3 Key Aspects of a Successful Business Turnaround

The fallout from a tragic global pandemic has thousands of companies in perilous situations. Unfortunately, many companies won’t make it out. While some found ways to leverage the circumstances for growth, many of the remaining were left languishing — the business equivalent of Adam Grant’s recent op-ed: not doomed, but not exactly thriving. Although COVID-19 still looms large, 2021 can become the year of the turnaround for companies — offering growth opportunities to employees — not just another year of hardship.

No two turnarounds are identical, but most are created from the same basic elements. A successful turnaround begins with asking the right questions and developing a deep understanding of where resources can be effectively allocated. You need the right team in place to analyze the data — but equally critical is taking on the initiative to follow where the analysis leads.

Focusing on data, strategy, and human capital are the three key elements to develop an intrinsic strategy to lead your company towards a thriving future and booming culture.

1. Analytics and Data: Driving Your Future

Data is the necessary starting point of a successful turnaround for two main reasons. First, it tells you where you are in terms of performance across domains (sales, client satisfaction, product, operations, finance, etc.). Second, it tells you how you got there. Ideally, the retrospective analysis would reveal that organizational trends reconcile with stated values, goals, and strategies. When that’s not the case, the silver lining is that you can now identify where the weak spots are and develop a strategy to better align with your values and goals for the future.

In my experience, a common problem often uncovered through this level of analysis is that businesses unknowingly focus on (and often try to grow) unprofitable segments. It could be a big-name client that is losing them money or a disaggregated pricing structure that leads to significant lost income opportunities. Other times, it is a small piece of overlooked business that could be incredibly profitable and has great growth potential.

In the end, performing a deep dive into the data gives you the hard facts that help you make accurate decisions about the business. Data analysis is at the core of operations, and without it, steering a turnaround is like trying to beat an escape room without any clues. You know where you want to go, but how to get there from your current position is a mystery that only good data and analytics can solve.

Today, the most successful companies regularly perform deep dives into their data to maximize their resources and focus on growing the right segments of their business. Good data gives direction. Good analytics are actionable. With both, you’re on a path to developing a successful turnaround strategy and creating valuable career growth opportunities for your people.

2. Strategy: Your Roadmap

A well-designed strategy is the foundation of a successful turnaround. This includes a concisely articulated plan consisting of actionable steps and clear goals. The analytics performed are the primary building blocks of your strategy. Next, layer on the targeted/desired aspects of your business to refine the focus. Finally, assess with surgical precision the most effective use of available resources to implement the changes needed to achieve your goals.

When developing your strategy, common considerations include your product offering, customer segmentation, and back-end servicing model, among other key elements of your business. Examples of questions to ask are:

● Are your products being commoditized, and how do you pivot your offering to include relevant premium services?
● Is there a new customer base to pursue, and how do you provide the products and services that they are looking for?
● If your legacy business is still vital, how do you update your offerings while retaining the core competencies?
● Can you improve your existing products from a cost and delivery perspective?
● Where can you infuse technology to make the company more efficient and effective for both the suppliers and end-users of the goods and services?
● What infrastructure is required to efficiently service your clients while growing the front end of your business?

These questions can identify the opportunities that will drive significant sales growth, cost savings and put you on a path to a healthier business model that is meeting today’s challenges.

3. People: You’ll Go Farther Together

A successful turnaround begins at the top and hinges on unification around the vision that leadership presents — don’t forget: your people matter. And they are watching. Within a business, your team will embrace change if it’s being modeled and marketed consistently. Those executing any changes must buy into the plan, acknowledge the role they play in its implementation, and clearly understand how its success benefits both them and the company as a whole.

The leader’s role is to recognize where your team stands on the changes and bring a critical mass on board to implement them. In my experience, 1/3 will embrace the change, 1/3 will be on the fence waiting to see leadership’s commitment, and 1/3 of your employees will initially exhibit some reluctance to change. Find a way to empower the 1/3 of early adopters to drive the change throughout the organization. This group of committed, self-motivate employees will inspire the transformation across the employee and stakeholder bases.

You must be the one to empower your people by showing them you’re committed to the change, but it’s also important to recognize that the change can positively impact them. Show them actionable ways that the turnaround will make an imprint on their lives, and watch their motivation and inspiration grow.

Putting It All Together

Here, you have the elements of a successful turnaround: good analytics, solid strategy, and the right people. Even armed with this knowledge, the outset of this task may seem daunting, but it is an opportunity to build a better, stronger business in reality. One that not only fulfills the evolving needs of customers, but can also provide maximum value to its employees with the promise of being fit for future growth.