Burnarounds: Unlocking The Double Digit Profit Code

Burnaround Warning Sign # 5-**XX&& You Jack!

Boy that factory is a snakepit! Lots of salty old dogs working back there. Sometimes you feel its best to stay out of there. Vulgar language is a way of life in your factory, has been for years. You see no real harm in it because everyone expects it and can dish it out as well as they can take it. And you see it as a release for the tedious and repetitive tasks in manufacturing. It seemed like harmless banter until recently when it lead to fisticuffs. You ended up firing both of the people involved. It was a shame too, because they had been around a long time. Well, that will teach everyone a lesson in behavior. At the end of the day the language bothers you, but since it’s been going on so long, how could you put a stop to it now?

BURNAROUND WARNING SIGN #4-Silos In Paradise

Your senior management team has been around a long time. They know exactly how to do what they do. They don’t meet with each other very much, but you figure that is because they don’t need to. After all, why would manufacturing need to meet with engineering except if there is a problem?

Your staff meetings are infrequent. Once a month tops. You don’t see the need to get them together more often, because who wants to meet to death? When you see an issue in a given area, you meet with that person independently. Why bother all your managers with a problem in one area?

When you do have staff meetings, your managers are preoccupied with their own areas. In fact, if you happen to be discussing a marketing issue, the other managers will be checking email or may even leave the room. That bothers you a little bit, but on the other hand it shows the concern and dedication they have for their own areas. You wonder if that is to a fault.

Burnaround Warning Sign #3-Schmooze and Booze

Your sales people have been around a long time. Decades, in fact. They have forgotten more about your industry than your competitors’ sales people. Which seems odd because the bad guys seem to be getting their share of your sales. But your salespeople have deep and personal relationships with your customers. They know the customers wives, ages of their kids, even their religious preferences. They often entertain the customers as evidenced by the hefty expense reports.

Your sales people are “old school”. They believe the old adage that “the customer pays the bills”. And if they pay the bills then your company should pay homage to them. They identify with the customers more than they do with your company. When it comes to a conflict between the two, your sales people almost always side with the customer. In fact, sometimes you wonder who’s side they are on. They seem to have a constant bad attitude about the company and you wonder if this rubs off on the customer.

Burnaround Warning Sign # 2-Cool, New Features

Product development has been a little slow for a while. Used to be your company cranked out a blizzard of innovations all the time that the marketplace just loved. These days, most of your product developments are minor enhancements to existing lines. And these enhancements don’t yield better margins. But that’s o.k. because the customer expects product improvements. But it bothers you that while they expect improvements, they won’t pay for them.

Your engineers like to design cool, new features and they like to tinker a lot. One time you asked them if a customer asked them for one of these cool, new features and they looked at you like you were from Mars.

Burnaround Warning Sign #1-Life of Riley

A few posts ago I promised to write about the warning signs that your company may be headed for a turnaround and could benefit from a Burnaround. Here is the first of the series of warning signs.

You think your company is humming along just great. You hardly ever hear of any problems. The balance sheet has a little too much debt but you’ll work that off over time. Earnings are usually solid, but during the last recession, things got a little shaky. Your customers seem happy, although a few of them have switched to your competition because of price. Fine, you think. Let them go with a cheap brand.

Your employees seem content, as well they should be since you pay the highest wage around. You feel good that you’ve finally got the business on automatic. You can play golf while your people run the show. You don’t need to make any changes because everything is going along just great.

If this sounds like your company, you are in trouble.