Turnarounds are in the news these days. Political media are currently fueled by dueling debates about the merits of private equity firms and their turnaround tactics, including the impact on jobs. Business media report both on companies that have seemingly recovered from our economic tsunami and those that have yet to turnaround. In all cases, the key question is whether a company can sustain positive performance and continue to grow once it has turned around. With sustained growth, all constituents—employees, customers, investors, and the community at large—benefit.
In my experience leading successful business turnarounds in many different industries, the key challenge is to ask the right set of common questions. Specifically, finding answers to six key questions has led to consistent turnaround success and growth for companies ranging from a start-up to a multi-billion dollar worldwide organization.
If you are leading an organization in need of a turnaround or simply looking to improve your company’s performance, I urge you to thoughtfully consider your answers to each of the questions below.
1. Customers: What do they need to succeed and how can we be the best place for them to get it?
2. Competitors: Where are their strengths and weaknesses and how do we take market share from them?
3. Costs: Where are our opportunities to be more efficient and how to we improve our margins?
4. Capital: How do we ensure we have adequate investment resources and provide the best returns for our investors?
5. Community: How do we demonstrate social responsibility so strongly that the broader public views us as great partners?
6. Culture: How do we attract and retain the best team of people who can answer the first five questions today, and tomorrow when things change?
This “6-C” turnaround framework can be used as a starting point to assess your organization’s strengths and weaknesses. The answers to these six questions also hold the key to your company’s long-term success.
In particular, this framework points to the importance of culture. As legendary management expert Peter Drucker shared, “Culture eats strategy for breakfast.”