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Kenneth W. Keller: Turning a company around begins with the owner

Brain Food for Business People

Posted: February 9, 2010 6:29 p.m.
Updated: February 10, 2010 4:55 a.m.
 

Here is a quick method to decide if you should read this column. If you are happy, delighted and satisfied with how your company is running and the results are just what you want, read another column in the paper.  

If, on the other hand, you are unhappy, dissatisfied and believe your company should have more revenue, stronger cash flow, better clients and more profits, this was written for you.  

Set aside the media talk, personal belief system and feelings about the economy. If you take the time to really examine what is taking place, you will realize there is a functioning economy — some companies are growing, some are doing very well and some are not doing well at all.

That your company is not performing to the level you want is a function of more than a few things — all of which are under the realm of the owner.  

The choice is simple: You can either continue to put up with the business turbulence you have been experiencing or you can do something about it.

What does it take to arrive at that point? It takes real anger at what you are enduring. It’s a Howard Beale moment from the 1976 movie “Network” — “I’m as mad as hell, and I’m not going to take this anymore!”

When a company is under-performing, the owner looks first at the employees for improvement, and not in the mirror.

The employees look to the owner first to do what needs to be done for the betterment of the company, to make decisive decisions, to lead from the front.

No one else in the company is going to lead the change to a better future except the owner. The analogy is that the owner is the pilot of a plane and the employees are the passengers. The passengers don’t know how to fly the plane and the owner doesn’t want anyone but himself or herself at the controls. Owners know instinctively to look for a parachute if the employees are flying the plane.   

Turning around a company means the owner has to be the first to change. The leader has to be present, the leader has to have a plan, the leader has to lead by example and the leader has to take action. The leader needs to do what needs to be done, however unpleasant that might be.

“Being present” means just what it says. It means to be in the organization, present and accounted for, leading by example every day. If the owner isn’t visible, setting an example in terms of work ethic, productivity, leadership and communication, the organization will not turn around by itself. Things will go from bad to worse.  

It is essential to have a plan. Good leaders have a plan and they communicate it continuously. No decent plan was ever a secret from the people who were supposed to execute it.

Taking action is up to the owner. The owner signs the paychecks, approves the invoices and owns the shares. No one else can do what the owner can to improve the company; if someone else on the payroll could do it, they would have stepped up.

Being the owner is often a lonely endeavor; facing the brutal facts and dealing with them, one by one, can only be done by the person in charge.   

There is a certain point where owners fail in their attempts to change. It is where most people fail when they say they want to change. It is the point of taking action.

An owner will grumble, grouse and say he or she do not like the way things are. He or she knows what needs to be done yet, when it comes to making the decisions to turn the enterprise around, the owner fails to implement the decision. The owner wimps out under some pretext or excuse.

Because the owner does not move forward and does not do what need to be done, the organization suffers by continuing to tolerate under-performance.

But something more important is lost: The respect for the owner by his or her employees. What happens on a daily basis in an organization is not any great secret to those that work there.

Everyone knows how to make the place better; the employees know who makes a contribution and who doesn’t; they see where money, time and other resources are wasted; they know which clients aren’t worth having and what vendors deliver on promises and those that don’t.

The message is clear: Improving the performance of a company begins with the owner.

Other parties also have responsibilities for improving performance which will be explored the next two columns.

Ken Keller is president of Renaissance Executive Forums, which brings business owners together in facilitated peer advisory boards. His column reflects his own views and not necessarily those of The Signal. “Brain Food for Business People” appears Wednesdays in The Signal.

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