PATRICK O'CONNOR, director of Sloan Managers, explains why businesses sometimes need to assume the recovery position. Recovery is the wake up call that points the way to a more successful business. It is the point when the business owner, or chief executive, realises that executive action alone is unlikely to deliver the expected results and that deeper analysis is required.

The reason the solution is elusive to chief executives and their functional managers is that the problem is usually a collection of issues external and internal that impact either the future direction of the business, or the underlying structure of the current company or both.

Symptoms may appear in one department while the underlying causes lie elsewhere.

Functional managers are therefore less likely to spot the strategic and structural importance of these issues, while the chief executive who may see the bigger picture, will inevitably not have the time to carry out the detailed investigations required.

One case is a contract technical production and services business which asked for help because it was making losses, experiencing declining sales and had too few customers.

Executives had identified this trend a year before and had recruited a managing director with a sales background to drive the necessary business development.

After nearly a year of further frustration, they realised sales were still not forthcoming and the MD was halfway out of the door.

New markets

With the chairman's clear brief and the urgency of the situation, a business recovery team analysed the company's key markets and found that they had either disappeared to lower production cost economies, or were otherwise uneconomic and unprofitable.

In this case, even good sales results into the same markets would have been bad news. New markets were identified by the recovery team and a healthy order pipeline was developed.

However, further issues began to emerge when it became apparent that the business was unable to get the orders out of the door.

The operations team was unable to handle the new orders and felt it had reached production capacity. Further analysis identified a long and intertwined list of issues related to production flow, materials handling methods, control systems and quality management, resulting in a hardworking and busy workforce that was not very productive.

The same work was effectively being done at least three times, largely due to rectification, because quality was at the end of the line,' rather than part of the production flow process.

This meant that new, hard-won customers were complaining of a lack of reliability, incomplete orders and delivery of faulty components.

The operation was experiencing wheelspin' busy and hard working, but getting nowhere fast.

Following further analysis, a detailed recovery action plan was developed and performance-managed to resolve or review actions and issues every step of the way.

The result was to improve performance, on a variety of fronts, from about 25 per cent to 95 per cent. Capacity was increased by almost 400 per cent with no change in the workforce.

Objective analysis

As a result of these actions, the business was realigned to its new markets and strategic direction, and its underlying operating structures were fully repaired.

This could not have been achieved in any reasonable time without proper objective analysis and without what we refer to as joined-up thinking'.

Business recovery managers are often retained to co-ordinate the recovery process, supporting management and staff working substantially more effectively and efficiently, with the capacity for future growth and development.

Large corporations have their own corporate development managers.

You can borrow them just when you need them.

You can even avoid the cost and pain of the decline and recovery cycle by having an analysis and review of your business direction, markets and operating performance and by getting joined-up thinking working for you.

n Sloan Managers, call 01491 845505 www.sloanmanagers.co.uk