Companies go into crisis because of bad management and come out of it because of good management; In other words, companies are in crisis because their leaders are unable to maintain or renew their competitive position with sufficient flexibility and adaptability to adapt to the changes that are constantly taking place in the environment.
It is frequent that in companies in crisis there are: situations of panic, rumors, fear that paralyzes from managers to apprentices; feeling that you are in a bottomless pit; postponement of decisions involving some type of risk; slow decision making; inability or disorientation regarding the measures to be taken; inability to react correctly to a situation that deteriorates day by day; lack of objectivity to analyze the situation; lack of creativity to apply the necessary measures. One of the definitive symptoms of the seriousness of the situation is the irreversible lack of liquidity that requires a suspension of payments. But before reaching that extreme, the company's control mechanisms - however rudimentary they may have been - have been sending repeated alarm signals.
Thus, many of the company liquidations that have occurred in the last decade could have been avoided if action had been taken immediately when the first symptoms manifested. If the disease is detected at its origins, the corresponding specialist or group of specialists is consulted and the therapy is applied, it is possible that the bad moment will be overcome.
Among the symptoms that are usually found in companies in crisis, we will list the following:
- decrease in sales volume; drop in market prices; insufficient margins; fall in profits; lack of adequate investment; increase in bad debt; liquidity problems; unfavorable environment; depressing rumors; inadequate mix of benefits; deterioration of the quality of the product / service; low competitiveness; rigid and expired structures; technological delay; deterioration of the corporate image; resistance to relinquish control in exchange for external capital contributions; obsolescence of the corporate purpose; positioning problems in the market; bad location geographic; unnecessary buildings or facilities; organizational rigidity; inefficient departments; supply problems; outdated production systems; poor inventory management; unreliability of information; poor economic-financial structure;impaired leadership ability, poor business culture, inappropriate human resources.
Faced with this, there are no standard solutions, each company needs a therapy adapted to its circumstances; Although there are a number of common measures.
It is essential to regain confidence and enthusiasm for a better future, increase resistance against adversity, improve the ability to fight… And it is necessary to raise the awareness of all company personnel and convince them that from the moment the refloating, many things will change, the more the worse the thing is. A model to follow could be: ask the series of questions that are presented and, through the implementation of the answers, build the most appropriate path:
- How is the company really? Diagnosis of the phase of the crisis you are in. Why has this situation been reached? Determine the main causes. What future prospects do you have? If there really is a future for her, define it. What do you want and what can you achieve? Priority: refloat, make profitable and consolidate. What is the new direction? Return to profit with a quick rudder hit. What new competitive position should you develop? An agile and flexible enough. How to get the new competitive position? Reviewing products, organization and costs. What changes should be made? Analyze the products, the market and the new functions. How much will these changes cost? Prepare restrictive budgets without affecting quality. When are they produced and who will carry them out? Set deadlines and responsible parties.
SMEs have only one solution, to improve their competitive capacity in an increasingly globalized market and, finally, it is never too late when happiness is good.
References:
* Of Refloating and Reengineering of Companies by Miguel Cañadas, Gestión 2000, 2da. Edition, 1998, Barcelona
