A Healthy S.W.O.T. for Unhealthy Business Units

Three steps to fixing your problem units.

You can do anything in life you want – you just can’t do everything.

Do you have under-performing locations or departments that report to you? It seems that every business has a thorn or two that aggravate management and consistently lag revenue targets. Perhaps you’ve been there. If you have several locations or departments to manage, chances are there are some pockets of stubborn challenges that need to be analyzed and fixed if possible.

The most difficult challenges are often too small to allocate a large block of your time and effort against, yet big enough to seem like a rock in your shoe.

You must prioritize your work. The fact you haven’t completely de-bugged your company or assigned departments doesn’t mean that you are not capable of fixing the problems. However, it may mean that there are not enough of you to go around You may not have the luxury of studying these problems and outlining solutions. Or, even if you do take time to find a solution, you may not have the time to implement your corrective changes.

Ways to solve your challenges while keeping your eye on the ball. Even though you can do the problem solving, you must keep the main thing – the main thing. You focus on your core business offers the highest ROI of you time. But, you can leverage your problem solving time and energies by strategically outsourcing these smaller challenges to an objective third party consultant. The benefit is two-fold:

  • You can finally address the problem without having to carve out a block ;of time to do it yourself. You can keep your attention focused on high return activities.
  • Secondly, solutions coming from third party consultants may be viewed as more objective by those impacted by the changes that mus follow the analysis. After all, at the end of analysis and recommendations come the implementation process which signal changes will be made.  It takes internal politics out of the process.

What if you uncover a “black hole”? The risk you run when you outsource the problem for a truly objective look by an outside source, you run the risk of learning the truth. Is the problem actually worse than you estimated? will it require major surgery of a massive infusion of capital to keep it afloat?

An example with “food for thought”. I was recently retained by a national restaurant chain with over 200 locations, to work on several of their local store marketing issues. Using the classic S.W.O.T., ((strengths, weaknesses, opportunities, and threats) approach, we spent several weeks delving into the operations and markets for each of thee stores. We started at the store-level and took an in-depth look at each location and surrounding market. Interview were conducted with managers, customers, potential customers, and a sampling of businesses from the surrounding communities that sourced the bulk of their business. We followed this with a competitive analysis. From this work we were able to formulate a detailed list of recommendations to turn around their business in these select markets.

Corporate was concerned that all of our digging and analysis would turn up more problems and create a costly punch-list of facility improvements. In short, they anticipated that our recommendations would call from them to pump more money into stores with flat or declining sales.

Cost-effective fixes. As our recommendations were drafted, they were pleasantly surprised that capital expenditures did NOT top the list of action steps we gave them to solve the problems of these under performers. In fact, in only a few of the markets did we recommend significant cap ex items.

Instead, many of the recommendations we made involved the people. Investing in training and coaching of key local staff and more outbound initiatives to build bridges to their target markets. Other solutions involve maintenance and cleaning issues that were inexpensive.  Some recommendations involved specific signage and promotion issues that could help the business grow without big price tags.

There are three things you can do today to solve your “rock-in-the-shoe” challenges.

  1. Review your financials or monthly business reports and pick out the top three that require your personal attention. then select the next 3 under performer that concern you but do not justify your full attention at this stage.
  2. Calculate or estimate the amount of money you think you are leaving on the table by not fixing these marginal players. Going through these metrics will provide you with a budget or range of dollars that you can justify investing in finding a solution to turn these units around.
  3. Identify a consultant with the experience required to review your problem and be able to bring you cost-effective solutions. and, even better to find a consultant willing to be accountable for the implementation of the recommendations following the diagnostic work.

The bottom line is that solutions from a fresh perspective, even from those who are not working directly in your industry, will often surprise you. You may discover that you can fix it for a lot less than you estimated. Often small investments of time and attention in providing strategic guidance to key people in the under preforming unit can do wonders.