Here, IFT Member, Phil White discusses the importance of becoming ‘turnaround-ready’ post-Covid and the advantages of seeking external expert help.
Do SME (Small/Medium Enterprise) Boards really have a grip on the scale of:
a) Post-Covid impact on their business?
b) The scale of turnaround and transformation needed to rebuild competitiveness post-Covid?
c) The speed and effectiveness required to find and get the right expert support to get there?
95% of 632 SME Board respondents to a highly enlightening Directorbank survey in May reported that Covid-19 had affected their business (40% seriously), and 96% said 2020 trading would be difficult throughout 2020. The survey concluded Covid-19 will have a “devastating effect to the prosperity of UK SMEs”.
Furthermore, 45% said they had made, or are likely to make redundancies, and expected to make redundancies, and 55% of senior management were already on reduced wages. 72% would need to rewrite their business plans.
Yet very surprisingly, only one fifth of the survey respondents plan to seek external expert help.
Remember the definition of insanity attributed to Einstein of doing the same thing over and over again (with the same people) and expecting different results?
Without outside help to stimulate new ways of addressing the crisis, the vast majority of our UK Boards surveyed could be left exposed and wanting. 80% surveyed are relying on the same top-level management resources, expertise and creativity to get them through the most challenging economic and business environment in nearly a century.
It seems the vast majority of Boards understand the impact, but may be under-prepared and under-equipped to find the scale, speed and effectiveness of the turnaround and transformation remedy that businesses may well require.
So how can Boards rapidly bridge the gap of understanding and action, and assess the scale of the turnaround and transformation needed?
A quick internal business health-check across all company workstreams is essential to get Board consensus on what is required before going to the right kind of external help which is highly likely to be required.
The Institute For Turnaround (IFT) is an independent body, free at point of access, which can advise on sourcing facilitators and turnaround specialists to help in this exercise and in the turnaround and transformation work to identify and source beyond.
Getting external and independent leverage and expertise to the Board health-check is vital to avoid the “insanity” of applying same methods and thinking even more so in this time of economic crisis and upheaval.
An informed, independent view is essential to avoid subjectivity, provide fresh thinking, identify and breakthroughs needed in turnaround. New eyes and ears provide fresh dispassionate thinking, insight, impetus and energy, can help ask the “stupid” and simple questions, override vested interests and politics, and provide vital specific and technical expertise and experience. Too much knowledge of the business and status quo at this point can often be a dangerous thing.
The Directorbank survey findings point to a huge “action gap” with only 20% of SME businesses expecting to take on external and interim management or consultancy support to solve what at least 95% of respondents see as a significantly adverse impact on their business Post-Covid.
When we see so many of our SME’s not prepared to take sufficient action we are reminded of Theodore Roosevelt’s words, “the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing”.
Assuming that the alarm bell of a potentially very large post-Covid action gap is now firmly ringing across our SME businesses and beyond, we can start to explore the main “go-to” options for where to seek help. I will follow up with a brief discussion paper on this next week.