Systems Over Willpower
A Paradigm Shift in Business Management
Introduction:
As a professional interim, I firmly believe in applying basic business principles during interim assignments.
During a recent assignment for a family office that had recently acquired the business I was assigned to, I encountered a profound insight that reinforced this perspective.
As we discussed how previous ownership had mistreated the business, causing its decline and subsequent sale, the family office owner shared an analogy that struck a chord with me. He said, “I see a business like a person. You wouldn’t mistreat a person; you would treat it respectfully and do the right thing by it.” This simple yet powerful analogy eloquently describes the basic building blocks for my interim leadership approach to the interim stewardship of businesses, especially those under stress.
Understanding the Business as a Person
Of course, the starting point of a fair proportion of my assignments involves generating positive cash flow through cost control and sales, without which they would not be able to survive without ever-greater levels of debt.
However, following this initial phase, a good interim will migrate into a stabilisation phase and prepare to hand over to more permanent leadership.
At this point, viewing a business as a living entity rather than a mere economic construct and shifting the focus from purely transactional management to a more holistic, empathetic approach has merit.
Like individuals, businesses have needs, potential, and vulnerabilities. They thrive when nurtured and falter when neglected. This perspective encourages us to consider a business’s emotional and psychological well-being, fostering a culture of respect and care.
Ultimately, I am an interim leader, and applying this style is undoubtedly better for the long-term good of the business and especially important for the benefit of any long-term leader who will ultimately inherit the fruits of my labour. So, let’s run with it.
The Consequences of Neglect
As a professional interim, many businesses I get involved with exhibit signs of neglect akin to those of a mistreated person. These signs include:
Erosion of Core Values: Just as a person might lose their sense of self-worth when mistreated, a business can stray from its core values and mission. This misalignment often leads to a loss of identity and purpose.
Demotivated Workforce: Employees are the lifeblood of any business. When a business is not treated with respect, it often manifests in poor employee morale and high turnover. Sensing the lack of respect and care, employees become disengaged, further exacerbating the business’s problems.
Customer Dissatisfaction: A neglected business fails to serve its customers effectively. Just as a person in distress might struggle to maintain relationships, a business under stress will find it challenging to meet customer expectations, leading to dissatisfaction and loss of loyalty.
Financial Strain: Financial health reflects the overall well-being of a business. Chronic neglect often results in mismanaged finances, leading to cash flow problems, mounting debts, and, ultimately, the risk of insolvency.
The Path to Rehabilitation
Addressing the issues of a stressed business requires a comprehensive, empathetic approach akin to rehabilitating a person in distress. Here are some strategies to consider:
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- Stabilise the business: It is vital that the business is stabilised and control is gained, or at the very least the negative activities are stopped and more postive actions are put in place to stop the business from sliding into more debt or even insolvency. Get the basics right as quickly as possible.
- Rediscover Core Values: Reconnecting with the business’s founding principles and mission can reignite its sense of purpose. This process involves engaging with all stakeholders to reaffirm what the business stands for and where it aims to go.
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- Foster a Positive Culture: Creating a respectful and inclusive workplace culture is crucial. This includes recognising and rewarding employee contributions, promoting open communication, and ensuring that the work environment is supportive and nurturing.
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- Engage with Customers: Building strong relationships with customers based on trust and respect can significantly improve a business’s standing. Regular feedback and transparent communication can help in understanding and meeting customer needs more effectively.
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- Financial Health Check: Conducting a thorough financial review to identify and address underlying issues is essential. This might involve restructuring debts, optimising operations, and ensuring robust financial planning and control mechanisms are in place.
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- Leadership with Empathy: Leadership plays a critical role in the rehabilitation of a business. Leaders who areempathetic, transparent, and visionary can inspire and drive positive change. They must lead by example, showing respect and care in every decision and action.
Conclusion
For a professional interim, recognising when to switch from a transactional approach to a longer-term approach is a judgment call. The analogy of treating a business like a person is not just a poetic notion but a practical guide to fostering healthier, more resilient organisations. By recognising and addressing the needs of a business with the same care and respect we would afford a person, we can create environments where businesses thrive. This approach not only mitigates stress and conflict but also paves the way for sustainable growth and success. As stewards of companies, albeit interim, we are responsible for nurturing them with the respect and care they deserve, ensuring they are well-positioned to achieve their full potential under longer-term leadership.
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