Leading Turnarounds: Avoiding Early Mistakes

By Joe Frontiera and Dan Leidl

The stories of Apple and Starbucks inspire many of us, because both of these organizations were once on the ropes, in danger of failing, and have achieved the elusive “turnarounds” to which countless others aspire. They each were brought back from the brink and, more importantly, have since achieved the hallmark of a true turnaround—sustained success.

It’s fun watching a turnaround from the outside, but the view is much different on the inside. In fact, one of the most profound challenges any leader will face is the prospect of taking over a failing team or a struggling organization. Even worse is coming to the realization that a team that you have been leading is falling far short of performance goals.  Both scenarios can prove to be a daunting test of leadership capabilities.

Following are three strategies that a leader can use to avoid major pitfalls at the outset of a turnaround:

1. Ignore your Gut: Avoid Immediate Action
A failing team can be fragile. Confidence is down, morale is low, trust can be shaky or nonexistent, and engagement is typically poor. After all, no one wants to be associated with a loser. When a leader comes to terms with this, the knee-jerk reaction is to do something, to do anything! The team must be snapped out of its stupor, and we know immediate action is required to get things back on track.

In most cases, this action-oriented instinct is simply wrong. In fact, it can lead a team further down the rabbit hole. Through our research with successful turnaround artists in professional sport, business, government, and education, one counterintuitive principle kept recurring: when a leader first takes over a failing team, one of the most important things he can do is to ignore his instinct to act.

When leaders quickly act, with the genuine belief that their prescribed actions will address the core problem, two key messages are implicitly sent to the team in rapid succession. First, the team hears that they are not quite as smart as you. After all, you’re the one who came in and uncovered the issue that is hindering performance. Shortly thereafter, the team hears that there is something fundamentally wrong with them. After all, the likely changes that you are prescribing relate to them—their composition, processes, values, and work ethic—their core identity. 

If these messages were dropped on anyone, chances are good the message sender would meet resistance. Just as a leader implicitly sends these messages, a team can implicitly argue them in a myriad of creative ways: subtle resistance, reduced engagement, and even sabotage.

2. Adopt a Mindset of Curiosity
We found that the best turnaround artists adopted a mindset of curiosity. They genuinely wanted to understand who the team was, and what had occurred that led them to their current state. They observed daily interactions, asked questions such as, “What are we doing that’s stupid?" They attempted to gain a better understanding of the roles that were needed to make the team successful, and compared those roles with the skill sets of the individuals on their team. They tested their employees’ understanding of their own roles by asking simple yet powerful questions, such as, “How would you describe your role here?”

Through their exploration, they gathered an immense amount of critical information. They gained insights into the inner workings of the team, elicited ideas from team members as to what internal processes should be kept and what could be changed, noted dysfunctional behaviors, developed an understanding of the different roles that were needed to form a successful team and whether that aligned with the skill sets of the current team members. More importantly, throughout this process these leaders allowed their teams to get to know them and, as a result, build trust. The team gained confidence that the leader really cared about their ideas, their efforts, and their contributions, and the team also had an opportunity to communicate that they didn’t want to continue to underperform.

3. Determine What the Team Can Be
The best turnaround artists didn’t limit their curiosity to what was wrong with their team. They also explored exactly what their teams could become. For example, after one NFL owner purchased his team, he spent much of the first six months with another successful franchise, learning about the core components of their success and how they built their culture.

Along with learning how others have succeeded, this part of the turnaround process takes intense and purposeful reflection. It’s not about simply copying someone else’s formula for success. Rather, it’s about integrating some outside components into your own formula. And the only way that can happen is if you have a clear idea of what you want your team to be. Yes, this partly comes from observing others, but it also comes from forming and developing your own unique identity, determining what values you want your team to carry on or adopt, and discerning what characteristics you have that can be further exploited.

Some Takeaways:
—Turnarounds don’t happen overnight.
—They often don’t follow a linear trajectory.
—Leading a turnaround requires persistence, resilience, and a clear understanding of the intended outcome.

Many leaders sabotage their efforts by acting too quickly and losing the very team they intended to rebuild. The three steps outlined above allow a leader to develop a solid foundation for the future actions and discussions that are necessary for a successful turnaround. At the onset of a turnaround, the most effective leaders recognize that they have a distinct opportunity to immerse themselves in both ends of the performance spectrum, learning what is wrong from their own team, and learning how others have gotten it right. Through this, leaders are able to develop a clear understanding of what it is they want their team to be.

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