The problem of dying business is not new. If you want to find some tips on optimization follow the article.
You are interested in purchasing the company but the state of affairs in it, to put it mildly, leaves much to be desired. You need to reanimate a dying business. What to do?
The period of the business life, as a rule, is limited. The owners of small and medium-sized companies will inevitably face a situation where the company shows a long-term decline or even ceased to be profitable. In this case, the most simple solution is selling a business. Of course, the risks of investing in such businesses are quite large. Moreover, there are now many examples of the successful revival of various companies while a business life cycle.
American scientist, statistician and management consultant Edwards Deming has identified 15 principles of business, which are relevant to this day. Each item, in fact, a separate exit strategy for the company out of a crisis. Collectively, these strategies should allow the company to system optimization. This means that the firm can meet the needs of all associated groups of people – customers, employees, owners, suppliers and society in General. What are measures of bringing dying business to life?
Retain business and create jobs.
Strive for continuous improvement of products (services) to achieve competitiveness.. Dividends next quarter is not as important as the ability of the company to exist in 10-20 years. The constancy of purpose means acceptance of the leadership of the following obligations: innovation (technological, marketing, production) and long-term planning, allocation of resources to research and training, continuous improvement of products and services.
Develop new principles.
We have entered a new economic era. You can no longer tolerate the operation, which is performed by eye, it's time to stop using the materials with which one cannot work, people who do not know what their responsibilities are, and I'm afraid to ask, outdated teaching methods, an inadequate and ineffective leadership of the managers favorites.
Stop depending on control.
Check, control to improve the quality is always late, inefficient and expensive measures. When the truck with the products went through the gates of the enterprise, and later to care about the quality. It is already included in the products – good or bad. In many companies, the division's work quality is reduced only to inform the executives about the quantity of defective goods or the comparison of monthly indicators of the level of quality. The quality comes not through inspection but properly structured production process and its continuous improvement.
Put an end to the practice of evaluation and selection of suppliers only on price. Instead, minimize total cost. Try to find a single partner for every kind of supplies and to build up long term relationship based on loyalty and trust.
Continuously improve the system of production and service.
So you will improve quality and productivity and hence, reduce costs. Quality should be "embedded" in the products at the design stage. Every copy of your product should be considered as a one of a kind. Continuously improve test methods and listen to the opinions of consumers.
Enter training in the workplace.
Managers need to be trained so that they know about the company everything from raw materials to information about consumers.
Revise management methods on both the managers and production workers. Leaders must know the work of their subordinates and have the right to inform the top management about the necessary changes. That means to optimize teamwork.
Cast out fear so everyone can work more efficiently. Fear has many faces: fear of dismissal, error, annual certifications, etc. For example, there are cases when production workers for fear of punishment from managers to hide flaws that are regularly repeated. Strive to make employees enjoy work.
Destroy the barriers between departments.
Employees research, design, sales and manufacturing departments must work as a team to foresee problems that may arise during manufacture and operation of products and in the course of providing services.
Avoid empty slogans. Facing work calls like "increase productivity" only cause resentment because in most cases, poor quality and low productivity on the conscience of the system and, therefore, are not subject workers.
Eliminate the quantitative standards for workers.
In pursuit of the norm allowed a lot of defects. Working standards, rules, incentive or piece-rate pay – all this demonstration of inability to understand and properly organize the work. You should replace quantitative tasks competent and reasonable leadership.
Eliminate management by objectives.
Set internal goals (e.g. to reduce next year's costs for warranty service by 10%) without specifying the method of achieving them will not give the result. Management by numerical goals is an attempt to control, not knowing what to do. In fact, all is reduced to the standard control through fear.
Remove obstacles that prevent people proud of their skill. For example, give up the annual evaluation and rating. Rating people according to their contribution rewards successful under the existing system but does not encourage attempts to improve this system.
Enter a comprehensive training program and self-improvement.
The organization needs not just good people but good people, skills which are developed through education.
Make everyone in the company worked on fundamental changes and do it collectively. Develop a phased transformation plan, and divide responsibility and authority between employees. It is desirable that the remuneration of employees was linked to specific outputs. For example, an investor who bought a plant for the production of building materials offered employees the following payment scheme. During the first six months, remuneration consisted only of the fixed part. Then, when the company plan was to achieve breakeven, the fixed component was reduced by 30%, but it added a certain percentage of company profits. The extra bonuses by results of work were introduced to the Commercial Director and sales managers. The advantage of this compensation plan is that employees do not find themselves compelled to restrict themselves during the planning period, a non-profit firm. They are pre-focused on achieving company sustainability, and to maximize the results of their activities.
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