—“If you were given a new position as head of a large, multi-national company, which was still around in spite of poor to abysmal management over the course of 100 or so years, how long do you think it would take you to turn that company around and set it on the right track?
Assuming you have the knowledge and acumen for the job from years of experience successfully running other, smaller, but similar companies.
Do you think you’d make any mistakes along the way? Do things that seem like mistakes to the casual observer, who doesn’t have your same experience, information, and understanding of the situation?
How long before you start to see real results?
Two years?
Five years?
Ten?
Twenty?
What about two and a half months?”—Danny O’Quillinan
In my experience, almost always, the problems are :
1) Debt that can’t be exited.
2) Maximized rent-seeking that can’t be exited. (pensions etc)
3) A board or management that can’t be exited, and Incentives that are perversely against the interests of the business.
4) Capital Equipment or Information Systems, Contractual relations that are deadly but extremely difficult to change without causing even worse damage to the business immediately.
5) Poor quality employees that cannot be trained to compete in the new market.
6) The loss of the upper 10-20% of the best talent leaving you with little to work with – talent is the most scarce transitional capital.
7) Inability to attract the talent necessary to restore competitive excellence.
8) You’ve been hired too late, and they either want a fall guy, an organized end to the business, a sale to a competitor at fire sale prices. Or they’re stupid and they think a miracle will happen.
The principle problem in restoring a company is whether you are able to bring in enough talent to make the change with a good enough plan, and enough capital to do it with, and have enough time to do it with, and if once you achieve it, the end product is worth more than what you have already.
I have never seen a company I could not turn around assuming I had those options. The truth is that in the company, and in all companies, everyone or at least a lot of them, know what to do, but there are some sort of political or economic barriers that prevent them from doing it.
Why did Microsoft displace IBM, but google and apple and sun fail to displace microsoft given all msft’s series of failures? the error was on both sides. Would you rather have 80% of your revenue dependent upon the iPhone or Windows+Office? (Samsung is a better phone btw).
Why did nokia fail and iphone/samsung eat their lunch?
Why is search a dead tennis ball and Walmart, Home Depot and Amazon together have replaced Sears (and its imitators)?
Why did amazon succeed and barnes and noble (and everyone else) fail?
When the Xbox team was started why did they demand separate offices away from the rest of campus, and why did that product (sort of) succeed where most other microsoft initiatives fail?
I can usually diagnose a company in two weeks, and with certainty in thirty days. The problems are not hard.
If you can’t turn it in two to three years you probably can’t turn it. I would make mistakes. Everyone does. Your strategy for the turnaround has to assume you will make mistakes, and have multiple tiers of success so that you can achieve different levels of success depending upon mistakes surprises, and shocks.
THE PEOPLE ARE THE PROBLEM.
Source date (UTC): 2017-04-07 14:54:00 UTC