Star Cycles There are 3 Cycles that will enable you to take any contract, in any situation to a platform from which you can grow that contract. In last week’s post, we provided you with a process to establish the current status of your contracts and to recognise the four situations that a contract can find itself in:  Start-up, Turnaround, Realignment, and Sustaining-Success using the STaRS model.

As a Facilities manager or Workplace Professional, It is important for you to understand and recognise these stages. You  grow a contract from a platform where you are clearly in control and are achieving success. You will not be able to grow that contract and deliver additional value unless you can understand where the contract is now, where it has been or how it got there. If you have not read our previous post in this series The 4 Stages of Contract Vulnerability it may assist you in making sense of this post. You can find it here.

The Sustaining Success platform is the only platform from which you can grow a contract. Contracts in the other three cycles Start-up, Realignment and Turnaround all need to be moved back to Sustaining Success if they and you are to be successful.

In this post, I want to take you through the cycles that you will need to guide your contracts through if you want to get back onto the Sustaining Success platform.

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  • To go from Start-up to Sustaining Success requires you to go through the Growth Cycle
  • To go from Realignment to Sustaining Success requires you to go through the Recovery Cycle
  • To go from Turnaround to Sustaining Success requires you to go through the Crisis Cycle

To fail in any one of these cycles means that the contract will slip down a rung on the ladder towards the bottom and eventual shutdown or termination. It is crucial therefore to know the three cycles.

1. Growth Cycle

All contracts at their beginning are in the Start-Up phase. Start-ups are naturally in a growth cycle. Here you are trying to implement new operating procedures, processes as well as new initiatives requiring change management. This is a high-energy growth environment where all things possible.

This is often referred to as the accelerated growth phase and this is what the a in STaRS stands for. In the Start-Up phase, you’re managing a rapidly growing initiative. You will need to secure existing service delivery mechanisms as well as implementing new services. You will be having to put in place structures and systems that will hopefully permit scaling of the initiative when you want to grow the contract.

As the model indicates, as you succeed you are able to introduce new initiatives through cross-selling and up-selling which take you back into the Start-Up phase. Continued success with the introduction of new products or services means that healthy contracts enter a virtuous circle or growth cycle alternating between Start-Up and Sustaining Success.

It is important to remember that you must ensure that you take all new initiatives to the Sustaining Success platform otherwise, failure from the Start-Up phase can lead to termination of that initiative or indeed in the case of a major failure, potential termination of the entire contract.

The accelerated growth cycle is a great place to be however on the flip side of Sustaining Success we have contracts that are in need of Realignment.

2. Recovery Cycle

The Recovery Cycle is where you are when you need to move a contract from Realignment to Sustaining Success.

A contract that is in need of realignment has almost certainly previously been a successful contract that has drifted off-course towards trouble. Drifting is generally as a result of internal complacency or an avoidable external influence rather than a one-off event. At this stage, it is not a crisis but storm clouds are on the horizon and if action is not taken then you may find yourself having to conduct a wholesale turnaround particularly if the existing leaders fail to see the need for the realignment.

Contracts are unlikely to go from a Sustaining Success platform directly to a Turnaround without going through the Realignment stage and it is important leaders recognise this stage. However, many contracts that are in need of recovery, are in denial about the situation and continue to believe that they are at the Sustaining Success stage.

It is unlikely that big changes are required but speed is essential, particularly if the business is starting to lose money or you are beginning to see that your best people are getting restless.

Realigning a contract usually means just redirecting its resources, such as by abandoning ageing product lines and developing new technologies.

3. Crisis Cycle

Failure to recognise the need for Realignment or to implement the recovery cycle will result in the contract needing the major surgery required in the Turnaround situation. In this situation, you are in Crisis model and need to act quickly.

No matter why this happened all is not lost in a Turnaround. Most teams know when the contract needs a turnaround and there is rarely an argument about the need to make big changes fast. The need for a Turnaround is characterised by clear signs that the contract is losing money, its best talent is jumping ship and the client is losing confidence in the ability of the team to meet their needs.

Turning around a failing contract requires new leadership to cut the contract down to a defendable core, fast. this needs to be executed before attempting the task of rebuilding to get the contract back to the Sustaining Success platform.

This is a painful process and often means changing the strategy, structure, skills, and even the culture in fundamental ways. But if successful, will mean that you are back in the Sustaining Success situation. A turnaround that achieves a return to the sustaining success platform can often lead to an increase in loyalty from your client as they see that you have their best interests at heart and are able to make the tough decisions required to make the contract a success.

However as illustrated by the Crisis Cycle, If efforts to turnaround the contract fail there is only one result, termination.

Conclusion

The better you are at reading the landscape, the more effective you can be at leveraging the system that you are in, the better you will be at applying your skills in ways that make the most impact.

Make sure that you know and can recognise the four situations: Start-up, Turnaround, Realignment, and Sustaining-Success. Understand how to execute what is required by the three cycles: Growth Cycle, Recovery Cycle, and Crisis Cycle.

In next week’s post, I will provide you with the 3rd lever which are the leadership skills required to execute and to move the contracts onto the platform from which you can grow.

Question: How have you managed to turnaround a contract and make it a success? Leave your comments below.