There will always be a turnaround out there, but today they are more prevalent due to Covid-19. The virus has had a crippling effect on many otherwise solid businesses.
If you are an accomplished executive that gets a call about a new role driving a turnaround, consider it carefully. While being part of a successful turnaround can be one of the most rewarding experiences of your career, it is critical to recognize that some are the result of market forces and others are due to a bad business model.
Assuming you have found a winner, you need to get prepared mentally for what you are about to tackle. You will face days when it seems like you’ve made no progress at all, or even gone backwards. Surround yourself with people that are pragmatic, but highly optimistic. Plan your work, and work your plan is a common phrase in business that will be more necessary in achieving a full turnaround than in almost any other situation. There are several fundamental steps here.
Take time upfront to diagnose the real problem(s) that created the situation and ascertain what has to be overcome.
Determine what metrics or objective data is available and can be used in assessing progress. Identify additional information needed to monitor performance and the frequency of measurement, which may be unique to the turnaround circumstances.
Evaluate the existing staff and get a good read on the capabilities of the core team you will initially need to rely on, as well as the overall mindset and morale of the organization.
Develop a focused plan, and make sure to contemplate the need to monitor other areas of the business that could break down or start to fall off. One of the things that makes a turnaround more challenging is the fact that other areas of the business are often more unstable, and you cannot rely on things to just keep moving along. You must watch for new issues and problems while at the same time focusing on “the critical few”.
Be frugal, but hire the talent needed (both permanent staff and external resources). It is almost a certainty that there are people on the legacy management team that will drag you down if you don’t deal with them. Topgrade the team, but do it in a methodical way.
Communicate, communicate, communicate. Talk to your board, keep all key constituents informed. And, make sure the full organization - to a person - is aware of the progress. Make them believers and recognize in the absence of information they may fear the worst and lose faith. They will cling to signs of momentum, but you have to articulate those accomplishments along the way.
Stay convicted, and never let your guard down. You will face challenges and have setbacks, but to lead a company through this kind of transition it is important that the team sees someone who is confident at all times that the issues can ultimately be overcome.
Celebrate the accomplishment of completed milestones and re-energize yourself and those working the hardest to drive the necessary change.
Where possible ask a board member or other well-respected party not directly involved with the turnaround to acknowledge the progress and convincingly express their ongoing support.
As you pull out of the situation begin to think strategically again. Be opportunistic, and make a few bets.
Constantly evaluate your progress against the original plan and decide when to declare victory. At some point it will be necessary to adjust the mindset of the organization, and establish new business objectives.
There are a limited number of executives who can drive a successful turnaround. It requires someone who is extremely tenacious. It takes a ton of energy. Make sure you and the core team have the right incentive plan locked down before you commit – that eventual payoff will sustain you and should not be underestimated.