Managing a
Turnaround in Four Vital Words
Rescuing
a business from peril is alternately scary and invigorating. You need to make
sure you go at it with a purpose and plan. Start with these basic concepts.
Executive director, Ed Kaplan Family Institute for Innovation
and Tech Entrepreneurship, Illinois Institute of Technology
I've done a few major turnarounds in my
career. The stakes are always enormous, involving multiple millions
of dollars, hundreds of jobs and thousands of related lives dependent on
keeping those jobs and the businesses that created them whole. These ventures
aren't easy and the tensions, uncertainties and emotions run very high and very
hot throughout the process. This is not a burden that anyone takes on lightly
and in many respects the feeling is exactly the same one that every
entrepreneur has on a regular basis when he or she realizes how many other
people are depending on them to make the right calls. In some cases, where just
surviving is a major challenge, no one is looking for applause and kudos--
you're just happy to get out on the other side alive and in one piece.
Fortunately, each of these undertakings (never
an especially great word to use in situations like these) was a success in
terms of accomplishing most of what we set out to do. While I was plenty tough
on the members of the management team and worse to the indifferent directors
and investors who had created the challenges and the chaos (many of whom didn't
hang around for too long), I was able to save nearly all of the jobs for the
people who had been trying as hard as they could to make their businesses successful
and to take care of their customers. It wasn't their fault the companies were
in trouble, but ultimately their finances, their families and their futures
were at risk. To a very large extent, it was on me to look out for them.
In one sad case, where the whole Dotcom world
had just imploded, no
amount of magic I could muster could put all of
the pieces of Humpty Dumpty back together again. When a business starts out as
mainly smoke and mirrors, it's most likely to end in tears and misery-- and
this I-builder baby was no exception. Chalk that one up to
"experience," which to me is basically what you get when you don't
get what you want. The Dotcom era didn't reward anyone's experience in any case
because we all found ourselves in a place where no one had ever been before,
and nothing properly prepares you for the first time. It was like feeling parts
of an elephant in the dark - everyone had a different piece of the puzzle and
no one could get their arms around the solution.
But at least I voluntarily chose to take on
the task and I knew what I was signing up for and I had, to a large extent,
control over my own and the business's destiny. In some other cases, and in
some startups, you find yourself in the midst of a tense turnaround whether you
planned it, desired it (almost never), anticipated it, or simply found that you
couldn't ignore or avoid it. I've seen this particular movie a few times and
it's even less enjoyable and more painful. But we bear on, boats against the
current, borne back ceaselessly into the past.
Nonetheless, the many trials and tribulations
of the last few decades have supplied valuable, applicable, and effective
lessons. Should you find yourself in the turnaround tornado,
willingly or not, here are four basic ideas to consider. I call them the 4
A's: Attitude, Altitude, Action and Acknowledgment.
Attitude is
where everything starts, starting with you. If you're gonna set out on this
most difficult journey to make things better, you better begin with the
complete conviction that it's worth spending the time and making the trip. You
need more than a rationale - you need a level of enthusiasm, confidence and
commitment that is completely contagious, along with an unrelenting passion and
a demonstrable sense of urgency. If you don't fiercely believe in the dream and
a better future, you won't be able to convince anyone else to join your
crusade. You need to proceed as if success is inevitable. Otherwise, it's not
worth the blood, sweat and tears that you will surely shed.
Turnarounds are all about a willingness to
sacrifice what we have at the moment for what we could become. There's no
certainty in these deals other than the guarantee that things must change and
the knowledge that, if you don't keep going, you'll never get there. All great
battles are lost in the middle, when the going gets toughest and the pain of
the process overcomes the early passion and enthusiasm and presents real
challenges to your persistence. You may be hanging by your fingernails, but you
need to always keep your head up high. Your attitude ultimately determines your
altitude.
Altitude is
about aiming high and shooting for the stars. No one wants to sign up to be
just okay or just as good as the next guy. If you're not planning on going all
the way to great, why would you go at all? Anyone can be
average, but average is officially over these days. "So what" is no
solution and you quickly find yourself slipping further into the swamp. You can
be absolutely certain that there will be changes in the plan along the way and
plenty of bumps and bruises as you progress, but to succeed you'll need to be
stubborn on the vision but flexible on the details, and always looking ahead.
Remember that someone always gets the best seat in the house. Why not you? And
shame on you if you don't ask for it. If you don't ask, the answer is always
"No".
You may not ultimately get all the way there,
but thinking small and selling yourself short is a self-fulfilling prophecy.
You've got to show your people a compelling vision and a clear path to achieve
the desired outcomes. The trip won't necessarily be short (turnarounds always
take longer and cost more than you hoped) or quick and easy, but the goals and
the end game have to be important to everyone involved as well as ones that
will make a real difference in people's lives. Once you know where you're
headed, you've got to get busy.
Action is
what brings the plan to life. Deciding on a course is nice but insufficient.
Prompt action is absolutely essential. You can't win a race with your mouth.
People pay far more attention to what you do than to what you say you're going to
do. When you do things right, your actions speak so loudly that there's no need
to hear what you've said and that's especially good news these days because no
one listens to anything anyway. They learn by observing and by doing and you
have to personally and consistently lead the charge.
Your actions need to be tightly focused,
clearly defined, and carefully measured. Tell your people what's expected of them
and what sacrifices will be required in order to accomplish what needs to be
done. Hold the team accountable and keep them mercilessly on schedule because
it's easy, amid the chaos, for schedules and deadlines to slip and for
important things to get lost in the cracks. Don't worry at the outset about
home runs and the long-term until you've addressed and resolved some of the
most immediate fires. Take on the biggest problems first, but understand that
even Superman couldn't solve most of them overnight. Short-term wins and early,
even modest, successes help to build the team's confidence, improve morale, and
restore long-lost momentum.
Acknowledgment is
basically all about the idea that nobody today does anything important all by
themselves and it's critical that, from the very beginning, you appreciate and
recognize the efforts, actions and step-by-step accomplishments of the key team
members. Don't overdo it and don't spread it so thin and wide that it loses any
credibility or value. Not everybody gets a trophy, but almost everyone will
have an opportunity to make a real contribution to the cause that needs to be
acknowledged. Silent gratitude isn't appreciated by anyone.
The last key element in the entire process is
trust. People are willing to be led on an uncertain journey as long as they
believe that they're not going alone, that their leaders are right there beside
them, and that the process and the pain will ultimately get them to a better
place. As you take things apart, let people go, change the ground rules, and
shake the foundations and the faith of the flock, you need to be sure that you
also show them a willingness to renew and rebuild the business, a commitment to
invest aggressively in a better future that they will share, and the courage to
continue even in the face of opposition, obstruction, and negativity. A shared
goal is an incredible source of power.
