EXECUTION

Hitting a Wall in Business: Which Blocks are in Your Wall?

Tom Garrity

October 31, 2024

Running a family business is never a straightforward journey. It requires an intricate balance between managing operations, navigating family dynamics, and keeping a clear strategic vision – for the company, ownership, and the family.   Sometimes, you hit a wall no matter how strong your team is. Sales stagnate, profits dwindle, and communication breaks down. As a family business consultant, I’ve seen countless situations where senior management teams are so caught up in day-to-day operations that they don’t realize they’re heading in the wrong direction­ – until it’s too late.

Take a quick look back at one of our client stories.

The Wake-Up Call: Sales stagnate and communication breaks down

Let’s rewind about 10 years. The business owner had started noticing significant drops in orders and shrinking profits. The finance reports were always delayed, leaving him in the dark about the true health of his company. He desperately tried to fix the situation, he brought in some consultants. Their feedback? “You’ve got some problems.”

That was it. No actionable insight, no strategic guidance – just a harsh reality check. It was a frustrating moment, but it also became a pivotal one for the owner. This stark feedback was the wake-up call he needed to make a critical decision. He hired a new CFO who could bring financial clarity and structure to the business. This move was a game-changer and sparked the beginning of a turnaround.

But as we all know, business is never smooth sailing.

Fast forward to 2019. Just as the company was finding its footing, COVID-19 hit, and suddenly everything was thrown into chaos once again. Orders with long lead times (6 months or more) dropped, communication within the company deteriorated, and the team pushed back on meeting the number of goals they had set.

The owner could feel that things were going off track, but he wasn’t sure how to fix it. Thankfully, his new CFO encouraged him to bring in Compass Point for a fresh perspective on both the business and team dynamics.

Common Challenges for Senior Management Teams

Over the years, I’ve worked with numerous businesses like this one, and while every company is unique, the challenges that cause senior management teams to hit a wall are often the same. Here are a few of the most common scenarios:

1. Lack of Financial Clarity

When financial reports are incomplete or consistently late, leadership teams are left with no way to accurately assess the health of the business. Without financial clarity, and an understanding of the story the financials are telling you, it’s impossible to make informed decisions about the future.

How it feels: As an owner, you’re blind to what is really happening. You’re making decisions based on gut instinct instead of solid data.

The impact: Without real-time financial insight, cash flow issues escalate and operational inefficiencies persist. Growth stalls and profits dwindle.

The solution: A strong CFO and a consultant with strong business acumen are critical here – someone who can bring order to the chaos and provide clear, actionable financial data.

2. Communication Breakdowns

Even the most talented senior management teams can experience communication problems. In a family business, these breakdowns are often exacerbated by emotional dynamics and personal relationships.

How it feels: Key information isn’t being shared across departments, goals aren’t clearly communicated, and suffocating tension begins to emerge where family members feel unheard, and misunderstood leading to increasing distance from one another. And there’s a lot of finger-pointing when things go wrong.

The impact: Misaligned expectations lead to unmet goals, stalled projects, and friction between team members. The business starts to feel like it’s spinning in circles.

The solution: Bringing in an outside consultant, adept in family business dynamics, to lead regular management team meetings and clarify roles and responsibilities, can help get everyone back on the same page.

3. Resistance to Goal Setting and Accountability

Another major issue for many businesses is the resistance to setting and meeting clear goals. Whether it’s because the team feels overwhelmed, hasn’t leaned into the company’s vision, or family member nepotism, this lack of accountability can drag the whole business down.

How it feels: Team members push back against setting specific, measurable goals. They might argue that they’re too busy or that the goals are unrealistic.

The impact: Without clear goals, the business lacks direction, and progress stalls. The owner becomes frustrated, and the team becomes disengaged.

The solution: An outside consultant can work with the leadership team to set achievable, actionable goals aligned with the vision of the business, and then hold everyone accountable for meeting them.

Breaking Through the Wall with the Help of Compass Point

Let’s circle back to the client story I opened with. When the owner and CFO brought in our team, their management team had hit “that wall” where sales were stagnant and communication was at an all-time low. The team dreaded meetings and they weren’t sure how to move forward. Through a combination of financial acumen, strong facilitation, and a deep understanding of family business dynamics, we helped them overcome their challenges and also learn to thrive as a team. In fact, by the end of our engagement, they went from dreading meetings to not wanting to miss them – and let’s not overlook a 36% increase in profit margin.

Click here to read the full story behind their success.

At Compass Point, we don’t just offer advice – we provide a roadmap for success. Our team of family business experts works closely with leadership teams to identify roadblocks and develop actionable strategies, and organizational health that strengthens both the business and the family.

ROI Delivered: Successful Businesses. Aligned Ownership. Stronger Families.

If you recognize any of the challenges listed above within your leadership team, now is the time to act. Don’t wait until your business is stuck in a rut. Reach out today to learn how Compass Point can help you navigate these challenges and come out stronger on the other side.

Your family, your business, and your legacy deserve nothing less.