How to Tell If a Turnaround Is Working

When a weak franchise system attempts to change course, how can franchise owners recognize early on that a turnaround seems to be working? A high-tech strategy consultant and writer, Steve Tobak, shares three benchmarks to watch out for.

Of course, every company and turnaround is different, but in my experience, irrespective of company size, here’s what folks should be looking for in terms of evident improvement and timeframe:

1. Within one to two quarters, a turnaround plan should be in place and initiated.
2. Within two to three quarters, behavior and operating change should be evident to employees, customers and shareholders, improving morale and confidence.
3. Within three to four quarters, operating fundamentals should show marked improvement.

It’s true that company insiders – officers and directors – are the only ones who really know what’s going on. But if change isn’t evident to outsiders - sparking improvement in investor and customer confidence - in a few quarters, then I’d say the turnaround plan might be flawed.