NEW YORK (TheStreet) -- When challenges threaten business performance, whether a shift in leadership or economic woes, it's sink or swim. Last year 44,111 businesses found themselves in rough waters and declared bankruptcy. But there are success stories and lessons to be learned from companies that come back from the brink.
When Bruce Barren arrived at M Line Holdings last year, the company was in dire straits. It had a negative net worth and was over-leveraged and starving for new capital to keep from bankruptcy or closed doors. On top of that, M Line was behind in its order deliveries, buried in rent arrearages and overdue employee payroll.
Less than 30 days after Barren joined, the California precision-parts supplier to the aerospace industry turned profitable, with major gains.
M Line had posted a $4.2 million loss on total revenues of $9.4 million in its fiscal year, Barren says. Its revenue is on target for a 60% gain this year, and earnings are expected to increase to $1.5 million, reflecting a $5.7 million turnaround.
M Line is one example of a company saving itself from financial ruin during particularly tough economic times. When experiencing corporate hardship, these four qualities are essential to improving performance for any business, in any industry:
Vision. Leadership is easy to come by in business, but a leader with a solid vision is rarer. When a business is struggling, a strong leader comes in with a goal-oriented roadmap executing a vision to pull the company out of the trenches. In addition to having a vision, it's important to communicate it clearly from the top down to create a sense of cohesion throughout the company.
M Line found an experienced, industry-accepted executive who focused on fixing immediate threats. Barren focused on growth by attracting new customers and rejuvenating old customers.
"We realized our attitude was wrong. Instead of a hard sell mentality, we shifted to a 'we want to earn your business' model which proved to be a more successful approach," Barren says.
"We realized our attitude was wrong. Instead of a 'hard sell' mentality, we shifted to a 'we want to earn your business' model which proved to be a more successful approach," Barren says.
When revamping business practices, it's not about reinventing the wheel. Establishing a vision from the existing business and assets is essential for identifying these opportunities. Like M Line, companies can find success in altering existing processes or leveraging existing resources, such as reaching out to current or past clients.
Execution. This is what turns the plan into action. Execution requires setting clear goals, consistently evaluating progress through set benchmarks and establishing an accountability process for all involved -- from leadership and down -- when goals are not met.
"At M Line, we designed a quick, acceptable and an all-inclusive action plan with various tactical items to get things done. Everyone was in agreement of this plan and matched that with determination to solve its problems," Barren says.
Without execution, goals aren't accomplished and a business will stall. Streamlined processes and goal setting is integral in reversing
Teamwork. We're taught the principles of teamwork from a young age, beginning with cleanup time during day care or as part of Little League. Ideally, these lessons should resonate for life, but sometimes it's easy to forget the importance of teamwork.
"What happened at M Line to create such a quick and startling result in such a short period of time can be attributed to teamwork, mixed with freshness of thought and a determination not to fail," Barren says.
Teamwork in business -- and many other facets of life -- requires collaboration, participation, effective communication, active listening and flexibility, among many other qualities.
Humility. This isn't the first characteristic named when one lists characteristics of a strong leader or business person, but this underrated quality helps keep drama out of the boardroom and maintain a clear and positive focus around goals.
"Much of our success can be attributed to a team who left their ego out of the formula," Barren says.
Humble managers and employees accept fault for their shortcomings and respond well to constructive criticism. Egos only promote negativity, restrict the free flow of ideas and bring down the team's morale.
When businesses are in the red and in dangerous positions, humility, along with vision, execution and leadership, are all important qualities for businesses, particularly the leadership team, to exhibit when making an overhaul.