The 3 Keys to a Successful Turnaround

Beat turnaround overwhelm with these simple first steps.

You’re in charge of your business … and it’s not working! Your gut tells you it’s not; your metrics say it’s not. You’re going to need to lead the change.

Entire libraries have been written about “Leading Change.” It won’t be hard for you to gain detailed tactical knowledge about this critical effort.

But fewer people talk about the human experience of being the person who is responsible for this course correction. The sheer magnitude of the project can be overwhelming. In the face of multiple urgent problems, where do you even start? 

Having faced just this overwhelm as a CEO in multiple turnarounds, I’m offering three simple, down-and-dirty lessons that I found were critical to success. These three lessons cut across and contribute positively to the tactics written about elsewhere. If you aren’t sure where to start, start here.

Metrics – A boring foundation

One way or another, the business is currently not meeting its financial requirements. To establish a baseline and measure improvement, you need the right metrics, provided on a tempo that meets your needs.

Which metrics? It depends. But in addition to ones that might be specific to your business, it’s hard to go wrong with Return on Invested Capital. 

I’ve seen the simple act of measuring Return on Invested Capital create a series of positive, self-reinforcing behaviors. These behaviors cascaded into diverse areas across the spectrum of business activities – including leadership changes, product development, facility improvements, and acquisition strategy.

In addition, when changes are declared, simply measuring progress towards the new, changed state creates urgency, focus and an appropriate sense of seriousness.  

Metrics may not be sexy, but making the right metrics visible across the organization is powerful.

Interviews & Discussions – The utility knife for communications

Of course, everyone says communication is key. There are so many communication concerns to address. The big WHY for the necessity of change. The big WHAT for the future state. Plus how to get there. How best to make the case in an authentic and energizing way? Who supports it? Who opposes it? 

But what kind of communication needs to happen first? The listening kind. You need to know now what you don’t know.  Don’t wait until months from now when all you can do is say, “I WISH I knew.”       

That’s why for me every turnaround starts with a listening tour of interviews and discussions. 

Genuine listening to frank answers to your questions creates the seeds from which all future conversation can take place. You get as close to the people, product, work, customer, or process as you need to be. You learn others’ reality in a way that gives you irreplaceable insights into vision, priorities, actions, sequencing, confidence in direction, and finally authentic messaging.

In one of my experiences, mostly I asked, “What are the things that are most broken?” And after that, “How do you think we should fix that?” By the time I was finished I possessed what the team later called “The List of 75.” 

Those conversations created the basis for everything that followed. For example, synthesizing items into themes: many broken systems equaled one theme of “Fix Systems.” But these conversations also were the foundation for check-backs and updates. They created an interactive dialog about needs, priorities, and possible fixes. And most importantly, they created awareness, then understanding, and finally, buy-in.  

Size Your Business to What the Market Accepts

Someone once said, “There are only two business problems: too much business and too little.” Comparing those two, the former – with too much business – has more off-ramps and save opportunities. You can turn down work; bring in resources; work more hours; etc. (Granted you take on reputational risk if you try and fail.)  Whereas “too little” business can kill you. In this case, you have assembled all the resources. Think of it like you’re a concert promoter. The venue is rented; the concessions are full; the vendors are ready. But no one came. And now you are threatened with going broke.

Better to size your resources and manage the surge than size too high and become roadkill. There are human consequences to resizing your business, up or especially down. If you find you have to shrink in size, you will need to approach the change with as much care and compassion as possible. Yet sometimes prudence calls on you to face reality: size your resources to what the market will accept – meaning “fund.” Failing to do so can bring much harsher consequences for everyone concerned.

Let me be clear that when I say these steps are simple, I don’t mean they are easy. But they will give you a workable start that can be applied to nearly any business. I hope they will help you steer your business through its course correction. 

Want help figuring it out? Feel free to get in touch.