How to Be a Leader and Save a Struggling Business
Turning around a business when it seems to be failing is no easy task. The pressure is on and missteps carry far more weight than most entrepreneurs are ready for. Saving a struggling business takes leadership and good leadership at that.
To help guide leaders looking to deal with business struggles, we’ve put together a guide full of actionable advice. With this material in hand, it will hopefully provide some clarity around how to proceed so as to give a business the best chance of bouncing back.
Struggling Businesses Have Tough Decisions Ahead
Business leadership often involves tough choices and this is no more true than when dealing with a failing business. Often the business model is going to need a radical rework and some people are bound to be unhappy with the necessary changes.
Getting too emotional about your decisions is one of many business pitfalls experts warn against. You may need to cut costs and you may even need to lay off employees. That isn’t “selfish” if what you’re doing presently doesn’t make business sense and it’s even less selfish if the alternative is your business tanks.
People at the top are also going to need to start rethinking things. They may need to retool their dreams to fit the realities of modern business that are causing them to struggle. They may also need to work harder than they expected or learn skills outside their comfort zone in order to succeed.
A Leader Needs a Plan
Around 25% of failing Australian SMEs fail due to either poor leadership, poor management, or bad planning. If you intend to be the leader that turns a failing business around, this is a fact you must confront.
Management and other organisational leaders need to be held to a high standard. They should have the skills necessary to do their jobs and the willingness to learn new skills as needed. Employees under them should understand their jobs and be set towards the appropriate goal, without feeling taken advantage of or abused.
At the same time, a quality business plan will account for the fact that one person can only do so much; expecting one employee (including yourself) to do the jobs of three or four is only going to cause burnout and low morale.
A company needs a business plan, which should address:
- The company’s leadership structure
- What products or services are being offered
- Who the target demographics are
- How the company intends to attract those demographics
- How new employees are going to be prepared for what is required of them
Beyond that, the company is going to need a game plan for how to become profitable again. Leadership (as well as any financial experts in the organisation, if there are any) will need to look at the company’s income and expenses and then balance the sheets.
This touches a bit on the section above, in that costs will need to be reduced, but it goes beyond that too. Inefficiencies need to be rooted out and potential new sources of profit found. In essence, anything that may be causing the company to fail (even a little) should be thought about to see if there is a way to fix it.
People Hate Change (and Despise Exits)
Prepared for tough decisions and with a plan in hand, this will actually bring a leader to what may be the hardest part of saving a business. Implementing changes.
Employees tend to know when a business isn’t doing well. This already will have many feeling anxious. After all, if a business fails, they’ll lose their jobs.
When you come in and start making cuts, morale will fall even more. Benefits, wages, and available luxuries in the office may all be reduced. (Meanwhile, staff exits, while sometimes necessary, may put people in a downright panic.)
This will only be made worse if you’re an outsider brought in only recently by a company’s leadership. Employees may resent you, even if the changes you’re making are logical and needed to save the company.
Oftentimes, explaining what the plan is outright can be a good way to defuse the situation. Framing it as what it is, difficult decisions being made to save the company, can help employees understand that you’re not just some outsider ruining their lives.
You can also encourage that they come to you in private if they have concerns or suggestions, as this may both ease their worries further and even give you some good ideas for improving the company’s chances.
Sharpening Your Own Skills
If you’re in a leadership position, it can also benefit any companies you’re heading if you improve your own talents as well. At the very least, studying up on marketing, business administration, and economics won’t hurt.
You can also join one of our leadership consortium’s aimed at CEOs and similar individuals. Our consortiums are designed to help leaders grow through an approachable, conversational lens.
The 2020 CEO Consortia Program is the core of the organisation and designed to support sustained and mindful leadership growth.
A Struggling Business Needs Strong Leaders
A struggling business is going to fail if something does not change. Leadership must intervene, change the course of the business, and guide it to a better tomorrow.
If you’re worried about a business but find your leadership skills lacking, 2020 Exchange may be able to help. Contact us to learn about how we can support you. You’ll be able to interact with like-minded CEOs and thought leaders, many of whom have faced the same sort of challenges you now face yourself!