Proactive Leadership Is the Key To Saving Forced Restructuring

It is hard to remember the US economy experiencing such a rapid slowdown in many decades. Out of fear and uncertainty, consumers-this includes individuals and businesses-have stopped spending altogether except for necessities. Subsequently, almost every business has felt the pain of this slowdown. In these tough and uncertain times, it is a business leader’s obligation to step up. It’s time to make those tough decisions, we can’t avoid the following any longer:

  1. Prune the tree: Unless you trim dead and unhealthy limbs, sometimes even dramatically, fruit trees do not consistently produce fruit. Business leaders need to adopt this same approach and lay off marginal performers for the sake of entire organization.
  2. Scale back discretionary spending. Only spend if there is a measurable return.
  3. Evaluate the financial aspect of all products and services: Consider if there is a fair return on each and make the decisions to either increase prices or eliminate the offering.
  4. Drive cash generation by tightening up control of the payable and receivable management processes.
  5. Put better purchasing processes in place that negotiate order parameters such as smaller lot sizes, shorter leadtimes, longer payable cycles and even use of consignment inventory.
  6. Restructure the materials and production disciplines to create major inventory reductions.
  7. Focus on driving sales. If needed, invest more of your resources in selling products and servicing customers.

Tough times call for leadership to focus on those make-or-break decisions they have been putting off. This may mean partnering with people that have helped others avoid bankruptcy and forced restructuring. Make these important decisions today. It’s your opportunity to exert some control over the future rather than reacting to it.

Posted in Blog Post, Restructuring Businesses and Struggling Businesses


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