How to turn around a company

Photo Credit: Traffic signal Guy 14
Photo Credit: Traffic signal Guy 14

A couple of years ago I had some discussions with Solera Capital about taking on a role in Europe leading the change at a company called Audatex, an insurance claims adjustment business.

Solera explained their simple, three part philosophy that they apply to managment of their acquired companies:

  • 30/30
  • 80/20
  • 90/10

30/30 – Every manager who controls resources is asked to come up with a workable plan to achieve 30% greater output using 30% less inputs.

80/20 – Every person in the acquired organisation is asked to drop 80% of their projects, to-dos, reports and focus on the 20% that they personally decide are the most important and valuable activities.  Solera are brutal in this process – if somebody has 20 projects, they must stop 16 and focus on 4.  They are not allowed to choose 5.

90/10 – If anybody does not achieve their objectives, they receive 10% of the “blame”.  90% goes to their boss.  The only reasons why somebody will not meet their objectives are that they a) don’t understand their objectives, b) don’t have the resources necesary to achieve their objectives or c) are not motivated to meet their objectives.  a) is bosses’ fault. b) is bosses’ fault.  c) is a personal fault, but the boss should have intervened and replaced the individual with somebody with the right motivation to take advantage of the opportunity.

Clear, brutal, and requires tough decisions; but highly effective looking at Solera’s track record.

Author: Conor Neill

Hi, I’m Conor Neill, an Entrepreneur and Teacher at IESE Business School. I speak about Moving People to Action.

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