world to achieve more, have less stress and be a better version of themselves
The Business Turnaround Success Mantra
Over the years, I have coined the following phrase which has become the mantra for many businesses since.
“Clarity is king, simplicity is queen.”
I often joke with my clients and say, “I’m not that clever. I like to keep things clear and simple.” It’s a tongue-in-cheek way of saying that we often get into a mess because we overcomplicate things. Business success quite often comes down to keeping things simple and super clear.
OVERVIEW: The Business Turnaround Matrix
This is the Business Turnaround Matrix.
The matrix is split into 4 segments:
The King (Clarity)
The Queen (Simplicity)
The Jester (Ambiguity)
The Village Idiot (Complexity)
The Jester — Ambiguity
Don’t you just hate it when things aren’t clear? In my experience, one of the primary causes of unhappy staff isn’t low pay — it’s lack of clarity. Most people want to do a good job. They actually crave clarity (much to most senior professional’s belief). Quite often your staff feel they are being hindered from doing so because their leaders haven’t given clarity across the board. Ambiguity breeds frustration.
Ambiguity can be any of the following (and more):
Unclear about the strategy and plan
They don’t know what their job is
They don’t know what they’re responsible for
They don’t know their targets or KPIs
Who’s in charge?
Who is responsible for X?
I’m sure these sound familiar. If you hear these types of grumblings amongst your staff, then you have ambiguity in your business and it must be eradicated. However ambiguity doesn’t just simply appear. Let’s look at one of the main perpetrators of ambiguity…
Jesters
The Jester is one of the biggest killers to business success. They love it when there’s ambiguity because they can get away with murder.. Jesters love to ‘play in the greys’. The Jesters rely on things being unclear so that they can feign ignorance, not take responsibility and pass the blame. They are the ones who often play politics and it’s never their fault.
Now, does this sound like the kind of behaviour or culture you need in a business turnaround?
Hell no!
Bottom line — ambiguity kills businesses. It means your staff will wander around aimlessly not knowing what the plan is, who is responsible and ultimately it’s the business that suffers.
I think if we’re being honest with ourselves, most of us will relate to some of the above (if not all of it). We all know people like this, and if we’re really honest, we have probably behaved like this at times ourselves.
But fear not. Wherever there is a villain, there is a hero. The Jester may be the villain, but like all villains, a hero must rise up to do battle with them.
There’s hope.
There’s the King…
The King — Clarity
Remember the mantra — “Clarity is king, simplicity is queen.”
Clarity is King. Clarity is the antidote to all of the problems outlined in the Jester section. Remember — your staff crave clarity.
In order to get control of the ship, eliminate the power of the Jesters and turn a failing business around, you need clarity. Let’s dive in deeper…
Clarity starts at the very top. The CEO and Executives must be clear on the strategy and plan. If they are not clear, then how can anyone else be clear? The simplest way to ensure clarity is to set clear goals.
CLARITY: How To Set Clear Goals
In their book, ‘The 4 Disciplines of Execution’ the Franklin Covey authors talk about an excellent goal-setting formula which, when followed, provides you with absolute crystal clear goals.
FORMULA: Setting Clear Goals
Move X to Y by WHEN
Let’s use an example. Let’s say you want to get more sales and the way you’re going to do that is to get more customers. The plan is to increase sales and the goal is to increase customers.
This is where most businesses fall in the trap of setting unclear goals.
“Increase customers” is not a clear goal.
To build clarity around this goal, we’ll use the 4DX formula. Here we go.
The first word is ‘move’. This must be a verb. Remember that we’re trying to move something. Most of the time I use either ‘increase’ or ‘decrease’. In this example, we want to increase our customer base so we’ll use the word, “Increase.”
GOAL: Increase customer base…
X is where you are right now. You’d be surprised how many people don’t know their starting point. Identifying your starting point already provides clarity to the team. Let’s say in this example you have 10 customers.
GOAL: Increase customer base from 10 customers to…
Y is the goal or target number you want to achieve. If you say, “We need more customers” this is not clear. How many more customers will suffice? Will 1 more customer do? Or 100? We need to specify how many more customers you need. Let’s assume you’ve done the calculations and have determined that you need 20 total customers. Therefore the goal now looks like this:
GOAL: Increase customer base from 10 customers to 20 customers by…
WHEN is the deadline. Goals without a deadline are doomed to never be achieved. We need something to move towards. Deadlines are a great way for us to get our asses in gear. In this example, you have determined we need 10 more customers by April 2022. Now the goal looks like this:
GOAL: Increase customer base from 10 customers to 20 customers by 30th April, 2022
How clear does that look?! Is there any room for misinterpretation? I doubt it.
CLARITY: What Does ‘Good’ Look Like?
Now you’ve got a clear goal, but wait! There’s still even more clarity to be achieved! All high-performing individuals ask some form of this question:
What Does ‘Good’ Look Like?
‘Good’ is the ideal scene. It’s how you know you’ve achieved the goal with excellence. Let’s revisit our current 4DX goal.
GOAL: Increase customer base from 10 customers to 20 customers by 30th April, 2022
If the goal is to acquire 10 new customers, then we should ask, “What does ‘good’ look like?”
Here are some examples of what ‘good’ could look like in this example:
The 10 customers satisfy the following criteria:
Have at least a good credit rating
Have been trading for a minimum of 2 years
Are based in the Greater Manchester and North East region
Have gone through our internal contracts process
Can buy the minimum order requirement of 10,000 units per month
Now let me ask you — how clear is that?! I can tell you one thing — the Jesters won’t like this level of clarity! There’s nowhere to hide!
Get in the habit of always asking that crucial question. By asking the question you are providing absolute clarity around what you consider to be the successful execution of the goal.
Now we’ve battled the villain of ambiguity. Now we must focus on the next business-killer. This business-killer is not so obvious which makes them extremely dangerous.
This villain is…
The Village Idiot — Complexity
Have you ever been in a meeting and come out more confused than when you first entered the room? I know I have! In those meetings, someone will attempt to roll out a plan which is so complicated that everyone’s eyes glaze over.
Did you know that the brain burns calories when it thinks. When something is more complicated and we have to strain to think we burn more calories. When something is complicated, our reptilian brain kicks in and is trying to protect us by sending us into a daydream, thereby conserving calories. (The average person daydreams around 30% of the day). This is why people’s eyes glaze over when something is complicated. They drift off and don’t listen.
To make things worse, complicated plans have a high margin of error. In a business turnaround, you have a slim to zero margin for error. Therefore a complicated plan is not fit for purpose.
If a plan is very complex in nature, it will not be understood and your staff will make many mistakes. When they continually make mistakes they will get frustrated and start to feel demoralised.
This cannot happen.
You can probably guess that when I go into a business turnaround I can see the team is trying to run an extremely complex plan with ambiguity. The Jester and the Village Idiot are having a field day! No wonder chaos is reigning!
The best businesses keep things simple. Sure, the inner mechanics of a product may be mind-blowing, but the strategy and plan are very simple. You only have to look at the great businesses in recent history and you will see a common trend amongst CEO — they don’t like complicated, they keep things simple.
Which brings us nicely to the hero to this particular villain…
The Queen — Simplicity
Remember at the beginning I said that I’m not a clever guy? I like to keep things simple. The truth is that the best CEO’s and Directors I have worked with all abide by this principle of keeping it simple.
In their book, ‘Extreme Ownership’ authors Leif Babin and Jocko Willink talk extensively about the importance of making simple plans. Their litmus test is that the most junior member of staff should be able to understand the plan. After all, everyone from senior to junior staff will be executing the plan.
The Big 3
Now in the vein of keeping things simple, we must also look to ensure that we prioritise. In his book, ‘Free to Focus’, Michael Hyatt talks about a priority structure called the Big 3. There is always going to be too much for you to do. You will always run out of day, especially in a business turnaround.
The principle of the Big 3 is to identify and focus on the few highest-value things that will move you towards your goal. It could be 3, 5 or even 1. The point is that you are narrowing the focus down and keeping it simple.
When I’m in a business turnaround, I ask the senior staff to identify all the things they could do to turn the business around. They typically come up with around 20 things. Then I ask them to narrow it down to the 3 highest value things. The 3 items they identify will form the basis of the plan.
What’s simpler — a plan with 20 initiatives or 3?
When your staff have fewer initiatives to do, they will increase their chance of success, they grow in confidence and are less likely to drop balls. When you give them too much to do then things will fall down quickly.
Conclusion
There you have it — the Business Turnaround Matrix. Here’s a quick checklist for you to run through to make sure you keep things clear and simple.
Have we identified the few high-value things that will make the biggest impact?
What are the 4DX goals for each initiative?
What does ‘good’ look like for each goal?
Who is the responsible officer for each goal?
Do they know they are responsible for the goal?
Is the plan simple enough for a junior staff member to understand it?
Good luck!
I’m Haroon Rashid and I’m a Business Coach in Leeds UK. I believe business success comes down to 2 principles — ‘Clarity is King, Simplicity is Queen’.
I’ve used these principles to turn around 3 multimillion-pound businesses, coach 50+ people globally, grow many global organisations and help countless people get their business idea successfully out of their heads and into the real world.
Whether you’re in the middle of a business turnaround, need to grow your business or want to get your idea off the ground, I’m really good at helping people understand where they are, clearly define where they want to be and get them from A to B in the best way.
SPECIAL OFFER: For Carl Pullein readers, get 40% off Haroon Rashid’s latest eBook — ‘How To Turn Around A Failing Business’. Use promo code: CARL