Two Steps in a Successful Turnaround

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Any business leader can get their company in trouble. Even when he or she is the owner. Or maybe I should say, “Especially” when he or she is the owner.

In most surveys, turnaround specialists identify “poor management” is a leading cause of a company’s decline. After weeks or months or even years of denial, the existing leadership – unable or unwilling to admit to the worsening situation – may need to be replaced for the business to recover.

Let’s be honest: this is hard to do. Especially when the one in charge is also the one who signs the checks! Still, for a turnaround plan to succeed the business (and those in it) need to be led by someone capable of reversing and stabilizing things.

Which brings us to the first step of our dance: changing some – if not all – of the top leadership.

This isn’t about removing “bad managers” as much as it is about holding folks accountable and recognizing that new skills and mindsets are needed to make things better. Whether they believe it or not, those leading the business during its decline can get in the way of its renewal when they defend what they have done or what they believe.

Although it’s difficult, changing leaders sends powerful and positive signal that you’re not afraid of making tough moves to save the company.

The second step follows closely after the first: find and retain talented people. Easily said, but who are they?

First, look for those with a deep, institutional knowledge of the company and its operations. They may not be top performers, but they will understand the impact changes will have on the business and are usually willing to help make things better.

Second, keep in mind that a turnaround is a real opportunity to find new talent. Oftentimes the ones who bring the most value and insight are those who are waiting for an opportunity to be a part of something bigger than themselves, even if they are two or three levels removed from senior managers. Helping to “save a company” is a huge challenge; and may be enough to keep them with you throughout the turnaround.

While a successfully putting a business back on track is difficult, it can be impossible if existing managers – the ones in charge when things went south – are relied upon to lead the turnaround effort. Look deeper within the company. Chances are you’ll find a new set of leaders eager to be a part of a renewed organization.

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