We have been actively involved with a number of companies that were "underperforming". By quickly determining the causes and creating solutions to sharpen the focus, we were able to decrease costs and make operational recommendations to fix the business performance.

A business may quickly become a turnaround because of an unforeseen circumstance such as a drastic change in its customer base or a significant quality problem. But typically, the slide into underperforming status is more insidious and it happens over a long period of time. Frequently, it can be hard to recognize the specific issues that need to be systematically and collectively addressed.

• The organization is working harder than necessary (there's a "corporate high blood pressure" in the air)
• "We have a cost problem" is a familiar refrain. There are excessive costs that are hard to eliminate (it's like a rising tide at the beach…before you realize it, the water is all around your feet)
• Getting things done - products shipped, services delivered - is a constant struggle
• The overall financial performance is unsatisfactory to shareholders, employees, outsiders (lenders, customers, vendors)

The sideways or downward slide generally starts with a lack of focus and a stale business definition -- an improper combination of operating entities, customers and products. Don't forget how the simple 80/20 rule can be used to assess how complex your business has become. The poor business definition can become exacerbated by inefficient operational conditions, weak management practices and negative industry forces.

See the next section for a more detailed look at characteristics of underperforming companies.