Turnarounds are among the toughest tasks in business. Seasoned leaders may see immediately what’s wrong with a firm, but steering clear of icebergs is a lot easier when they’re floating on the horizon, not 100m from your bow.
To save a sinking ship, you need to handle demoralised crews, excess weight and the rather urgent need to plot a new course before the fuel tanks run dry. It’s an experience former Mothercare CEO Simon Calver knows well. He took the wheel at the beleaguered babywear business in 2012, when its UK operations were deep in the red. Here's what he learned.
"We can always get caught in our own email traffic, but you need ruthless prioritisation in a turnaround situation. What are the two or three things that really move the needle forward? Once you know what’s required and have a few simple metrics behind it, you can make sure everyone in the organisation knows what that is and why. You’d be surprised how quickly you can move then, compared to having 25 things, because then people just get confused.
"At Mothercare, there was an increasing share of the baby and kids clothes markets going to supermarkets, which had scale and distribution advantages. Over time we became perceived as too expensive. So we fundamentally had to think about pricing strategy, offering essential ranges so we could get people in the stores and then upsell more traditional products and services.
"The challenge for leaders is that you need to be incredibly visible and give people confidence in the future, because if they lose that confidence they lose focus on the customer, accelerating your decline You’ve got to communicate so they understand why changes are happening, even when sometimes those changes can be difficult to stomach, so the company can be saved.
Find out the turnaround secret that saved Dreams beds here, or delve into the revival of the Co-op with its former boss Richard Pennycook. For the big picture, look at this research into why only 20 per cent of major turnarounds succeed, and what you can do about it.
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