Have no fear
One of the problems that often comes about when trying to
turn around a business is actually a fear of making things
worse.
“Businesses are more durable than you think they are,”
Tognoni says. “You can push change pretty hard on a lot of
businesses and not break them. That is usually what paralyzes
people from making decisions. They are so afraid that if they
make one change, the whole house of cards is going to come
down. So they don’t make any change.”
Tognoni analyzed the company’s data and determined that
cuts needed to be made.
“You figure out the productivity that is the right level of productivity for doing everything in the business,” Tognoni says.
“Sales, marketing, product development, service and support.
You figure out what the right productivity is for those things
and then you cut your staff back to that productivity level. It’s
not rocket science. It’s just that most people have a hard time
doing it.”
Tognoni used a combination of data analysis and conversation with employees to figure out what moves needed to be
made.
“You either have a good judgment about what makes a good
salesperson or you don’t,” Tognoni says. “Most organizations
you go into, everybody knows who the good salespeople are
and who is just hanging on. The problem, many times, is that
people fail to act.”
Data is a critical factor in making decisions. Almost every
company has its own data that can be researched, and if it
doesn’t, Tognoni says there are always industry averages that
can be reviewed.
“At the end of the day, if you don’t have any good internal
data, you’ve got external data and you’ve got judgment,”
Tognoni says. “There’s a lot of judgment involved, but that’s
what they pay executives to do.”
Tognoni’s formula for personnel moves is a fairly simple one.
“If a company is going to make 100 sales per year and a moderate or average productivity staff salesperson should be able
to do 10 sales a year, you take 100 and divide by 10 and you
should have 10 salespeople,” Tognoni says. “If you find out you
have 20 salespeople, you cut 10 of them. It’s a little bit more
sophisticated than that, but that’s essentially what we do.”
While difficult moves are often necessary, you can do a lot for
the morale of those who are staying with the company by
showing a little empathy.
“When you’re doing a lot of changes to an organization, going
out and being rah-rah right after you’ve cut a bunch of jobs is
actually counterproductive,” Tognoni says. “People go, ‘You
want me to be excited when you just fired my friend.’ It’s a lowkey approach, but it’s a very direct approach, and we tell them
exactly why we do things. … We tell them why, and we try to
educate them about why decisions were made and then just
ask for patience.”
