Turnaround Strategy Quotes

Given that background, I was interested in what Steve Jobs might say about the future of Apple. His survival strategy for Apple, for all its skill and drama, was not going to propel Apple into the future. At that moment in time, Apple had less than 4 percent of the personal computer market. The de facto standard was Windows-Intel and there seemed to be no way for Apple to do more than just hang on to a tiny niche. In the summer of 1998, I got an opportunity to talk with Jobs again. I said, “Steve, this turnaround at Apple has been impressive. But everything we know about the PC business says that Apple cannot really push beyond a small niche position. The network effects are just too strong to upset the Wintel standard. So what are you trying to do in the longer term? What is the strategy?” He did not attack my argument. He didn’t agree with it, either. He just smiled and said, “I am going to wait for the next big thing.

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If Karl Lewin knew anything, it was how to manage in times of crisis. In fact, he’d recently overseen a quick and successful turnaround of European manufacturing operations at Global Foods, a multinational consumer products company. He was less sure, however, that the same sort of approach would be effective in his new role at the firm

The situational diagnosis conversation. In this conversation, you seek to understand how your new boss sees the STARS portfolio you have inherited. Are there elements of start-up, turnaround, accelerated growth, realignment, and sustaining success? How did the organization reach this point? What factors—both soft and hard—make this situation a challenge? What resources within the organization can you draw on? Your view may differ from your boss’s, but it is essential to grasp how she sees the situation. The expectations conversation. Your goal in this conversation is to understand and negotiate expectations. What does your new boss need you to do in the short term and in the medium term? What will constitute success? Critically, how will your performance be measured? When? You might conclude that your boss’s expectations are unrealistic and that you need to work to reset them. Also, as part of your broader campaign to secure early wins, discussed in the next chapter, keep in mind that it’s better to underpromise and overdeliver. The resource conversation. This conversation is essentially a negotiation for critical resources. What do you need to be successful? What do you need your boss to do? The resources need not be limited to funding or personnel. In a realignment, for example, you may need help from your boss to persuade the organization to confront the need for change. Key here is to focus your boss on the benefits and costs of what you can accomplish with different amounts of resources. The style conversation. This conversation is about how you and your new boss can best interact on an ongoing basis. What forms of communication does he prefer, and for what? Face-to-face? Voice, electronic? How often? What kinds of decisions does he want to be consulted on, and when can you make the call on your own? How do your styles differ, and what are the implications for the ways you should interact? The personal development conversation. Once you’re a few months into your new role, you can begin to discuss how you’re doing and what your developmental priorities should be. Where are you doing well? In what areas do you need to improve or do things differently? Are there projects or special assignments you could undertake (without sacrificing focus)? In practice, your

The situational diagnosis conversation. In this conversation, you seek to understand how your new boss sees the STARS portfolio you have inherited. Are there elements of start-up, turnaround, accelerated growth, realignment, and sustaining success?

start-up, turnaround, accelerated growth, realignment, and sustaining success. The STARS model

Situation: The company has weathered the start-up and turnaround or crisis stage, and is now in accelerating growth. While there is a good growth strategy, there are not enough good leaders to carry it out. The products and services are good, but many business processes are either missing or dysfunctional. Strategy: Don’t think in terms of doing it all yourself, but focus on creating a team of ‘A’ players. Your mindset: “get me the best in the world,” rather than just fill slots. Do an assessment on what’s working and not working, and address what’s missing that could make a difference— build a brand name, leverage new technology, and outsource missing or broken processes.

MATCH STRATEGY TO SITUATION—CHECKLIST What portfolio of STARS situations have you inherited? Which portions of your responsibilities are in start-up, turnaround, accelerated-growth, realignment, and sustaining-success modes? What are the implications for the challenges and opportunities you are likely to confront, and for the way you should approach accelerating your transition? What are the implications for your learning agenda? Do you need to understand only the technical side of the business, or is it critical that you understand culture and politics as well? What is the prevailing climate in your organization? What psychological transformations do you need to make, and how will you bring them about? How can you best lead change given the situations you face? Which of your skills and strengths are likely to be most valuable in your new situation, and which have the potential to get you into trouble? What are the implications for the team you need to build?

working identity involves revisiting the basic assumptions we use to evaluate possibilities. To illustrate what basic assumptions are, it is useful to think of our career choices as a pyramid with three levels (see figure 4-1).4 At the top of the pyramid lies what is most visible, to us and to the outside world: what job we hold in what setting. Dan, for example, was an executive in a high-tech company. One level below are the values and motivating factors that hold constant from job to job and company to company. These are what MIT career specialist Edgar Schein calls our “career anchors,” the competencies, preferences, and work-related values that we would be unwilling to give up if forced to make a choice.5 Dan’s experience has led him to value himself professionally as someone who excels at turnarounds—at making troubled companies healthy. He could perform this role on a smaller or larger scale (for example, big company or small start-up), in an advisory or a hands-on role, and as a manager or an owner, but the constant is that managerial challenge is what excites him. Dan’s turmoil over the offer of a “perfect job” that would have again robbed him of his family time, however, belies a conflict between his professional and personal values that is rooted at a deeper level. In his search, therefore, he has to plumb deeper: He must explore the final, bottom level of the pyramid to understand the basic assumptions—our mental maps about how the world works—that truly drive his behavior.

The situational diagnosis conversation. In this conversation, you seek to understand how your new boss sees the STARS portfolio you have inherited. Are there elements of start-up, turnaround, accelerated growth, realignment, and sustaining success? How did the organization reach this point? What factors—both soft and hard—make this situation a challenge? What resources within the organization can you draw on?

In the words of leadership guru Marshall Goldsmith, “What got you here won’t get you there.” Market share and revenue growth earn headlines, but you can’t achieve customer and revenue scale without scaling up your organization, in terms of the size and scope of your staff, as well as your financial, product, and technology strategy. If the organization doesn’t grow in lockstep with its revenues and customer base, things can quickly spiral out of control. For example, during a period of blitzscaling in the late 1980s and early 1990s, Oracle Corporation focused so single-mindedly on sales growth that its organization lagged badly on both technology (where it fell behind archrival Sybase’s) and finance and nearly went bankrupt as a result. It took the turnaround efforts of Ray Lane and Jeff Henley to stave off disaster and reposition Oracle for its later success.

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To do this, you must facilitate the creation of the "Third Number"-a stretch target in almost every area of the company.

You do this by asking, "What is the highest potential target we might be able to deliver in regard to this objective?

As my friend and coach, Nelson Searcy, says, “Hope is not a church strategy.

To fill two and a half times as many seats, an airline needs two and a half times as many passengers. Pan Am’s lock on international travel, however, had been weakening. Congress had launched an antitrust investigation of Pan Am’s monopoly on foreign routes in the 1950s. Populist voices complained that regulators were protecting industry giants rather than consumers. Some of the loudest complaints came from startups—Texas Air, Braniff, and, eventually, Southwest Airlines. The startups also brought new ideas to the industry. Hub and spoke. Flying to secondary airports. Reducing turnaround times to 20 minutes. Like Sam Walton’s supersized stores far outside cities, none of the ideas involved new technologies. They were all small changes in strategy that no one thought would amount to much. They were all S-type loonshots.

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