Whilst reading the weekend papers I felt a sense of excitement for Messrs Series and Dunn when I came across this article https://www.thetimes.co.uk/article/dx-group-looks-for-turnaround-after-delivering-zero-annual-profit-sknfdzh20
I have encountered many a business who have faced the inevitable “especially challenging” year but despite the sense of abject failure that hangs over such an occasion there is often a desire for hope and optimism to prevail. A successful turnaround brings with it a wealth of accomplishments including, but not limited to, financial stability, job creation, cultural change, brand enhancement, product development and greater efficiencies not to mention sheer relief and maybe the opportunity for a decent night’s sleep!
Negative headlines are always an attraction to the reader but for me, zero annual profit were three little words overpowered by the strength of that lonely singleton – turnaround. It speaks volumes, it eludes positivity and it sends a strong message.
Vibrant Economies are not exclusive to a failure free landscape and if you do not believe me then please think Apple, Starbucks and Lego. One minute on the brink of bankruptcy and yet here they are today very much a part of the global business scene. Each organisation’s journey highlighting exceptional examples of leaders, who took risks, challenged norms and put their heads above the pulpit, not afraid to do it different.
However, where do you start when you are in such a predicament?
When undertaking a turnaround such as this experience highlights the need for a structured approach allowing the team to quickly identify and implement the most effective strategy:
Understand the current performance and strategy: we use various strategic tools to help break down the business, enabling us to understand clearly where the potential for the business lies, as well as identifying any inherent risks. Some common ones I use are:
Assess the future landscape: what is the most informed view our turnaround team can configure to assess areas such as:
Choose a strategy: based on our understanding of the businesses’ current and future position we choose the optimum approach for the business.
Considering the DX situation, I am pondering what the initial findings will be and how this will shape the outcome. For instance, they could choose to increase the size of the operation to benefit from economies of scale. If so, will they decide to do this through organic growth or acquisition? Alternatively, they could choose instead to focus on differentiation, honing in on two-person delivery and shrinking their turnover but maximising their margins. Another option could see them increasing the size of their freight operation as their chosen route to success.
Execution: crucially then, without which all the preceding is irrelevant, our turnaround team, must effectively deliver what they decide to do through timely execution and implementation. To be most effective this will involve changing the organisation both structurally and culturally. It will also be necessary to get the buy in of their customers, existing and new, together with suppliers, investors and lenders.
On this note, I wish Messrs Series and Dunn all the very best with their exciting quest of overhauling the DX Group and I look forward to reading a successful headline in due course.