If A Business Wants To Survive And Grow It May Need To Look At Fundamental Change

If A Business Wants To Survive And Grow It May Need To Look At Fundamental Change

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Any successful business should expect to constantly monitor its activities and modify them where necessary to improve its efficiency and its various offers.

Continuous business improvement does two things: it ensures peak efficiency in existing processes and keeps them at peak performance by continually updating them.

But on its own, especially when there are significant challenges in the wider economy, such as the current global economic downturn, continuous improvement may not be enough.

Such unexpected challenges can plunge a business into difficulties where its survival may be at stake and this may mean looking at a fundamental change to the way it operates.

Too often businesses struggling to survive, are characterised by hard work and trying to improve the existing business model before they fail. Business improvement is all about laying foundations, tweaking the system and improving.

Fundamental change involves a radical look at the whole operation but it must also be done carefully, taking a hard look at the business and establishing what needs to be preserved for survival and future growth, to avoid throwing out the good along with the bad. However, if a business attempts the growth phase before bedding in new foundations after fundamental change it will reinforce any problems that had not yet been sorted out.

For example in a downturn it is an understandable reaction for a business to trim its costs when it may be better to have an in-depth look at its business model and be open to more radical changes.

This can all seem too much when a company's directors are struggling to keep a business afloat at a difficult time. It is possible to be too close to the problem, however, and a combination of worry and a sense of urgency is not ideal for taking an objective look at the whole business model.

Here is where appointing a business turnaround adviser could make all the difference between failure and success. While the adviser is motivated to help a business succeed and will expect to work with committed managers and staff, they are not so immersed in the day to day minutiae of the operation and can therefore look at all aspects of the business, identify what is viable, what processes are draining the company and what actions can be taken.

In a recent case, a business turnaround adviser was brought into a manufacturing company to help it through difficult times when orders had dropped dramatically. The company occupied an expensive factory with consequent high overheads.

Having thoroughly examined the business and established that with some changes its products did have a market, the adviser proposed two fundamental solutions for cutting back on overheads: that the company reinvent itself as an assembly house with outsourcing production of components and that it should also get rid of its fleet of delivery vehicles and outsource that too.

They both provided the company with much more flexibility by cutting back its fixed costs in favour of variable costs. It could then focus on what it was good at, which was developing good products.

In a turnaround situation fundamental change may involve such things as radically changing the accounting system from a costly enterprise management system, which depends heavily on everybody knowing and doing their job perfectly, to a more simple order processing and accounting system that takes things back to more manageable basics.


Copyright (c) 2010 Alison Withers

About the Author:
From time to time even a successful business that is in the habit of constant monitoring of its activities to ensure continuous improvement may need to undertake fundamental change, as business rescue adviser Tony Groom at K2 business rescue tells writer Ali Withers.



Article Originally Published On: http://www.articlesnatch.com


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