Turning around a larger organization, or even a fairly small one, is a daunting task. It requires a rare blend of qualities from the team leading it and as well as a strong, much larger supporting cast. Fortunately, leaders don’t have to look far back in recent history for examples of successful rebounds.
General Electric CEO Jack Welch famously implemented a broad-based revamp of his sprawling organization when he took its top job in the 1980s, leaving the company much stronger than before.
David Miscavige, leader of the Scientology religion, effected a similar transformation within his organization when he became its leader around the same time.
Each organization is unique, as are the circumstances that demand transformation. However, these and other successful transformations contain helpful ideas for other leaders who see the need for change. Let’s take a closer look at some of the strategies they’ve used in the past — and continue to use today — to make the entities they lead stronger, more productive, and more resilient.
1. Understand the Full Scope of the Problem
Before your turnaround begins, you must have a comprehensive and granular understanding of what’s happening within your organization and thus what actually needs to be addressed.
There are several ways to do this, including SWOT and PACER analyses, say turnaround experts Tunde Lucaks and Chandra Venkat. You may need to use more than one method to gain full view of the problem(s) and likely solutions.
2. Prioritize Fixes According to Need
“Your most unhappy customers are your greatest source of learning,” Bill Gates once said.
That’s a rough, if imperfect, guidepost for your turnaround efforts. If you’ve identified significant customer-facing deficiencies, you need to fix those first to avoid further damage to your reputation.
Beyond these, prioritize fixes according to the impact you expect them to have on your operations. Straightforward adjustments likely to result in big operational improvements should get priority over incremental tweaks that probably won’t move the needle.
3. Right-Size Underperforming, Under-Contributing Departments
Underperforming departments (and employees) are easy targets during a turnaround. However, it’s not enough to simply reduce their headcount by an arbitrary percentage.
Any right-sizing must consider how they contribute to the organization as a whole and what, if anything, can be done to enhance that contribution afterward. Identifying where to make cuts is only the first step, and not the most important one; leaders must ensure those cuts leave the affected departments stronger and more productive.
4. Bring in Experts With Turnaround Experience
Your organization’s ideal leaders during good times are unlikely to be its ideal leaders during difficult times. Some of the most successful turnaround stories, including those of companies like Apple and FedEx, involved “new blood” brought in from outside the organization to effect the necessary changes.
In Apple’s case, the company’s board brought back one of its founders, reasoning that he was the best person to take it in a new direction more responsive to its customers’ needs.
5. Clearly Communicate With the Rank and File
Change is hard. Dramatic change of the sort we’re discussing here is especially difficult for affected employees and other stakeholders. Transparency is warranted throughout the process, from initial announcement through the endgame.
Clear and forthright communication with affected individuals is especially important, not just for decency’s sake but to minimize misunderstandings. Even if you feel you don’t “owe” stakeholders an explanation for the difficult but necessary decisions you’re making, being transparent means you’ll encounter less pushback and find yourself in a stronger position to overcome any that does occur.
6. Avoid the Blame Game
Recriminations are counterproductive under any circumstances, least of all a high-stakes turnaround effort during which everyone should be rowing in the same direction. What matters is not how you got here in the first place but how you and your team will meet the moment and move forward.
7. Help Employees Feel Like They’re Part of the Effort (And Working Toward a Shared Goal)
Teams composed of engaged employees are 22% more productive than their counterparts, according to an analysis by organizational dynamics expert John Baldoni. By involving each employee in the turnaround effort — a process that begins with transparent and clear initial communication — you may put them (and the effort itself) in a better position to succeed.
8. Plan Beyond the Inflection Point
Turnaround efforts do not always have well-defined ends. However, if they are well-planned, it should be clear when they’ve reached an inflection point where success begins to build on itself.
This might manifest as the first quarter of sales, revenue or net income growth at or above a predefined goal, or as the week during which a majority of internal teams meet their own more granular metrics, or something else entirely.
Whatever the case, your turnaround plan should reflect the fact that this is not the time to take your foot off the gas. On the contrary, it’s time to double down on what’s working and lean into the positive results thus far.
Turnarounds Don’t Happen All At Once
Indeed, the larger the organization, the longer it takes to turn around. The marine metaphor is apt here: A speedboat is far more nimble on the water than a cargo ship, all other things held equal.
The duration and complexity of successfully turning around a large corporate entity, nonprofit or government department is no reason not to try, of course. The alternative — doing nothing and hoping against hope that conditions improve on their own — is simply not an option.
As with any major initiative, what’s likely to make the difference in your upcoming turnaround effort is effective planning. These eight strategies should all factor into that plan, but they won’t be enough to get it across the finish line. A more granular gaming-out of the process that breaks it up into hundreds of discrete tasks, each with their own owners, deadlines and in-task milestones, is necessary. Close monitoring of each deliverable, as well as the overarching progression, must be done as well.
This work will take multiple quarters, if not years. Setbacks will inevitably occur. Little will come easily.
Yet it must be done. And no one is better placed than you to do it.