Critical Care for
Turnaround Step 10: Reorganizing the Business
Action Management Process
(AMP) Step by Step
effectiveness and cost efficiency
reorganizing a business is a costly, complex and time consuming
activity. Since you are in the midst of a business turnaround, you have
neither the time nor money for the "typical" corporate reorganization.
To that end, I have included a very powerful tool called AMP to assist
in rapidly reconfiguring the business.
I will assume that you have conducted the Pareto analysis
(80/20) and that you have determined the 20% of business units,
products, services, etc. that contribute most to the bottom line and
that your organization is most qualified to produce. With that
information, you are now in a position to restructure the
organization…this usually means flattening it out. The resulting
structure will be more efficient, effective, and because it will require
less staff, much more cost effective.
Go through the tool step-by-step. It works best if you work
through this with your turnaround team. In a nutshell what you will be
doing is identifying the mission of your new organization based on the
Pareto analysis. From there you and your team will determine what
people, services, etc. absolutely must be in place (called Critical
Success Factors-CSFs). You then break apart the CSFs into their
components (called Fundamental Components-FCs). You may have heard the
adage of "form follows function". The function of the organization will
now have been determined, and the form or organization and
infrastructure will flow from this analysis.
Identify Your Mission
Identify your core products or services-what you
must accomplish or deliver. A Core product or service is what you
deliver directly to a customer that your customer cannot do without.
Identify your direct customers and identify
beneficiaries and sponsors-if any. Direct customers make decisions
about and pay for your products and services. Beneficiaries benefit
from products and services but do not make decisions about them.
Sponsors influence or enable a project, event or initiative. Key
point: Your mission must identify the direct customers,
however, it is often helpful to identify beneficiaries and sponsors.
They could show up in either
Mission or CSS.
State why you are in business or why your organization
exists (why you want to start the organization). What important
purpose does it serve? What outcomes are you committed to achieving
(your purpose)? A strong mission statement frequently start with the
answers to these “why” questions.
Bring your products and services, customers, and purpose
together in your mission statement. Consider beginning your mission
statement with the purpose. Bringing it all together. The input should
be organized into 3 categories; the what (products/services),
for whom (direct customers, beneficiaries-sponsors), and so
that (the purpose). Discuss the above with the group and circle
all that there is group consensus on. Take a break and have someone
write on a separate flip chart page the purpose (so that), the what
(products/services), and for whom (target market). Use bullet points
and don’t wordsmith at this point. Hang these sheets up front where
all can see.
Here are some other
important points about mission:
State what you want
to accomplish (Visioning Stage…it is OK to dream a little here)
The mission must be
right if the organization is to be able to focus on the factors that
lead to success. Mission statements identify precisely why you are in
business, what you do and for whom.
A well defined
mission Provides direction, Promotes a sense of shared purpose, Gives
a clear idea of the result or outcome that is expected. The mission
should answer What, For Whom, and So That...
Identify Critical Success Factors (CSFs)
Key points concerning CSFs:
You first need to answer the questions pertaining to what must go right
or be right in:
Understanding your customer’s needs
Creating the product or service to meet those needs
Delivering the right products and or services
Servicing the customers
The first step in identifying your critical success factors
is to “brainstorm” all those things that seem to be important and are
critical to the achievement of your mission.
Now attempt to group all of the ideas into 5-7 categories
of similar ideas so that they are easier to deal with. Some categories
could be Certification, Customer Service, Sales & Marketing, Financial
Reporting Systems, etc.
One way to do this is to look at each brainstormed idea and
ask the group what category this could go under. Let’s say it falls
under Sales & Marketing. Write the category on a separate flip chart
and number it #1. Then whenever you come to another idea (have the
ideas first numbered 1-50 or whatever) that falls under the category of
Sales & Marketing, write the #1 next to it using a different colored
At this point you have some level of organization. You
could even write the idea numbers under the various categories on the
separate flip chart page for quicker reference.
Additional points to consider:
must go right to achieve the mission.
point for thinking about critical success factors is the mission.
critical success factors, ask two questions:
What must go right/be right in
order for you to accomplish your mission?
What, if it went wrong, would
jeopardize or even destroy your mission?
Try to have no
more than 7 critical success factors for a given mission.
experience, careful thinking, and judgment to identify your critical
success factors properly.
Here are some
general guidelines that can help.
Stay focused on the mission and the
Identify Fundamental components
Identify the fundamental components that underlie each
critical success factor.
Select the fundamental components (FCs) deserving most
Identify those environmental conditions/factors (current
and future, internal and external) that have, or may have, an impact
on the FCs deserving most attention.
Assess whether the evidence (the facts) support your
identification of which components deserve attention.
Specify the environmental conditions affecting your plan as
precisely as possible.
Basically this step entails doing a WBS on the CSFs
(getting to the components of each CSF) and conducting a Risk
Analysis/Risk Mitigation on the high priority FCs.
To begin to identify your FCs, ask yourself, “what does
this CSF really mean or require?
Continue this cycle until you feel certain that your
overall CSF has been totally and adequately described and
supporting elements (fundamental components) that contribute to each
critical success factor. Asking the questions, “ Which means?” or
“Which Requires?” can help you.
those FCs requiring the most attention by asking:
Which FC components represent
significant problems or opportunities?
Of these, which FCs are most
critical to our mission?
On which are we most prepared to
Which need the most immediate
differences between current performance and what is required to achieve
your mission. Gaps may exist between the level of performance required
relative to each critical success factor for you to accomplish your
mission. Once the gap is identified and stated, you are in position to
set objectives to close the gaps.
result you will accomplish to contain, reduce, or eliminate a gap. A
well stated objective is:
A statement of the result which you
are committed to achieving.
Specific. It states what is to be
Measurable. It answers the
questions: by how much, how many, or how well?
Time-bound. It says when the
result will be achieved.
Accountable. It identifies who is
responsible for the objective.
Develop Action Steps and Implement (develop a budget along with the
activities that must occur to reach an objective. Determine the specific
actions you will take to achieve the results (objectives) that you have
committed to accomplishing. Once the general approach is identified,
consider the following points as you develop action steps:
Milestones-What are the significant
points of process along the way toward completing an action? These
points are usually marked by something observable, such as a product
or a condition.
Target dates-Specify when key
actions have to be started or completed.
Resource requirements-Consider the
resources needed to carry out an action, including money, skills, and
Possible obstacles-Note the
situations that could prevent you from achieving the objective, the
likelihood that they will occur, and what you will do it they occur.
will be accountable for carrying out one or more actions?
progress; make mid-course adjustments. Tracking involves collecting and
analyzing information to answer three questions. Are
the objectives being achieved in quality, quantity and time? Are the
objectives closing the gaps?
critical points. They track interim results and milestones that are
critical to closing the gaps.
information. Ideally, the system highlights emerging problems so that
timely corrective action can be taken.
effective. Simple put, the value of knowing something must exceed the
cost of finding it out. Focusing on critical points helps assure an
Point the way to
corrective action. A system is of little value if it does not
facilitate action. Information must help the accountable person to
make decisions about resources, organizing, staffing, and directing.
Finally, if you need assistance in terminating an employee, click here.