The importance of Values when planning a turnaround strategy
When planning a turnaround strategy, it is vitally important to the successful implementation that it is driven by a set of values and beliefs that underpin both the purpose, and the strategy, of the turnaround.
Values are the beliefs and moral principles that lie behind the company’s culture. Values give meaning to the norms and behaviour standards in the company.
I will give some examples (all based on real events) of behaviours from a business we will call Sloppy Limited (I have changed the name to protect the innocent).
- The MD’s PA takes a call from a key supplier who would like to speak with her boss. She passes the message to the MD. The next day she gets the same call from the supplier. She again passes on the message and the call is returned, albeit a day late. The damage is twofold: A hacked off supplier and a PA who feels her boss is not on the ball!
- The Purchase Ledger manager needs to make several payments to key suppliers. The MD asks for a spurious excuse to be made and the payments held for another two weeks. The damage is twofold: Let down creditors and a Purchase Ledger manager who has a diminished view of his boss who has to lie to manage his cash flow.
- The Sales Ledger clerk receives a payment from a customer for an invoice they have already paid. The MD says keep the payment until they shout. The damage is twofold: A Sales Ledger clerk who believes his boss is dishonest (!) and a very disappointed client when they find out they have paid twice and they have not been told.
- The MD leaves at 4.50pm 4 days out of 5. The damage is Companywide: None of the employees have any respect for their leader who is ducking out early. Why should they be staying??
I’m sure there are some behaviour there that we all recognise and, you will see, that are not conducive to developing the trusting and supportive environment we are trying to create.
The Theory of Relational Influence says that everyone can be, and is, a leader in certain situations.
However our people do what we do, they act like we act, the Values and Beliefs, the culture and the behaviours that everyone adopts are formed by the drivers and leaders of the organisation. This is particularly the case in turnaround situations.
It is generally accepted, that mutual respect and support should be at the core of these values and beliefs.
To codify this new way of working you could do something as simple as drawing up a Service Level Agreement that is not only applied externally, but also to internal customers, in an effort to avoid the horrendous behaviours at Sloppy Limited.
This could include:
- Returning all calls promptly
- Consistent client service
- Client is always right
- Supporting colleagues at all times
- Giving honest feedback to clients when things don’t go well
So when planning turnaround strategy or taking turnaround strategy advice, remember how strong leaders drive the values and beliefs of their respective workforces, and how employees reflect the leader’s ways of working, and start to treat others in the way that they are treated by that Leader.
It is therefore vitally important that leaders set high standards at any time in the life span of their business, but this is never more important than when everyone’s backs are to the wall and the business is going through a turnaround. It all gets driven down from the top…
I’d love to hear your views about things to remember during a turnaround situation.
Image by: marsmet546