Think-it - Organisational Turnaround

Organisation turnaround is a  challenging task. During the life of an organisation, times come when it becomes necessary to navigate through a period of crisis or uncertainty, and make the necessary changes to improve its performance and get back on track. These changes may include reorganisation, restructuring, cost-cutting, product innovation, and other measures to restore the company's financial health and competitiveness.

Many factors are responsible for such turnarounds, such as changes in the market, economic downturns, leadership failures, and internal operational issues. Regardless of the cause, it is essential to take immediate and decisive action to address the problems and create a plan for recovery. 

One critical step in a turnaround is to identify the root causes of the organisation’s problems. This requires a thorough analysis of the company's financial and operational data, as well as an assessment of the external factors that may be affecting its performance. Once the causes have been identified, a comprehensive plan can be developed to address them.

The first priority in a turnaround plan is often to stabilise the company's financial position. This may involve negotiating with creditors, restructuring debt, and improving cash flow management. It is also essential to evaluate the company's cost structure and identify areas where costs can be reduced without negatively impacting the company's ability to deliver products or services. This step was so vividly captured by the quote from Lou Gerstner - CEO of IBM. He was asked by a reporter about the company strategy at the time when IBM was losing one Million US$ a day. He replied  "the last thing IBM needs right now is a vision, the first step is to  stop the bleeding”.

Another critical aspect of a turnaround is to focus on product innovation and customer experience. This requires a deep understanding of the customer's needs and preferences and a willingness to invest in research and development to create new and better products. It also involves building a customer-centric culture that values feedback and continually strives to improve the customer experience. This is what Apple Inc. did under the leadership of Steve Jobs. It developed the iPod that turned around the fortunes of Apple.

Leadership is also critical in a corporate turnaround. A company's leaders must be willing to make tough decisions, take responsibility for the company's problems, and communicate openly and transparently with employees and stakeholders. They must also inspire and motivate employees to support the turnaround plan and work together to achieve the company's goals. Allama Iqbal has captured the very essence of leadership in the following couplet.

Nigah Buland, Sukhan Dil Nawaz, Jaan Pursouz

Yehi Hai Rakht-e-Safar Mir-e-Karwan Ke Liye 

(High ambition, winsome speech, a passionate soul—This is all the luggage for a leader of the Caravan) 

1. He must be visionary.

2. He must be able to sell his plan to his team.

3. He must be sensitive to changes all around.

It is not an easy task for the visionary to sell his plan because what he sees nobody can see. That is where his character shows the way forward. Is he an upright person or an opportunist?

Finally, it is essential to measure the organisation’s progress and adjust the turnaround plan as necessary. This requires ongoing monitoring of key performance indicators, such as revenue growth, profitability, customer satisfaction, and employee engagement. Regular updates and communication with employees and stakeholders can help ensure everyone is aligned and working toward the same goals.

In conclusion, organisational turnarounds are challenging but are necessary processes for organisations facing financial and operational difficulties. To achieve a successful turnaround, organisations must identify the root causes of their problems, develop a comprehensive plan, stabilise their financial position, focus on innovation and customer experience, have strong leadership, and measure their progress continually. With the right strategy, leadership, and execution, a company can emerge stronger and more competitive than ever before.

Have a nice day and get your head down to identify root causes to your problems.