Three questions to jumpstart your turnaround

As a general rule, I don’t recommend “jumpstarting” a major turnaround initiative. Careful planning, goal setting, preparation, and analysis are essential; still, though, I thought I would offer some advice to those who are plotting a critical course change for their organization, particularly if it has been facing a sustained financial decline.

In my book, I spend a fair bit of time describing the organization’s culture and how best to manage it during a time of change. Culture is, in my experience, often under-appreciated and certainly under-represented in many turnaround projects, so that’s why I dive a bit deeper there. Additionally, there’s no simple blueprint for how to launch an intervention designed to alter the trajectory of an organization in trouble. Rather, there are important principles and approaches that are worth considering and which I outline in my book.

Still though, I often hear that it can be a daunting task for a leadership team to begin the planning process. I often find it helpful to nudge the kickoff planning by asking three questions:

  1. Looking at the current (or most recently completed) year, what are the specific reasons for negative variances? This “blame pie” needs to be clear and well quantified. I’m often surprised by the number of times I encounter an organization where there is lack of clarity and an incomplete understanding of the depth of the hole they’re actually sitting in.
  2. What relatively minor changes and tweaks must be made in order to improve performance? These might best be considered “the low hanging fruit” and typically there’s a long list of possibilities here. Benchmarking and reviewing industry best-practice key performance indicators will be an essential part of this process. For the lowest hanging fruit on that list, it will be important to understand and uncover the historical barriers to success.
  3. What are the sledgehammer opportunities? No one wants to go here, believe me, but if an organization must in order to survive, I suggest that there should be very few sacred cows; everything should be on the table. Here, I suggest that organizations quantify the full impact of the possible divestiture of its programs (services, products, divisions, etc.). It’s helpful to think about this from the perspective of “the four values” which I describe here.

Again, you never want to “jumpstart” something this big, this impactful, this essential… but I pose these questions and launch the analytical and planning phase with this as a framework to help organize thinking and to allow leaders and other participants a chance to gain common understanding which can help facilitate the development of a formal turnaround plan.

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