Steps to Determine if You Can Really Hope to Turn Your Business Around
12 Steps: Executive Overview
Step 1: Why Businesses Fail
Step 2: How to Know if Your Business is in Trouble
Step 3: Are You Prepared for the Task
Step 4: Turnaround Leadership
Step 5: Organizing Your Turnaround Team
Step 6: Stop the Bleeding (Cash)
Step 7: Problem  Diagnostics
Step 8: Marketing During the Turnaround
Step 9: Developing the Turnaround Plan
Step 10: Down-Sizing Staff
Step 11: Dealing with Creditors
Step 12: Financing During the Turnaround
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Turnaround Step 3: Do You Really Have What it Takes to Turn Your Business Around?

Why you should read Turnaround Step 3

  • Turnaround Step 3 contains a tool to determine if you are suffering from Burnout and what to do about it if you are

  • After you read this section you will have a better idea of what you are in for before you start the turnaround

  • You will learn what the "Moment of Truth" is and how denial can blind you to the events leading up to it

"Insanity is doing what you've always done and not expecting to get what you've always got." 

---Albert Einstein 

Turnaround Step 3 is all about you!! 

We are finally getting to the point where the turnaround program can be launched. There is only one last step…but it is very important. And the step is all about YOU. 

  • Are you really ready to change or, as Einstein says in the quote above, do you think this time it will be different and you will get a superior outcome from doing business the "same old way"?

  • Can you make the tough decisions to be successful?

  • Are you objective enough to pull this off?

  • Do you have the energy for a turnaround?

  • Does your family have the energy to support you in this project?

  • Can you really be the turnaround leader for your business?

What do Turnaround Guys do Anyway?

"If you're the CEO of a struggling business, let's hope we never meet. I'm a turnaround guy. When I arrive, you leave, and profits return.

You've probably smarter than me, undoubtedly know your industry better, and may be a superior leader. But I've fixed more businesses. I don't cling to unrealistic hopes or hesitate to change things. Any fresh set of eyes, not just mine, will simply do the rational and obvious things, getting results before those nasty creditors padlock your doors.

We outsiders, having seen it all before, free of your emotional baggage, find the fixes and do them with comfort and confidence. The process would nauseate you. This faltering child was yours. We discipline and save the kid. You and I, together, might celebrate this youth's graduation much later. But for now, stand aside!!"

Gary Sutton, author of "The Six-Month Fix-Adventures in Rescuing Failing Companies"

Sutton points out the key differences between a turnaround specialist and the current CEO. Those differences are objectivity and the ability to see the situation with fresh eyes.

So, what makes you think you can be objective? What makes you think you will be able to see your situation with fresh eyes? Since you have been living with your business problems for some time now, it may be very difficult to have these qualities. However, that does not mean you must go out and hire a turnaround specialist.

We will address this point in more depth when we get into the Turnaround Team discussion. For now just realize that some outside assistance may be necessary. Perhaps a family friend, a board member, volunteers from a business organization such as the SBA's SCORE Program, etc. You may not be as objective as you need to be and your eyes can't possibly be fresh after what you have been through!!

Critical Success Factors Necessary for a Turnaround

Critical Success Factors (CSFs) are factors that ABSOLUTELY MUST BE IN PLACE for a successful outcome with the turnaround. The quote below gives a great overview of the Critical Success Factors for a turnaround.

"You have to have four key elements to make the turnaround work. You've got to have the willingness. This means that the new man who is brought in to do the turnaround has to have absolute control. He has to report directly to the board, but he has to have the maximum flexibility that is given to any management. You cannot manage a turnaround by committee. It is strictly a star business, and you have to have a board that is willing to go along with that. The second thing is that he has to have something to work with. There has to be an economic reason for the business to be there. In other words, if you are making buggy whips, you can be the most efficient buggy-whip maker in the world; but, if there is no demand for buggies, you should recognize that, get out of the business, and get into something else. The third key element is the money and resources to turn around, to become a competitive entity. And the final ingredient is the motivation of people. You have to be able to attract and motivate top people in the key areas in which you are making the turnaround."

Bob Brown quoted by Donald Bibeault, author of "Corporate Turnaround"

 Critical Success Factor Summary 

  1. Absolute Control. You can't manage a turnaround by committee! When the ship is sinking, the captain does not practice leadership by consensus.

  1. Is there a reason for the business to even be in business? What is your competitive advantage? Why should customers buy from you versus your competition? Do you really have or can you quickly find a sustainable competitive advantage?

  1. Money and resources to work with….and I would add time. It will be very difficult to turn the business if you will run out of cash in 30 days or less. In the same token, there are many strategies to finance a turnaround using internally generated sources of cash. We will get into those strategies later in this program when we discuss "Financing the Turnaround".

  1. The final CSF is motivation of your team and employees. If they are not motivated to make this thing work. If the majority of your people are running scared with their resumes on the street and expending great levels energy in trying to locate alternative employment, the turnaround will not work.


Did you know that most businesses fail not because they can't solve their problems but because they won't see their problems? It may surprise you, but even the most seasoned business owners prefer blinders to reality when their businesses begin to slide. Nor will it be easy to convince you to act even when the signals clearly point to future disaster. Like most owners or senior leaders you won't, on your own initiative, accept the facts of your situation for what they are. A troubled company first needs a crisis, and until that crisis comes, they tolerate trouble. What may cause you to fight reality? Ego, Optimism, and as we have already mentioned, you simply may be too close to the problem. The ability to detect and act quickly to solve problems is the essence of good turnaround management. 

Moment of Truth 

So the questions on the table are these: Has your business come to its moment of truth? Are you in such a financial crisis that you can't stall anymore? Can you put ego and denial behind you, face the facts and get going with this turnaround? Are the other Critical Success Factors previously discussed in this section in place? 

One Final Question…Are You Suffering from Burnout? 

The definition of Burnout 

Burnout is a debilitating psychological condition of mental and/or physical exhaustion caused by excessive and prolonged stress resulting in:

  • Depleted energy and emotional exhaustion

  • Lowered resistance to illness

  • Increased depersonalization in interpersonal relationships

  • Increased dissatisfaction and pessimism

  • Increased absenteeism and work inefficiency

Guess What? Since you are in a very stressful business situation where you are contemplating doing a turnaround, most likely you are also approaching Burnout…or have arrived! 

The problem with being in this condition (in addition to all of the points above) is the fact that you will make substandard decisions. And you can't afford to be weak in this area…not now. 

Here is what I would recommend. First go to this website on Burnout. It is one of the best that I have found. There you can take a test called "Checking Yourself for Burnout". It will just take a few minutes but will give you insight into the possible condition of Burnout. In addition, there are a number of good articles to assist with you in treating Burnout. Finally, if you are "off the scale" in terms of this condition, please get professional counseling assistance. If you are suffering from Burnout and it goes untreated, you will put yourself and your business at great levels of additional risk!







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