Detecting early signs of fading relevance and wavering stakeholder support allows businesses to pivot, breathe new life, and avoid the ultimate threat of liquidation. Adapt or dissolve is the essence of survival, and a critical component to preserving business continuity. Globally recognised business turnaround expert Michael Dorn, founder, and CEO of international turnaround firm the RTgroup, provides his insights.
In the current business landscape, the strength of a company’s relevance and stakeholder support is pivotal. “Recognising the signs of dwindling relevance and stakeholder enthusiasm early on, allows businesses the opportunity to strategically pivot, rejuvenate and thrive – preventing the drastic decision of liquidation. The choice lies between timely turnaround or the inevitable dissolution,” explains Dorn.
Here are four key pointers that Dorn believes leaders should consider as part of their planning to ensure they have a viable model, the support of their stakeholders, staff, financiers, industry and regulators to ensure business continuity:
Staying relevant in the market
In the wake of escalating business liquidations across South Africa, one question becomes paramount – does your product or service resonate with current and future market needs? Ensuring a distinctive niche, especially in alignment with evolving digital trends, is the crux of business survival. Take the instance of the iconic Yellow Pages once the go-to guide for every local need from electricians to plumbers. However, the tide of internet supremacy reduced its relevance, leading to its final UK print edition in 2019. Today, while it continues to exist as an online service directory, it struggles in the shadows of a giant like Google. A cautionary tale reminding businesses to adapt with the digital tide or face a similar fate.
Time the growth phase
Each phase of the business life cycle – growth, stagnation, and decline – has its own set of challenges, opportunities, and key aspects that need to be managed for the overall success of the business. “If a stagnant business stops investing in new products, adapting to market conditions, or maintaining company energy, morale and financial discipline, it will go into decline, which may become irreversible if rectification strategies are not put in place,” explains Dorn. Understanding the business cycle empowers leaders to make proactive decisions, ensuring business resilience and competitiveness. Recognising each stage – growth, stagnation, or decline – allows for the implementation of fitting strategies that drive optimal performance and long-term success.
Sound fundamentals for business management
“Businesses go under because of mismanagement. Sometimes crises are brought on by unexpected external forces, but if sound fundamentals are in place, including proactive leadership, solid financial, people and product management, it will almost always be possible to adapt and survive,” notes Dorn. By prioritising effective leadership and strategic agility, business leaders can steer the company through uncertainty, while robust financial practices provide a lifeline. Engaging employees and keeping a sharp customer focus can unlock innovative solutions and maintain customer brand loyalty. These fundamentals provide a resilient foundation that not only prevent mismanagement, but also position businesses for sustainable growth.
People first over Profit
Companies weaken when their numbers start dropping and a culture of complacency and negativity sets in. Of course profits matter, but prioritising people paves the way for a sustainable and successful turnaround. Strong businesses have sound financials, a culture of goal setting and winning, and leadership that is fact-based, strong, accountable and treats people well.
Long-term business continuity really relies on people taking ownership and responsibility for keeping their service and product offerings relevant and excellent.
